UK to offer tax breaks for onshore gas drilling
Energy companies in the United Kingdom will be offered tax-breaks to drill for onshore gas, British chancellor of the exchequer George Osborne has decided, in a bid to match the falls in gas prices in the U S.
However, the encouragement for the drilling – known as “fracking”, where rock is broken apart by high-pressure underground injection of water – has been condemned by environmental groups.
In the Commons, Mr Osborne promised energy firms “safe, but simple” regulation: “We don’t want British families and businesses to be left behind as gas prices tumble on the other side of the Atlantic.”
A new “one-stop” office will “join up responsibilities across government, provide a single point of contact for investors and ensure a simplified and streamlined regulatory process”, said Mr Osborne, who backs the construction of 20 gas-fired power stations.
Australian drillers Tamboran are interested in carrying out tests in Fermanagh for shale gas, which could be pumped as early as 2014, it claims; though locals express fears about ground-water pollution and earthquake shocks caused by fracking.
Liberal Democrats energy secretary Ed Davey is expected reluctantly to clear the way for resumed test drilling in Lancashire, which was halted last year after it caused a number of tremors.
Local opinion is divided in Lancashire, with some welcoming the prospect of jobs. However, the major shale gas reserves are to be found in Gloucestershire, Berkshire, Surrey and other counties in southern England, where locals will vociferously oppose.
“Does really expect hydraulic-fracturing sites, with all the attendant risks, to spring up across the Home Counties? It’s not going to happen,” said John Sauven, executive director of Greenpeace, who urged the chancellor to use proven clean technologies.
Green Party MP Caroline Lucas said Mr Osborne’s support for fracking and new gas-fired stations “looks like nothing short of a disaster – for the economy, the environment and for people’s energy bills.
“This reckless move, driven by ideology not evidence, risks locking the UK into an expensive, polluting, fossil-fuel future – increasing our exposure to volatile gas prices”.