The UK Government has announced that it will offer tax incentives for firms involved in extraction of shale gas as part of the Budget 2013.

The incentives for `fracking' by the UK government have raised some concerns as many believe that the process has a huge impact on the environment. Even as neighbouring Ireland is still awaiting reports to determine if it will back the process, the UK government has announced a promotion strategy for extraction of shale gas and has said that Shale gas is a part of the country's energy strategy.

The UK government has announced that a new shale gas field allowance will allow some developers to be exempt from taxes in the early stages of its development. The move is likely to boost the shale gas industry and ensure that the country's shale gas reserves are properly tapped. The government will have a revised planning system for shale gas in the country soon.  Chancellor of the Exchequer George Osborne said that the wants the UK to be able to tap into new sources of low cost energy.

Fracking involves creating little explosions underground and then flooding with water and chemicals to obtain gas trapped in shale rocks. The Chancellor and some business leaders are enthusiastically backing the decision while others are critical of the controversial technique. Environmentalists have cited the examples from the US where there have been incidences of water pollution by chemicals used in the process and leakage of methane.