UK may lift curbs on shale gas, offer tax help

Paul Mobbs mobbsey at
Mon Oct 8 16:40:24 BST 2012

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Seems Ed Davey has done a U-turn on his lukewarm stance on unconventional 
gas... clearing the way, with George Osborne's funding package, for the 
corporate despoilation of the land :-(


UK may lift curbs on shale gas, offer tax help

Oleg Vukmanovic and Mohammed Abbas, Reuters (London), 8th October 2012

The British government expressed support for shale gas on Monday, with the 
energy minister saying he hoped to allow more exploration and the finance 
minister talking of a favourable tax regime for the energy source opposed 
by many environmentalists.

Edward Davey, who heads Britain's Department of Energy and Climate Change 
(DECC), said he hoped to lift a suspension on new shale gas exploration 
that was imposed last year due to concerns about the fracking technology 
used to exploit it.

"I hope it will prove possible for me to give a green light to shale," 
Davey told a gas conference in London.

Speaking at the ruling Conservative Party conference in Birmingham, central 
England, Chancellor (finance minister) George Osborne said he was 
considering a "generous new tax regime" to encourage investment in shale 

"The idea that we should be sitting on enormous energy reserves that could 
potentially create thousands of jobs and reduce consumer bills and not do 
anything about it is absolutely absurd," an aide of Osborne told reporters 
at the party conference.

The aide said one option for a shale gas tax regime would be to remove it 
from a supplementary charge on corporation tax that applies to offshore 
North Sea oil and gas exploration.

"I'm sure there are other options, but that is why we want to have a 
consultation with the industry," the aide added.

The government suspended the development of shale gas extraction last year 
after the work triggered two small earthquakes near Blackpool, in the 
northwest, adding to fears about hydraulic fracturing - a method of 
drilling through shale deposits to retrieve gas by injecting liquids and 

"In principle, I'm all in favour of exploiting new resources. I would 
welcome as much as anyone a way to boost Britain's indigenous gas supplies 
and to reduce energy prices to consumers and businesses alike," Davey said.

The British business lobby welcomed the government's move on proposals to 
provide incentives for shale gas exploration.

"It makes sense to maximise the amount of energy we can produce at home at 
reasonable cost," John Cridland, Director-General of the Confederation of 
British Industry (CBI) said in a statement.

"Incentivising the exploration of shale gas sits alongside investment in 
renewables," he added.


The energy ministry now has to decide whether to allow new holes to be 
drilled. Davey said his department was approaching the question with 

"I make no apology for being a little more patient. Questions about 
regulatory oversight and the involvement of communities need to be answered 
rather than simply dismissed," he said.

Environmental groups and large sections of the public in western Europe 
oppose fracking. Bulgaria and France have both banned shale gas exploration 
which they say poses unacceptable risks of water and soil pollution and 
health risks.

The industry hopes that a domestic shale gas sector could ease rising gas 
import dependency.

Britain was a net exporter of gas until 2004, but a steady decline in 
output over the past few years has made it more reliant on imports, mostly 
from Norway and, increasingly, Qatar.

The British Geological Survey estimates Britain's onshore shale reserves at 
5.3 trillion cubic feet (150 billion cubic metres), which would be enough 
to meet its gas consumption for one and a half years, although UK shale gas 
exploration firms such as Cuadrilla Resources have put their figures as high 
as 200 trillion cubic feet.

In the United States, a shale gas boom has resulted in a sharp rise in 
natural gas production, leading to a collapse in domestic prices and the 
possibility of the U.S. exporting liquefied natural gas (LNG) by 2015.

- -- 


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(Edward Burrough, 1659 - from 'Quaker Faith and Practice')

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