Seismic shale tax cuts cause tremors

In yet another bid to keep the country's lights on, the government has announced tax breaks for companies involved in the shale gas industry. Tax on income generated by the plucky shale gas extractors will be cut from 62% to a measly 30% – an offer that undercuts the breaks offered by any other country.

George Osborne, by his own admission, is vying for the UK to become the ‘leader of the shale gas revolution’. Sounds jazzy, right? Well, there’s good reason for the Chancellor to be excited. According to a recent survey by the British Geological Survey, the UK is nesting on 50 years' worth of shale gas or 13,029 trillion cubic feet.

Much of the shale gas is in the Bowland Basin, mostly under Lancashire – 10% of which drilling companies estimate they can extract. But shale gas is very much a new part of the UK energy scene and even those who hold licences to do so, haven’t begun extracting the precious gas.

‘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,’ Osborne said.

But these ‘benefits’ are being called into question by environmentalists, many disagree with fracking, the somewhat violent technique used to extract the gas.

‘The Chancellor is telling anyone who will listen that UK shale gas is set to be an economic miracle, yet he's had to offer the industry sweetheart tax deals just to reassure them that fracking would be profitable,’ said Greenpeace energy campaigner Lawrence Carter.

‘Experts from energy regulator Ofgem to Deutsche Bank and the company in receipt of this tax break, Cuadrilla, admit that it won't reduce energy prices for consumers.’

Adding to Greenpeace’s (somewhat unsurprising) opposition to the fracking plans is Water UK, which expressed concerns about water safety and strain on its supply.

‘Shale gas fracking could lead to contamination of the water supply with methane gas and harmful chemicals if not carefully planned and carried out,’ said Water UK, the body that represents all major water suppliers.

The body said it was ‘not taking sides’ on the fracking issues but wants to protect water supplies at all costs.

The whole issue is certainly drawing plenty of resistance from the usual grumpy British suspects. But with few alternatives available to deal with the UK’s energy crisis, and a big boost to the economy in the offing to boot - Osborne may well just tell the naysayers to frack off.