LONDON (Reuters) - Britain does not need to impose a moratorium on drilling for unconventional gas sources, a parliamentary committee said on Monday, two weeks after France recommended making a freeze on shale gas drilling permanent. There is no evidence that fracking, a process that involves injecting water, sand and chemicals into shale rock formations to extract trapped gas, is directly harmful to the environment, the Energy and Climate Change Committee said in a report published late on Monday.
France's Senate is expected to decide next month whether to permanently ban shale gas drilling and revoke awarded permits, after concerns arose over water pollution due to fracking, or hydraulic fracturing.
"We conclude that, on balance, a moratorium in the UK is not justified or necessary at present. But evidence must continue to be collected and assessed," the committee said.
The discovery of shale gas in the United States caused a drop in domestic gas prices and in November last year led to the first delivery of U.S. liquefied natural gas (LNG) to Britain in half a century.
But reserves of shale gas in Britain are unlikely to become a "game changer" like in the United States, as additional supply would be used domestically rather than for export, the committee said.
"If there were to be a fall in prices it is unlikely to be as dramatic as that seen in the U.S."
The committee's members of parliament, who questioned shale gas experts in four public evidence sessions over six months, recommended the government should further investigate the development of offshore shale gas production.
"There is substantial evidence that UK offshore unconventional gas resources could dwarf the potential onshore supplies," the committee said.
Parliamentarians said the government should explore the impact of introducing tax breaks on offshore shale gas drilling to encourage quicker uptake.
Shale gas drilling in Europe has been most active in Poland and members of parliament said they were concerned that a unilateral Polish shale gas policy might leave Britain at a competitive disadvantage.
"It is important for the UK to monitor the development of shale gas in Poland -- the "barometer of Europe" on this issue -- both in terms of exploration and regulation."
(Reporting by Karolin Schaps, editing by Anthony Barker)
