“shale gas production could offer a significant economic opportunity for the UK”
The Chancellor, George Osborne, today made a number of announcements relating to shale gas in his Autumn Statement. As expected and in keeping with his previous comments, the Chancellor’s announcements regarding shale gas are intended to encourage shale gas production in the UK.
Acknowledging the impact that shale gas has had on gas prices in the US the Chancellor commented that “we do not want British families and businesses to be left behind as gas prices tumble on the other side of the Atlantic.” He also confirmed that the Government will consult on the tax regime for gas.
The Gas Generation Strategy, published today, confirmed that the Government is looking to develop a “targeted tax regime for the shale gas industry”. It also said that HM Treasury is currently engaging with companies and will report at the 2013 Budget.
The Chancellor announced that the Government will establish an Office for Unconventional Gas. This will join up responsibilities across government and provide a single point of contact for investors and ensure a simplified and streamlined regulatory process. We see this as a sign that the Government is taking unconventional gas seriously. We anticipate industry will welcome it as a step in the right direction to encourage and support the development of unconventional gas resources in the UK.
The Government’s Gas Generation Strategy also commented that if shale gas production “can be shown to be economic and safe, domestic shale gas production could offer a significant economic opportunity for the UK, with the prospect of new sources of indigenous supply, new industrial activity and skilled jobs”.
Looking ahead, the Department for Energy and Climate Change (DECC) will commission further work on the environmental implications of further licensing and will conduct a full public consultation. This will be considered before any decisions are made on new licensing. DECC will also consider its development policy and guidance to “ensure that it is appropriate for shale gas production.”