Companies fracking for shale gas to get 30% tax break from UK Government
Chancellor George Osborne has just revealed tax breaks of 30 per cent for onshore shale gas producers, in a bid to actually start a shale gas exploration revolution and ensure the country’s energy security for years to come.
This move is quite likely to benefit companies already engaged in the process of shale gas exploration, such as Cuadrilla Resources, who is involved in fracking operations in Lancashire.
Shale gas is found in shale formed from deposits of mud, silt, clay and organic matter and is extracted by drilling down into the ground and then by ‘fracking‘, a process of hydraulic fracturing of the shale using high pressure liquid to release the gas.
Explaining his decision, Chancellor Osborne said: “Shale gas is a resource with huge potential to broaden the UK’s energy mix. We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits.”
“This new tax regime, which I want to make the most generous for shale in the world, will contribute to that. I want Britain to be a leader of the shale gas revolution because it has the potential to create thousands of jobs and keep energy bills low for millions of people” he added.
As expected, this extremely generous allowance was immediately frowned upon by environmental groups, who are quite worried about the long-term adverse effects the chemicals used for fracking might have on the environment, not to mention the fact that burning more gas will likely make it impossible for the UK to attain its carbon reduction targets.
Moreover, it’s still not clear whether extensive shale gas exploration will actually manage to drive down gas prices, so the installation of an energy management system that will enable users to optimize their energy expenditure and save money in the process remains the best option for any company.