Published Friday, 19 July 2013
Fracking has caused controversy in counties Fermanagh and Leitrim. (© UTV)
Chancellor George Osborne said a new allowance will more than halve the tax due on income from production, in order to encourage further use of the technique across the UK.
Fracking involves creating small explosions underground then injecting water and chemicals to release gas trapped in cavities in shale rock.
Australian mining firm Tamboran Resources has carried out preliminary analysis on a site in the south west of Co Fermanagh and in north Leitrim.
They say Fermanagh's natural gas field could provide up to 50 years of gas supply, create thousands of jobs and generate millions of pounds in tax revenue.
However, there are a growing number of people who are opposed to fracking.
We’re going to be left with oil rigs and the complete industrialisation of a rural area which no-one will come to see
Phil Flanaghan, MLA
They say it is to blame for earthquakes and pollution in other parts of the world and could destroy the Lakeland county's clean, green reputation.
The government backing comes after a recent report from the British Geological Survey revealed there was twice as much shale gas in the north of England as previously thought.
Mr Osborne said the proposed reduction in tax, from 62% to 30%, is part of a bid to create the "most generous" regime for shale gas in the world.
He added: "Shale gas is a resource with huge potential to broaden the UK's energy mix.
"We want to create the right conditions for industry to explore and unlock that potential in a way that allows communities to share in the benefits. This new tax regime, which I want to make the most generous for shale in the world, will contribute to that.
"I want Britain to be a leader of the shale gas revolution - because it has the potential to create thousands of jobs and keep energy bills low for millions of people."
Sinn Féin's Phil Flanaghan says fracking has the potential to spoil Fermanagh's countryside.
"This is an outrageous decision to further subsidise large businesses across Britain and the north," the Fermanagh and South Tyrone MLA told UTV.
"What has recently been told about Fermanagh is that, because the G8 took place here, we'll benefit from people coming to see how beautiful the county is.
"But if we continue down the road of fracking our natural heritage, our lovely clean, green environment is going to disappear."
© UTV News