Controversial “fracking” won backing from the government with promises of a generous new tax regime for extracting shale gas.
Mr Osborne said “shale gas is part of the future and we will make it happen” as he unveiled measures to support the new industry, including field allowances to promote early investment in the sector.
Shale gas is exploited by drilling into rock and fracturing it with high-pressure liquid to extract the gas – known as fracking. Supporters say shale gas production in the UK could provide a secure source of energy, but opponents are worried about the possibility of earthquakes and water pollution caused by fracking. Tax breaks for shale development could help keep Aberdeen at the forefront of the energy industry for years to come, according to a local financial expert. Ian Williams, chairman at Campbell Dallas, said: “There is a huge opportunity for proven technologies to be applied to the shale gas sector.”
Bob Ruddiman, head of energy and natural resources at legal firm Pinsent Masons, said: “A shale gas field allowance and a generous tax regime for shale will define how the industry will develop.”