Energy Secretary Ed Davey has announced that there are plans to set up a sovereign wealth fund in the UK from the extraction of shale gas.
Davey said it is part of the UK Government’s “broader strategy to strengthen our security of supply in a cost-effective way for future generations”.
Despite local opposition over shale’s extraction methods, Britain is betting on shale gas to help boost energy production. Possible sites so far have been chosen across the North of England with test drilling licences granted in Lancashire, Cheshire, Merseyside and Greater Manchester.
The British Geological Survey estimates the sites could hold 1,300 trillion cubic feet of shale gas.
Mr Davey added: “The sovereign wealth fund is a great opportunity for the whole of the UK – everyone will reap benefits from it and I’m pleased to announce my Department will be establishing it when commercial production begins. It’s about storing the financial benefits of shale production and putting it towards a low carbon energy future.”
Chancellor George Osborne said in a separate statement, he fund would be a way of “making sure money is not squandered on day-to-day spending”.
Kuwait, Norway and Abu Dhabi have already set up their own shale sovereign funds to save and and invest proceeds of extraction for generations to come.