Government moves to convince public on shale gas regulation

3rd December 2014

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Juliette Pickering

A £5 million fund to provide independent evidence to the public about the robustness of regulations governing shale gas exploration was announced today by chancellor George Osborne as part of his autumn statement.

The evidence will help ensure the public is better engaged in the regulatory process, according to the document accompanying Osborne’s statement.

Research into public attitudes to shale gas carried out by Sciencewise, a body funded by the business department to better understand public engagement with policy, was published alongside the statement.

According to the study, the public do not believe shale gas is affordable, sustainable or will improve energy security. They also fear that important decisions on shale gas have already taken by the government, potential risks are being overlooked and that offers of community benefit funds are “akin to bribes”.

The public wants information to be provided by credible, impartial and trustworthy sources, such as academics, researchers found.

Ken Cronin, chief executive of trade body UK Onshore Oil and Gas, said: “The UK public is exposed to many claims about the potential environmental impact of exploring for and developing the UK’s shale resource. This programme offers the opportunity to provide independently verified evidence on the issues that matter most to local communities.”

Once the scope of the review has been agreed, operators will provide full access to sites and support the installation of specialist monitoring equipment by the independent teams, he added.

Other announcements in the autumn statement include:

  • Major reforms to the tax regime for oil and gas will be unveiled “shortly”. These will include a reduction in the rate of tax on profits from oil and gas fields on the continental shelf from 32% to 30% from 1 January 2015, and possible further reductions in the future. The government wants to encourage higher production from the UK continental shelf, where 11-21 billion barrels of oil remain to be exploited, it said.
  • The creation of a £31 million sub-surface research test centre to increase knowledge on energy technologies including shale gas and carbon capture and storage. This will be established through the Natural Environment Research Council.
  • Discussions with developer Tidal Lagoon Power to investigate the feasibility of a renewable energy project at Swansea Bay.
  • Tax relief of 5% for businesses that invest in flood defence projects from 1 January 2015.
  • A £15 billion investment in road building.
  • A six-year investment plan in flood defences and flood risk management.

Green groups slammed the government for backing road building and fossil fuels over action to create a low-carbon economy.

Doug Parr, chief scientist at Greenpeace UK, said: “The chancellor should have announced a nationwide programme to upgrade Britain’s draughty homes, making them fit for 21st century and creating jobs in every constituency. Instead we get a 1980s-style road building programme and subsidies [and] tax breaks for fossil fuel giants that will entrench the high-carbon economy we should be moving away from.”

The UK Green Building Council (UKGBC) criticised the chancellor for not “killing two birds with one stone” in linking his plan to reduce stamp duty on the sale of houses with the energy efficiency of a house.

John Alker, director of policy and communications at the UKGBC, said: “For years we’ve been told by the Treasury that stamp duty cannot possibly be touched. But today’s changes blow a hole in that theory.

“This represents the mother of all missed opportunities, to link stamp duty payments to the energy performance of the property – incentivising householders to take action, and firmly establishing energy efficiency within the house buying and selling market.”

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