Nov 10 (Reuters) – Britain’s upper house of parliament will on Monday consider plans for a sovereign wealth fund to be set up with revenues raised from shale gas, a source of energy which the government hopes will offset the decline of output from the North Sea.
As part of discussions about legislation on infrastructure, the House of Lords will debate a government plan announced over the weekend to create a fund with money raised from shale gas — once production of this gas trapped in rocks beneath the ground starts towards the end of the decade.
Britain is betting on shale gas to help boost energy production even as operations in the North Sea age. But it has met some local opposition based on concerns over the extraction method’s environmental impact.
Britain’s energy ministry said on Saturday that a shale gas fund would ensure other generations would benefit from the commercial production of shale gas.
“With the sovereign wealth fund everyone in the community will benefit, adding to known wider benefits of shale, such as increased tax revenues, growth and jobs,” said Energy and Business Minister Matthew Hancock in a statement.
Britain’s finance minister George Osborne said in a separate statement the fund would focus on the north of England — an area where most of Britain’s shale gas plans are taking place — and whose economic performance lags behind the south.
Osborne is expected to elaborate on the plans in his budget update next month.
The government has already promised 100,000 pounds ($159,000) in compensation to communities living near shale gas sites, as well as a community fund made up of a percentage of a developer’s revenue from a drilled well.
Companies preparing to use shale gas fracking methods include Cuadrilla Resources, IGas and Egdon Resources . (1 US dollar = 0.6292 British pound) (Reporting by Karolin Schaps; Editing by Clara Ferreira Marques)