CHANCELLOR George Osborne yesterday fired the starting gun on the UK shale gas revolution, with a range of measures to stimulate investment in the industry.
He unveiled a new field allowance for shale gas, and an extension of the ring fence expediture supplement for shale gas projects from six to 10 years.
PwC said the field allowance could reduce the tax rate on shale gas production from 62 per cent to 30 per cent, providing a massive boon to the nascent industry.
“Shale gas is part of the future, and we will make it happen,” Osborne said yesterday, adding the government would ensure that local communities would also benefit from shale gas projects.
Osborne pledged to give planning advice by July to provide clarity and ensure that an effective system for exploration is in place.
The government will consult on these changes, including whether to extend it to other forms of onshore unconventional gas. They are due to be included in the 2014 Finance Bill.
Osborne’s move comes just three months after the government lifted a ban on shale gas fracking in a bid to explore the UK’s potentially huge resources.
UK shale explorer Cuadrilla – which has said that explorations in Lancashire’s Bowland basin suggested gas with a market value of £136bn was present – yesterday welcomed the measures.