The UK gas industry must be patient on waiting for decisions about whether to develop potential shale gas resources, UK energy secretary Ed Davey said Monday, though later finance minister George Osborne pointed to fiscal incentives to develop a shale gas industry.
Davey told the Gastech conference in London that he would like to see more development of domestic resources, but not at any cost.
"In principle, I'm all in favor of exploiting new resources," he said according to the text of his speech released by the government.
"I would welcome as much as anyone a way to boost Britain's indigenous gas supplies and to reduce energy prices to consumers and businesses alike," he said.
"But I make no apology for being a little more patient than those excited commentators" who see shale gas as opening the way to a new age of cheap energy, he added.
Davey said the UK would take an evidence-based approach. "I know that industry analysts do see shale as a rather different proposition here than in the US," he said.
"Questions about regulatory oversight and the involvement of local communities need to be answered rather than simply dismissed," he said.
Davey said the government must also consider the carbon impact of burning more gas, although with carbon capture and storage "and in the light of evidence of the best regulatory regime, I hope it will prove possible for me to give a green light to shale."
'GENEROUS' TAX REGIME
Despite Davey's hesitation, speaking at the Conservative Party conference in Birmingham later Monday George Osborne said he was in favor of developing a shale gas industry in the UK.
He said in the speech televised live by the BBC that the government was looking at introducing a "generous new tax" regime in the UK for shale gas developments.
He said it was in the UK's interests to develop shale gas in the same way that the US has done as part of the government's proposed "enterprise strategy."
"An enterprise strategy means investing in renewable energy, and opening up the newly discovered shale gas reserves beneath our land," Osborne said.
"We are today consulting on a generous new tax regime for shale so that Britain is not left behind as gas prices tumble on the other side of the Atlantic. Our enterprise strategy is accepting Britain faces competition from all over the world, and backing what we're good at."
UK business lobby group the CBI welcomed Osborne's comments.
"It makes sense to maximize the amount of energy we can produce at home at reasonable cost," CBI director general John Cridland said in a statement.
"Incentivizing the exploration of shale gas sits alongside investment in renewables. I don't want all my eggs in one energy basket," Cridland said.
Fracking for shale gas has been on hold in the UK since earth tremors in Lancashire last year.
