UK Treasury ahead with tax breaks for fracking firms

Chancellor George Osborne has pledged to make Britain's tax regime the "most generous for shale in the world" as the Treasury pressed ahead with promised tax breaks for fracking firms.

A new tax allowance will see a certain portion of income from each shale gas “pad” — or production site – receive an effective tax rate of 30pc, rather than 62pc.

The tax break is similar to those on offer to oil and gas explorers in technically-challenging and less economic fields in the North Sea, where they have been credited with revitalising interest.

The British Geological Survey said last month there could be 1,300 trillion cubic feet of gas in northern England alone. If just 10pc could be extracted it could meet Britain’s needs for more than four decades.

Water UK, which is demanding an urgent meeting with shale companies to discuss its fears, warns: “Shale gas fracking could lead to contamination of the water supply with methane gas and harmful chemicals if not carefully planned and carried out.”

It suggests aquifers could be contaminated by fracking, by leaks from wells, or by poor handling of chemicals or waste water on the surface.

The group also warns that “the fracking process requires huge amounts of water, which will inevitably put a strain on supplies in areas around extraction sites”.

http://www.telegraph.co.uk/finance/newsbysector/energy/10189932/George-Osborne-pledges-most-generous-tax-regime-for-shale-gas.html