Britain announces shale-gas tax incentives

WHEREAS South Africa still has to decide on fracking in the Karoo, the British government has announced massive tax breaks for exploiting shale gas.

Local communities in Britain could benefit to the value of more than £1-billion (R15-billion) to host controversial “fracking wells”.

Corporate tax breaks and a more streamlined process for approving developments have also been outlined to boost exploration.

This week, it was also revealed that fracking in northern England could provide enough shale gas to meet Britain’s needs for more than four decades.

British cabinet ministers gave their backing to a new industry “charter” setting out a series of community incentives, which could be worth more than £1.1-billion over 25 years.

Under plans drawn up with the industry, residents will receive at least £100 000 for each well where fracking takes place to explore for shale gas and 1% of revenues if the drilling proves to be commercially viable.

Based on initial estimates of how the shale gas might be developed, the plan could see fracking at 100 sites and local communities benefiting from £5-million to £10-million each.

Energy Minister Michael Fallon said the new plans showed that Britain was “serious about shale”.

“It has the potential to contribute to our energy security, increase investment, to create tax revenues, to generate significant income for local communities,” he said.

The main focus for shale in Britain has been Lancashire. New estimates from the British Geological Survey also suggested there was as much as 1 300 trillion cubic feet in the Bowland shale, an area stretching from the northern Wales-England border to the North York Moor — far more than previously thought. — © The