PDF《Fossil fuel exploration》

2009 national budget, the field-allowance rule allows companies that operate in certain types of fields to claim an exemption from the 32% supplementary charge on income normally applied to oil and gas income, meaning these companies pay only the 30% corporate tax (Powell, 2014). The UK Government argues that this measure is not a subsidy, because it removes an additional tax specific to the oil and gas industry. However, because the field-allowance rule is targeted explicitly at expanding oil and gas reserves and production by lowering tax rates, it is considered a subsidy for the purposes of this paper. With expansions to the field allowance subsidy in the 2010,

2012 and

2013 budgets, exploration in the following types of new oil and gas fields qualify for the this tax exemption: ? ? small fields ? ? ultra-heavy oil fields ? ? ultra high-pressure or high-temperature fields ? ? remote deep-water gas fields ? ? large deep-water oil fields ? ? large shallow-water gas fields ? ? shale-gas fields. While the field allowance is not an explicit exploration- specific subsidy, its emphasis on the development of new oil fields incentivises oil and gas exploration. According to a

2014 study by Friends of the Earth, the theoretical maximum for the total value of field allowances issued in FY 2013/14, had they been taken up in full, was ?2.69 billion ($4.61 billion) over five years, or $922 million each year. The UK Department of Energy and Climate Change responded that the actual value of field allowances issued in 2013/14 was ?1.06 billion ($1.82 billion) over five years, or $364 million each year (Powell, 2014). Field allowances have been key to opening up new unconventional oil and gas fields in the UK. According to Friends of the Earth, '

Every single new field licensed in United Kingdom? 2?? 2? Overseas Development Institute and Oil Change International Figure 1. Oil and gas exploration expenditure and reserves in the UK

0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500

2008 2009

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2012 2013 Oil and gas reserves (million barrels of oil equivalent) Exploration expenditure (million $) Oil &

Gas Explorai........