Osborne feels heat over dash for controversial shale gas

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The Government has unveiled its strategy to make the “best use of lower-cost gas”, but was immediately criticised for undermining investment, jobs and efforts to cut carbon emissions.

As part of a drive to support new supplies, an Office for Unconventional Gas will be set up to ensure a “simplified and streamlined regulatory process” for exploiting shale gas in the UK through the controversial method of “fracking”.

The Government is also consulting on tax breaks for the unconventional fossil fuel, which has been widely exploited in the US, leading to falling gas prices, but which has raised concerns over water pollution and small-scale earthquakes.

There are also fears that widespread use of shale gas wells will harm the look of the UK countryside, damage tourism and reduce house prices.

The strategy unveiled alongside yesterday’s Autumn Statement predicts the construction of 26 gigawatts of new gas power stations – up to 30 plants – by 2030, much of which will replace old coal, nuclear and gas plants.

But there could be as much as 37 gigawatts of gas by 2030 if ministers decide to relax the budget for delivering emissions cuts in the 2020s, the strategy said, allowing them to be cut more slowly than recommended by climate advisers.

The backing for the fossil fuel, which critics have dubbed a new “dash for gas”, comes days after the publication of the Energy Bill which set out support for new low-carbon power including nuclear reactors and renewables.

Chancellor George Osborne said the gas strategy would “ensure we make the best use of lower-cost gas power, including new sources of gas under the land”.

He said the Office for Unconventional Gas would make sure regulation was “safe but simple” and added: “We don’t want British families and businesses to be left behind as gas prices tumble on the other side of the Atlantic.”

But environmentalists attacked the move for undermining investment and jobs which could be created in clean technology, as well as pushing up energy costs for consumers as the UK would remain tied to increasingly expensive fossil fuels.

Nick Molho, head of energy policy at WWF-UK, said: “The UK’s over-reliance on gas is, environmentally and economically, highly risky.

“Gas price rises have driven people’s bills up in recent years so committing the UK to more gas seems to show a reckless disregard for both bill payers and the environmental impact of burning yet more fossil fuels.”

Greenpeace political director Joss Garman said: “The Chancellor is misleading people to position shale gas as the answer to UK’s energy woes.

“The impact of fracking in the US is irrelevant because energy experts say the US shale gas boom cannot be replicated here.

“Over a third of the UK’s economic growth in the last year came from the low-carbon sector. By ignoring this and instead offering incentives to the gas industry, George Osborne is undermining crucial green growth.”