Fracking and the Budget
As expected George Osborne used his budget speech on Wednesday to express government support for the fracking industry. He said:
In the spending round, we will provide support for energy-intensive industries beyond 2015. For the North sea, we will this year sign contracts for future decommissioning relief, the expectation of which is already increasing investment there. But I also want Britain to tap into new sources of low-cost energy such as shale gas, so I am introducing a generous new tax regime, including a shale gas field allowance, to promote early investment. By the summer, new planning guidance will be available alongside specific proposals to allow local communities to benefit. Shale gas is part of the future, and we will make it happen.
Of course, anybody who has been keeping up with this business has to ask why, when even the people who support fracking are lining up to say it doesn’t need subsidies, Mr Osborne insists on giving them money that inevitably has to come from underfunded public services.
“The ludicrous Boris Johnson“who puts on his full buffoon act to cheer-lead for fracking said one of the great things about it is:
It doesn’t need the subsidy of wind power
Peter Lilley speaking to the Energy and Climate Change Committee said:
“I am puzzled by the suggestion that there is any need for a special tax regime. Drilling costs can be written off against corporation tax at present and so, I think, can research and development costs. Why should they require any special incentive? If it is profitable, let them go and do it. If it is not profitable they should not do it.”
Francis Egan, Cuadrilla’s chief executive, stated to the same committee that :
“We are not asking for a special regime.”
Nick Grealy – a paid apologist for the fracking industry and self-proclaimed expert, talking to the same committee gave a very succinct answer to the subsidy question:
Christopher Pincher: That is the United States. Do you anticipate the need for a subsidy here to encourage UK drilling?
Nick Grealy: No.
and yet Mr Osborne still thought it to be appropriate to throw money at people who don’t seem to be able to shout loud enough that THEY DON’T NEED IT!!!
What sort of a way is this to run an economy which is already missing so many targets that you could mistake the man directing it (Osborne) for a blind man in a snowstorm.
Not only this, but there is also private discussion released after an FoI request in the upper levels of government with Cuadrilla about how local communities can be compensated (bought off) for what Mr Egan describes, with admirable understatement, as “a certain inconvenience” that will result from fracking.
It would appear that tax-payers all over the country are going to be asked to further subsidise the activities of our friendly neighbourhood frackers, so they can buy off opposition in the places where they want to operate.
This wheeze may have seemed like a good answer to John Hayes sitting in Whitehall, who no doubt believed that the “aboriginals” and “nimby-numpties” (© Prof Richard Selley – Imperial College) of the North of England are stupid enough to sell their birthrights for a mess of pottage, and thus dig the government out of the fiscal mire it has created recently.
What is becoming increasingly clear, as people educate themselves about what fracking will mean, is that the price of buying off the growing opposition to fracking is higher than the government could possibly afford – even when they are spending other people’s money like water.