Britain aims to encourage shale boom

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NEW YORK, Dec. 20 (UPI) -- The British government said it wants to set up the right tax regime to support an emerging shale natural gas industry in the country.

The government recently lifted a ban on hydraulic fracturing, a controversial practice known also as fracking. A ban was enacted after small tremors were reported during fracking operations in the country last year.

British Chancellor of the Exchequer George Osborne said in New York that he wanted Britain to mirror the shale natural gas boom in the United States.

"We need to get the regulation right," he was quoted by The Daily Telegraph newspaper in London as saying. "Second, we need to get the tax regime right."

Osborne in early December said shale natural gas is expected to make a "substantial contribution" to domestic supplies in the next decade.

Some chemicals associated with hydraulic fracturing are considered environmental threats. British officials said companies must assess the potential risk of tremors and other issues before moving ahead with shale operations.

The British Geological Survey in a 2010 study said the shale gas reserve potential could be as large as 5.3 trillion cubic feet but cautioned "there are no reliable indicators of potential productivity."