LONDON Dec 5 Britain's finance minister George
Osborne confirmed tax breaks for shale gas on Thursday, as part
of government efforts to stimulate new domestic energy sources
following a boost in support for offshore wind farms earlier in
The tax allowance, first announced in July, will reduce the
tax payable on profits from shale gas, a form of gas produced by
pumping chemicals and water into rocks, to 30 percent from 62
The shale gas tax break follows a series of announcements by
the government on energy in recent days as part of Britain's
twice-yearly budget statement.
The government had already unveiled plans to help cut energy
bills, invest in new power stations and boost support for
offshore wind farms while slightly reducing subsidies for wind
parks built on land and large-scale solar plants.
Geological studies show Britain to have large shale reserves
which could reverse a rising dependency on energy imports, but
it is not yet known whether the deposits are economic as gas has
not yet been proved to flow from the rocks.
The industry body for Britain's shale industry, the UK
Onshore Operators Group, said the new tax framework gave "a
strong signal" that the country wanted to incentivise investment
in the industry.
Soaring energy bills have become a big political issue in
Britain since Labour leader Ed Miliband said in September he
would freeze consumer bills for 20 months if he wins power.
The government, under pressure to bring down rising consumer
energy costs, has thrown its weight behind shale gas which the
Prime Minister has said could bring down bills and create tens
of thousands of jobs.
Shale gas, which has helped transform the U.S. energy
market, is gas trapped in dense rock formations and retrieved
via hydraulic fracturing or fracking - the pumping of water and
chemicals into the ground.
The process has attracted protests from environmental
campaigners in Britain who fear it can pollute water supplies
and cause earthquakes.
Three companies are leading the charge to develop Britain's
shale gas resources. Australia's Dart Energy, which is
partnered with GDF Suez, London-listed IGas Energy
and Cuadrilla, a privately owned business partnered
with British utility Centrica.