UK Osborne Keen on Shale Gas-Backed Sovereign Wealth Fund

George Osborne, UK Chancellor of the Exchequer, commented on BBC Radio 4 that shale gas extraction revenues could be held in a sovereign wealth fund. The UK is looking at ways to lower its dependence on oil imports, while creating a savings vehicle from taxable earnings, like its northern neighbor Norway.

Osborne said, “That’s a way of making sure this money is not squandered on day-to-day spending but invested in the long-term economic health of the north of England to create jobs and investment.”

The proposal is going to be argued in the UK House of Lords. In late October, Lord Hodgson of Astley Abbotts, a Tory peer, proposed an amendment to the UK infrastructure bill.

According to the British Geological Survey, there are estimates of 1,300 trillion cubic feet of shale gas across the north of England. However, according to the 2013 “The Carboniferous Bowland Shale Gas Study”, the “assessment of shale gas resources in the UK is in its infancy.”

Updated News – DECC – November 10th

In addition, on November 10th, the UK Department of Energy and Climate Change (Decc) had announced plans to draft up a sovereign wealth fund with future revenues from the extraction of shale gas. This decision is in support of Her Majesty’s Treasury.

In a press release, UK Energy Secretary Ed Davey summarized, “The sovereign wealth fund is about storing the financial benefits of shale production and putting it towards a low-carbon energy future. This is part of a broader strategy to strengthen the UK’s security of supply in a cost-effective way for future generations.”

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