Business Green: “A plan for new shale gas tax revenues to be deployed in a UK sovereign wealth fund is to be debated in the House of Lords on Monday.”
“Energy and climate change secretary Ed Davey said over the weekend that the proposed fund would be set up once commercial production of shale gas begins.
“It’s about storing the financial benefits of shale production and putting it towards a low-carbon energy future,” he added. “It’s part of this government’s broader strategy to strengthen our security of supply in a cost-effective way for future generations.”
A Department of Energy and Climate Change (DECC) spokeswoman said the size of the fund will be dictated by the scale of viable resources. She also confirmed the fund would come on top of the existing benefits being offered to communities that agree to host shale gas operations.
Currently, communities are set to receive a lump sum of £100,000 for each test well, plus 1% of revenues generated from the site by shale gas developers.
However, there remains confusion over who will benefit from the new sovereign wealth fund.
While Davey highlighted the potential for low carbon investment and said it represents “a great opportunity for the whole of the UK”, chancellor George Osborne suggested the money could be targeted at the north of England. Much of the UK’s fracking activity is expected to take place in the region, which is estimated to hold 1,300 trillion cubic feet of shale gas, while test drilling licences have already been granted in Lancashire, Cheshire, Merseyside and Greater Manchester.”
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