UK offer tax incentives for fracking

In a controversial move, the UK Government last week announced tax incentives for the extraction of shale gas (fracking) during its Budget 2013 measures.

In a controversial move, the UK Government last week announced tax incentives for the extraction of shale gas (fracking) during its Budget 2013 measures.

While the Irish Government await the outcome of the EPA report, before they make any decision on the fracking industry, the UK is embracing and promoting investment in their natural gas.

It is not understood what impact, if any, these measures will have on Northern Ireland, but the UK Government has made it clear that Shale gas “is part of the future and we will make it happen.”

A new shale gas field allowance which will exempt the shale gas developers from particular taxes in the early stages of development was announced as part of the incentives. This will assist the industry through the early stages of development and ensure that shale gas reserves are properly developed.

New planning guidance on shale gas is due to be released by July of this year, with a revised planning system in place by the end of this year in the UK. The Government said they will develop policy proposals this summer to ensure that there are mechanisms to provide direct benefits to local communities and they will establish a Government Office of Unconventional Gas and Oil to drive the shale gas industry.

Chancellor of the Exchequer George Osborne, said “I also want Britain to tap into new sources of low cost energy like shale gas.”

Supporters say shale gas production in the UK could provide a cheap, secure source of energy, but opponents are worried about the possibility of earthquakes and water pollution caused by fracking.

Tamboran Resources wish to explore the possibility of fracking in Fermanagh and Leitrim. Following the UK’s announcement last week, Minister Alex Attwood at the Northern Ireland Environment Department, stated “It may be that George Osborne is giving the green light to shale gas through a generous tax regime. That is for Treasury to determine.

“Treasury do not determine what planning and environment requirements are in Northern Ireland. That is absolutely for Northern Ireland and DOE to assess, in the event of planning applications being received.”

“There is a wide range of research projects ongoing – here in Ireland, Europe and the USA. When fracking research is concluded and science is fully known that is the time to assess how to proceed,” he said.