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The UK has massive reserves of shale gas under the ground.
George Osborne, the Chancellor, announced a number of incentives to encourage companies to start hydraulic fracturing – or ‘fracking’ – to extract the valuable fossil fuel.
He said companies will receive tax breaks on the profits from shale gas fields, especially at the beginning to encourage them to drill.
He also said communities should receive ‘benefits’ to encourage them to allow planning, but failed to say if the money will come from the company profits or the Government.
“Shale gas is part of the future and we will make it happen,” he said.
Fracking involves drilling hundreds of metres down into the ground and then blasting water and chemicals into rock to extract gas embedded in shale deposits.
In the past it has caused earthquakes in the UK and in the US it has been blamed for the pollution of groundwater. A film starring Matt Damon out later next month will explore the impact the industry has already had in the US.
Campaigners fear that fracking in the UK could cause further pollution. At the moment companies are planning to drill in Lancashire but there is also shale gas in Wales, Scotland and the home counties.
Tony Bosworth, Climate and Energy Campaigner at Friends of the Earth, urged communities not to accept a “bribe” for risking their health and environment.
He said extracting shale gas will make it harder for the UK to meet goals to cut emissions and tackle climate change because both the process and burning of the fuel causes greenhouse gas emissions.
“Communities should resist attempts to buy off their well-founded opposition to fracking,” he said.
Wind developers already offer communities money to allow the building of turbines.
Neil Sinden of the Campaign to Protect Rural England, said communities will not risk damaging the countryside for short term funds.
“We will make sure … the beauty and tranquillity of the countryside aren’t compromised by intrusive development related to shale gas,” he said.
Lawrence Carter, energy campaigner at Greenpeace, said relying on shale gas will push up energy prices as it is expensive to exploit and will distract from the need to invest renewables to provide energy in the long term.
“The Chancellor is slashing public services with one hand while gifting tax breaks to the fossil fuel industry with the other. This is unfair on struggling households, especially when everyone from the energy regulator Ofgem to BP to the Energy Secretary say UK fracking won’t bring down bills.”
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