Chancellor gives energy sector a boost
CHANCELLOR George Osborne threw his weight behind the controversial shale gas industry today promising a “generous” new tax regime.
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The move, first touted in the Autumn Statement, will mean a “shale gas field allowance” which the Chancellor said would help promote early investment in the sector.
Tim West, partner at Ernst & Young in Leeds, said: “With renewable energy resources being costly to install and given declining stock and stores of non renewable carbons shale is an important resource.
“It is also an additional way for the government to hit targets and with coal fired power stations and old nuclear stations coming to the end of their lives its an important way to fill the energy gap.”
Shale gas is extracted by pumping large quantities of water into the ground at high pressure to displace gas.
A temporary ban on this process, called hydraulic fracturing, or fracking, was imposed after Cuadrilla Resources, which is spearheading the industry in the UK, caused a minor earthquake near Blackpool. This was lifted in December.
The Chancellor said: “By the summer, new planning guidance will be available alongside specific proposals to allow local communities to benefit. Shale gas is part of the future. And we will make it happen.”
He also said the hard-pressed ceramics industry in Stoke-on-Trent would be exempted from the climate change levy, after lobbying by a local MP. And, there will be further support for energy intensive industries beyond 2015.
The government also plans to take two major carbon capture and storage projects to the next stage of development and support the manufacture of ultra low emission vehicles in Britain with new tax incentives.
