Speaking to the House of Lords Economic Affairs Committee yesterday, Osborne said shale gas does have the “potential” to bring gas prices down, but also downplayed the scale of the impact it could have.
He said: “I just don’t want to over-promise; I don’t want to go out there and say it is the solution to all of this country’s economic problems.”
Osborne added that “no one knows” what the impact that UK shale gas production would have because of the current uncertainties around the shale reserves and how recoverable they are.
He told the committee he did not want to suggest the UK would see the kind of price cuts – of up to 40 per cent – that have been seen in America.
Osborne said: “I think it will have an impact and I hope it will have a significant impact.”
However, he said that because the UK has more connections to the European and world gas markets that the US, the impact from shale gas production in the UK is likely to be less profound.