The UK government has announced plans for a shale gas ‘pad’ allowance, which will see the tax on revenue that companies make from producing shale gas reduced from 62% to 30%. The plans are based on existing allowances for oil and gas production which aim to support almost £14 billion of investment next year.

According to Chancellor of the Exchequer George Osborne: “We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits… I want Britain to be a leader of the shale gas revolution because it has the potential to create thousands of jobs and keep energy bills low for millions of people.”

At the end of last month, The British Geological Survey revealed that the estimate for the resource of shale gas in central Britain is 1329 trillion cubic feet (tcf) and just earlier this week a study commissioned by the Department of Energy & Climate Change said that if the country’s shale gas reserves are successfully exploited, gas prices in the country could fall by as much as a quarter by 2030.

However, according to the BBC: “The industry is still in its infancy with a handful of companies holding licences for shale gas exploration in the UK, none of which have begun extracting gas.” IGas and Cuadrilla have begun the exploration process while other energy companies are keeping track of their developments.

Moroever, the industry is likely to face opposition from local communities and environmentalists. Andrew Pendleton of Pendleton is reported to have said that “promising tax hand-outs to polluting energy firms that threaten our communities and environment, when everyone else is being told to tighten their belts, is a disgrace” adding that instead of shale gas “ministers should be encouraging investors to develop the nation’s huge renewable energy potential.”