Tax breaks for fracking

Lawrence Carter, energy campaigner at Greenpeace, has disputed the amount of natural gas and money that could be raised from the controversial process of fracking.

Barbara Keeley MP has called for a debate in the Commons about shale gas after complaining that Chief Secretary to the Treasury Danny Alexander had only "one mumbled sentence" on the subject.

Addressing Commons leader Andrew Lansley, she said: "We learned on BBC News this morning that the Government was likely to announce a streamlined planning process to award drilling permits for shale gas but we didn't hear any more detail.

"We got one mumbled sentence in the statement from [Danny Alexander].

"For constituencies like mine this is a key issue because we have the threat now of fracking for shale gas close to two housing estates."

Mr Lansley replied that Department for Energy and Climate Change ministers will be in the Commons on July 11 to answer questions.

The British Geological Survey has published its estimate of the shale gas reserves in the Bowland-Hodder shale formation, which covers 11 counties in northern England.

It concluded that the potential volume of gas is 40 trillion cubic metres (1,300 trillion cubic feet) - much more than previously thought.

This does not reflect an accurate estimate of what can be extracted commercially.

You can read the report here.

Read: DECC: Not all of shale gas can be extracted

The Department of Energy and Climate Change has said that communities near fracking wells will receive £100,000 in "community benefits" as well as 1% of revenues derived from the operation.

It is part of a package of benefits for communities brought forward by the industry today.

Energy Minister Michael Fallon said: "This will provide a welcome boost for communities who will host shale exploration and production as well as offering strong assurances that operators will engage with them and work to the highest health, safety and environmental standards.

“From money off bills, playgrounds, sports halls or regeneration schemes, people will see real and local advantages from shale gas production in their area.”

The Department of Energy and Climate Change (DECC) has announced that there is potentially 40 trillion cubic metres (1,300 trillion cubic feet) of shale gas in the Bowland Basin in the North of England.

The study was commissioned from the British Geological Survey on an area covering 11 counties.

DECC advised that not all of this could be extracted, but said the report "will give industry and regulators an indication of how best to plan future exploratory drilling".

The government is announcing a package of reforms toenable shale gas exploration today.

'Fracking' comes from the term 'hydraulic fracturing' and is a process used to extract natural gas from the ground.

It involves pumping a mixture of water, chemicals and sand into the ground at high pressure to release gas from shale rock formations.

Fracking has become very widespread in the US where it has produced cheap natural gas, but also met with resistance from local communities and environmentalists.

Watch a video explaining more about the process here.

Chief Secretary to the Treasury Danny Alexander has told MPs that the British Geological Survey has estimated there is 1,300 trillion cubic feet of shale gas reserves in the UK.

He sniped that this is "almost as much hot air as the Shadow Chancellor [Ed Balls] produces in a year".

Update: Since Danny Alexander spoke the British Geological Survey has released its report saying that the figure above relates to the Bowland Basin area in northern England and not to the whole of the UK.

Communities that host fracking sites are to be offered one percent of any revenues generated over the lifetime of the well, according to the BBC.

Fracking is the process of pumping a mixture of water and chemicals below the ground at high pressure in order to release natural gas stored in shale rock below.

Some local residents have opposed the proposed sites over fears that the process causes earthquakes, contaminates ground water and can affect house prices.

The Department of Energy and Climate Change is expected to release details of a package for local residents later today.

There is far more natural gas stored in shale rock formations in the UK than previously thought, according to a new report from the British Geological Survey due to be published today.

The report on shale gas reserves below Lancashire and Yorkshire was commissioned by the government.

Exploiting the resource is highly controversial as critics say the process of fracking - fracturing rock with high-pressure liquid to release the gas - can cause earthquakes, pollute water supplies, blight the countryside and affect house prices.

Treasury Chief Secretary Danny Alexander is expected to reveal that the Treasury is consulting on a tax break and changes to planning laws in order to boost the fledgling industry.

Read: Osborne bolsters his case for 'dash for gas'

Tax breaks and fast-tracked permits for controversial shale gas exploration are likely to form part of the multi-billion pound infrastructure package aimed at kick-starting sluggish economic growth. British reserves of the energy source are much higher than previously thought.

Treasury Chief Secretary Danny Alexander will also reveal details of projects such as new road and rail capacity, science facilities and nuclear power stations, in a Commons statement.