Poland approves shale gas bill

The Polish government has approved a new bill designed to encourage investment in shale gas in the country.

The bill is set to relieve investors from the country’s special taxes on shale gas in a bid to speed up exploration work. Taxes on exploration will not commence until the year 2020, and after that the tax burden should not be higher than 40% of income.

The legislation will simplify and accelerate licence procedures. The government has plans to introduce single extraction as well as exploration permits. The Polish government has also decided to scrap the idea of using the state-controlled National Energy Resources Operator (NOKE), which holds a stake in all shale gas licences in the country.

Poland Prime Minister Donald Tusk said that action was taken early owing to the current crisis in Ukraine.

"The idea behind the draft law is to make possible intensive exploration and extraction of shale gas," Tusk told AP.

The draft law is still required to pass through parliament after securing approval from the government. This process is expected to take some time.

Around 60% of Poland’s annual gas demand is imported from Russian natural gas extractor Gazprom.

Shale gas, natural gas trapped in porous shale rock, is extracted though hydraulic fracturing, or fracking. The fracking technique involves pumping huge amounts of water into horizontal wells drilled in the rock.