A controversial gas extraction method which triggered two earth tremors near Blackpool last year should continue, but under strict conditions, a government-named panel of experts says.
The process - fracking - involves pumping water and chemicals into shale rock at high pressure to extract gas.
Shale gas is seen as a way of ensuring relatively cheap energy supplies.
But critics have warned of possible side effects - including the contamination of ground water.
Test fracking (short for "fracturing") by the Cuadrilla company near Blackpool stopped in 2011 when two earthquakes were felt at the surface.
The government-appointed panel believes there will probably be more quakes but that they will be too small to do structural damage above ground. It recommends more monitoring.
The panel's report now goes out for a six-week consultation period, with the Department of Energy and Climate Change (Decc) issuing a firm set of regulations at some point after that.
The panel agrees with a Cuadrilla report from late last year that test fracks at the company's Preese Hall site did cause two earthquakes of Magnitudes 2.3 and 1.5 in April and May.
"[Cuadrilla's experts] said there was a very low probability of other earthquakes during future treatments of other wells," said one of the report's authors, Prof Peter Styles from Keele University.
"We agree that [last year's] events are attributable to the existence of an adjacent geological fault that had not been identified.
"There might be other comparable faults, (and) we believe it's not possible to categorically reject the possibility of further quakes."
Such events might well be felt at the surface but are extremely unlikely to be significant, he said.
Shale gas is found in layers of relatively weak sedimentary rock, typically several kilometres underground.
Coal mining has generated thousands of earthquakes down the years; and on the basis of all the data gathered from this, the panel says, fracking is unlikely to produce anything larger than a Magnitude 3.
"There's no record of a quake at this size doing any structural damage," said Prof Styles. "But they would be strongly felt, and there is a possibility of superficial damage."
When asked on the BBC's Today programme whether he was any more concerned about fracking than coal-mining, Dr Brian Baptie, head of seismology at the British Geological Survey (BGS) said: "No; given appropriate guidelines and appropriate monitoring, I see no reason why it shouldn't go ahead."
The panel recommends four precautions regarding Cuadrilla's Preese Hall operation and other projects in the Bowland Shale area of Lancashire:
- all injections of fracking fluid must include a preliminary injection, followed by monitoring
- the growth of fractures in the shale should be monitored
- operations should monitor seismic events in real time
- operators should observe a "traffic light" regime, with quakes of magnitude 0.5 or above triggering a "red light" and an immediate halt, followed by (unspecified) remedial action.
Magnitude 0.5 is a considerably lower threshold than the 1.7 proposed by Cuadrilla's experts, though the panel emphasised that other countries such as Switzerland use the still higher threshold of 2.3.
"We've opted for a much lower, more conservative option," said Dr Baptie.
"Even with real-time monitoring, there will be a time lag between what we've put into the ground and what we get back out in the form of earthquakes."
Operators should also minimise quakes by allowing the fracking liquid to flow back up the well soon after injection, the panel says, rather than keeping the rock under prolonged pressure.
It also recommends that seismic hazards should be properly assessed before new exploration is permitted.
This would involve seismic monitoring to establish what levels of activity are normal in that location, analysis of geological faults, and the use of computer models to assess the potential impact of any induced earthquakes.
The three members of the panel - Prof Styles, Dr Baptie and Dr Chris Green, an independent fracking expert based in Lancashire - said this information should be publicly available.
Mark Miller, Cuadrilla's chief executive, welcomed the report.
"We are pleased that the experts have come to a clear conclusion that it is safe to allow us to resume hydraulic fracturing, following the procedures outlined in the review," he said.
He said the company had already begun to amend procedures in light of expert advice.
Richard Moorman, CEO of Tamboran Resources, a company with permits to frack in Northern Ireland, said the risk of tremors or water contamination was low.
"The reality of any kind of incident would be extremely local; it's also extremely uncommon."
The government sees shale gas as a valuable energy resource for the future.
Cuadrilla claims that the site it has explored in the Bowland Shale contains 200 trillion cubic feet of gas, more than the UK's known offshore reserve - though only a portion of this would be economically recoverable.
"If shale gas is to be part of the UK's energy mix we need to have a good understanding of its potential environmental impacts and what can be done to mitigate those impacts," said David MacKay, Decc's chief scientific adviser.
"This comprehensive independent expert review of Cuadrilla's evidence suggests a set of robust measures to make sure future seismic risks are minimised - not just at this location but at any other potential sites across the UK."
Other companies want to explore for shale gas in Fermanagh, the Vale of Glamorgan, Somerset, Kent and Sussex.
But local groups are concerned about groundwater contamination as well as earthquakes, while environment groups point out that basing the UK's energy strategy on gas will make it much harder to achieve climate change targets.
Speaking on the Today programme, Tony Jupiter, former head of Friends of the Earth UK, said that the recommendations needed to go further:
"I remain to be convinced... that this is a credible part of meeting the 80% reduction targets in greenhouse gas emissions that are enshrined in law in this country."
"We don't need earth tremor-causing fracking to meet our power needs - we need a seismic shift in energy policy," said Andy Atkins, director of Friends of the Earth UK.
"We should be developing the huge potential of clean British energy from the sun, wind and waves, not more dirty and dangerous fossil fuels."
But Simon Moore, environment and energy research fellow at thinktank Policy Exchange, thinks that shale gas could also be an "environmental opportunity".
"It's something that can potentially help with meeting our climate change gas goals".
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