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UK Boosts Shale Gas

10 Downing Street has talked a big game on fracking in recent months, but local opposition has stymied efforts to explore Britain’s estimated 1.3 trillion cubic feet of shale gas. As heating bills spiral ever upward, British politicians are flailing about trying to find ways to bring energy costs down. On Thursday, in his Autumn Statement, Chancellor Osborne outlined tax incentives meant to jump-start the country’s shale gas production. The FT reports:

The move reduces the tax rate on a portion of a company’s profits from 62 per cent to 30 per cent to reflect the challenges of shale gas exploration. Companies will receive an allowance equal to 75 per cent of capital spent on projects….

[The Treasury] cited research by oil consultancy Wood Mackenzie which showed the allowance means the effective tax rate for shale gas projects in the UK will be lower than in the US – home to a booming shale industry.

Tax incentives will help lure investment in British shale, but that’s only one part of the problem. Local opposition remains intractable in many places, though David Cameron has promised affected communities compensation for their troubles.

Britain’s shale future depends on whether or not its government can convince the British public that fracking can be done safely, and there’s every indication that it can when properly regulated. British households would welcome cheaper heating bills; they should welcome a shale revolution, too.

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  • AD_Rtr_OS

    “…compensation for their troubles…”
    It seems our British cousins have succumbed to the Liberal Disease of letting their good sense become completely detached from reality – which does explain Attlee, Wilson, and Callaghan.
    If Cameron doesn’t have the good sense to tell those local councils to “Frack Off”, he should resign, and let the country freeze.
    I understand that planning is already underway for the next Thames Frost Faire – the first since 1814!

    • Andrew Allison

      Indeed, to the discomfiture of AGW hysterics, it is not beyond the bounds of possibility that the Thames will freeze over this winter. But don’t confuse ideology with ill-informed NIMBY-ism. All Cameron needs to do is demonstrate the trends in heating pricing in the US and UK. You may be sure that, like the Germans with alternative energy, when the worthies who are opposed to fracking grasp the cost of doing so, they’ll see the light of day.

  • Jacksonian_Libertarian

    The UK should charge a selfishness fee onto all localities energy costs, that refuse the safe shale oil development, make it very painful economically to be stupidly green.

  • S.C. Schwarz

    Regrettably, I’m afraid the battle for public opinion on environmental issues is lost, at least for the moment. I happen to be an environmental engineer specializing in renewable energy, so I have some background on these issues. But when I talk to my friends and relatives, not to mention when I address the public, I find they are completely unresponsive to technical or scientific arguments. These are intelligent people, but they take John Stewart as a main source of news. The media and the academic world have almost completely bought into the green alarmist story, and the public believes them.

    It’s going to have to get much worse before it gets better, if, indeed, it ever gets better.

  • tarentius

    I have followed the British Press quite closely on this issue and the chances of fracking actually proceeding in the UK are 40%, at best. David Cameron is a very unpopular Prime Minister locked into a coalition agreement with a leftist party that is more naturally allied with the Labor Party. Cameron’s only saving grace is that the leader of the opposition and his coalition partner leader are even less popular than he is. There is an incessant drumbeat by the BBC and the tabloid press against fracking and it is seen as being on the same level as genetically modified foods. Therefore, I don’t think fracking has a future in the UK, a second rate power rapidly descending into a third rate one.

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