UK Osborne: to introduce "generous" new shale gas tax regime
BY SELINA WILLIAMS AND JAMES HERRON
LONDON -- The U.K. government will introduce a "generous" new tax regime designed to stimulate early investment in the country' s nascent shale gas sector, U.K. Chancellor of the Exchequer George Osborne said Wednesday.
The new shale gas tax regime would include a field allowance, he said. New planning guidance on shale gas projects alongside specific proposals to help local communities to benefit from shale drilling would follow later this year, he said.
"Shale gas is part of the future and we will make it happen," Mr. Osborne said in his budget statement to parliament.
The U.K. government is supporting the expanded use of natural gas to generate electricity and wants to promote the exploitation of all the U.K.' s gas resources, including shale gas, to ensure low-cost energy supplies in the future.
At the end of last year, the government lifted a moratorium on hydraulic fracturing, the controversial process used to release the gas from the rock as part of efforts seeking to replicate the North American shale gas revolution that has transformed the U.S. energy market.
Shale gas exploration is still at an early stage in the U.K., making a reliable estimate of the country' s reserves difficult. There has been no commercial shale gas production in the U.K. so far.
Dow Jones Newswires