UK government to boost shale gas industry

As part of its infrastructure investment outlined in the spending plan for 2015-16, the UK government has announced plans to develop the country’s shale gas industry. These include new planning guidelines and possible tax breaks for companies intending to extract the gas.

The announcement comes after a report by the British Geological Survey (BGS) that found that reserves of shale gas in the UK are twice as large as previously estimated. The BGS said there may be 40 trillion cubic metres of shale gas underneath the Bowland Basin region in the north of England, although it is unclear how much of this it will be possible to extract.

The controversial shale gas extraction process, hydraulic fracturing or fracking, is already commonplace in the US, but has faced opposition from environmental groups. Critics say the process may be unsafe, releasing gas into water supplies and causing localised tremors. The government has said fracking companies in the UK will need to compensate local communities living near shale gas wells with a £100,000 payment along with 1% of their revenues.