The UK’s government has just promised to make Britain the country with the world’s “most generous tax regime” for shale gas. The FT reports that the government plans to reduce the tax of shale production to 30 percent—most of the rest of the energy industry pays 62 percent—while requiring shale companies to provide £100,000 in “community benefits” per well. This is smart policy: it both encourages shale production and allows ordinary citizens to share in the wealth. Even more noteworthy is what inspired it:
Ministers are keen to replicate the success of the US, where “fracking” has produced a glut of natural gas and pushed down the price to the benefit of households and industry. David Cameron said recently that he was “pretty jealous” of the US industry.
We’re glad the UK is getting smart on shale; the better global shale policy is, the better life will be for everyone. but this story also points to what makes America great. We don’t always have the best leaders, or the most efficient institutions, but when new economic opportunities arise, we tend to seize them faster than anyone else. By the time the rest of the world starts gearing up, we already have the experience and the expertise.Contrary to what the stubborn declinists say, America is as strong and innovative as ever, and the rest of the world is still trying to figure out how to imitate our success.[Oil rig image courtesy of Shutterstock]