UK water companies warn of drinking water contamination from fracking

Water companies in the UK have warned that drinking water could be contaminated with methane gas and chemicals due to fracking.

According to Water UK, which represents all major UK water suppliers, the shale gas extraction method posed a threat if not "carefully planned and carried out". It further warned that the huge use of water by fracking could cause shortages in areas of low supply like South East England.

According to shale gas company Cuadrilla, there were no proven cases of aquifer contamination due to fracking.

Jim Marshall of Water UK called on fracking firms for holding "upfront discussions" with water companies before fracking became widespread in the UK.

He added, the water industry was not "taking sides" in the fracking debate, but wanted to ensure that corners were not cut and standards compromised, leaving them all counting the cost for years to come.

Fracking - short for "hydraulic fracturing" - involves drilling deep underground with release of a high-pressure mix of water, sand and hundreds of chemicals for cracking of rocks and releasing of gas stored inside.

Water companies are worried the process could involve contamination of drinking water aquifers that lay above shale gas reserves.

Meanwhile, environmentalists were furious as chancellor George Osborne unveiled 'most generous tax breaks in world' for fracking, with 30 per cent rate for shale gas producers in a bid to enhance the UK's energy security.

The 30 per cent tax rate for onshore shale gas production compares with a top rate of 62 per cent on new North Sea oil operations and up to 81 per cent for older offshore fields.

Though no shale gas had so far been produced in the UK, exploratory drilling was under way and the British Geological Survey recently revealed that there could be huge resources waiting to be unlocked, possibly enough to supply the country for 25 years.

The chancellor said shale gas was a resource with huge potential to broaden the UK's energy mix. The government wanted to create the right conditions for industry to explore and unlock that potential in a way that allowed communities to share in the benefits, he added.

According to him, the new tax regime, which he wanted to make the most generous for shale in the world, would contribute to that. He said he wanted the UK to be a leader of the shale gas revolution – because it had the potential to create thousands of jobs and keep energy bills low for millions of people.