CHANCELLOR George Osborne is expected to back shale gas as the future of UK energy this week with the publication of a national plan aimed at luring potential investors to tap the UK’s shale gas stores.
Osborne is set to use this week’s Autumn Statement to launch a long awaited Gas Generation Strategy to drum up support for shale gas and its controversial production technique known as hydraulic fracturing, or “fracking”.
The chancellor has already indicated the government wants to introduce a “generous” new tax regime for companies keen to tap the UK’s shale gas reserves.
A Treasury spokesman said: “The Treasury is determined to give certainty to energy investors.”
However, he may be forced to hold off from giving precise details about any tax breaks on Wednesday until an official ban imposed on fracking is lifted.
The moratorium on the technique came into place in 2011 following earthquakes in Lancashire. A subsequent government commissioned report conducted by the British Geological Society in April into the earthquakes found a small risk fracking could cause further disruption.
But no confirmation of plans to offer tax breaks to shale gas production companies could be made until the ban is officially lifted. The quasi-judicial decision rests with Department for Energy and Climate Change secretary Ed Davey, who is understood to be in Doha for the rest of the week attending United Nations climate change talks.
A further government commissioned report by the British Geological Survey is expected to show the UK is sitting on greater reserves of shale gas than was previously estimated. DECC said: “If shale gas operations are given the go-ahead, they will have to meet high standards of safety and environmental protection.”
Shale gas exploration was suspended after two small earthquakes in Blackpool following drilling.