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Energy Blog Could Shale Gas Deal With Country’s Energy Crisis

Could Shale Gas Deal With Country’s Energy Crisis

Chris Hurcombe
by Chris Hurcombe December 17, 2012
business gas use

If Chancellor George Osborne and fellow conservatives have their way, shale gas could see an increase in use with a substantial tax regime.  The chancellor and fellow conservatives don’t like what they’ve seen in the renewable energy sector, which are lots of greens and subsidy junkies. He recently told the public that an initiative approach involves financing in renewable energy, which Osborne stated should be done with opening up the recently found shale gas under the land.

Osborne said the lavish new tax regime for shale gas is so Britain doesn’t get left behind when gas prices begin to drop across the Atlantic. He said the UK shale gas industry could use all the help it possibility can – as only a few wells have been drilled. The industry needs hundreds, if not, thousands of wells that would help in knowing how much gas could be let go from fracking.

Both the Deutsche Bank and CBI have said no repeats of the U.S. gas miracle can be attained since there are several differences in mineral rights, environmental regulations and popularity density.

Questions About Shale Gas Need Answers Before Its Use

Ed Davey, Lib Dem energy and climate change secretary, said industry analysts understand that shale gas is a different proposition than in the United States. Davey said there are some questions that need answered including local community involvement and regulatory oversight. He said the utilization of new energy sources will need to be consistent with the carbon plan and budgets.

The government has been dealing with the gas issue for a while with investors looking for a 50 percent increase in the amount of gas-fired power stations while asserting they can meet the carbon reduction targets.

Davey promised a bright future for the gas-fired power generation with at least 20 power stations being built. After speaking at the Gastech conference, he went to City Hall to praise the government policy on climate change, which has included harsher carbon reduction targets for Europe. Many folks were left wondering just how expansion on fossil-fuel power and greenhouse gas reduction would work together.

European Commission on climate change Connie Hedegaard said gas is a solution but cannot be the only solution. She said renewable energy means a more sustainable solution, which is why there needs to be CO2 and renewable targets.  The UK isn’t keen on having a renewable energy target past 2020, when the present target expires.

One government source about Osborne’s announcement said it won’t matter what pace the decision is reached. However, it’s important to prepare for it.

Volker Beckers, RWE npower chief executive, said there were other big energy issues to solve. Laura Sandys, Department of Energy and Climate Change conservative MP, said public opposition to shale gas would be an issue that would have to be overcome.

John Cridland, CBI director-general, said it makes complete sense to get the most amount of energy from the homeland for a reasonable price. It should be coupled with renewable investments; not just one energy source.

Craig Bennett of Friends of the Earth said Osborne isn’t listening to climate experts, businesses and leading politicians about his dash for shale gas.  Osborne, Bennett said, is not capable of handling the opportunities and/or challenges that come with the 21st century, as his strategy is rooted in the 1970s.

Campaigners have doubts the government can reduce carbon emissions and get more gas. WWF-UK said that in order for Davey’s plan to be effective, gas plants would need to run infrequently as a backup to renewable energy sources; something investors are unlikely to be happy with.

According to a statement from the Treasury, there will be no formal discussion on shale gas; but, instead an industry engagement. Shale gas is still in its infancy stage and, because of that, the government feels a targeted tax regime can help to unlock the investment.

Using field stipends to boost North Sea investment has proven the usefulness of a targeted tax regime in enhancing investment and construction that might not have gone on without it.  The government has every intention of working with companies to make sure the final structure is targeted correctly while sustaining a fair return.

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