* Shale gas has smaller carbon footprint than LNG, coal
* Says cost of low-carbon technology should be reduced
LONDON, Sept 9 (Reuters) - Shale gas production in Britain should not hinder the UK's ability to meet its climate change targets, a report by the Department of Energy and Climate Change's chief scientific adviser suggested on Monday.
Britain is in the early stages of shale gas exploration but the government is eager to stimulate a U.S.-style production boom and offset dwindling North Sea oil and gas reserves.
To encourage investment, the government unveiled tax breaks for shale gas producers in July.
However, opponents of "fracking", which retrieves gas and oil trapped in tight layered rock formations by injecting a high-pressure chemical solution, fear the process may trigger small earthquakes and pollute water supplies.
"Our study indicates that shale gas, if properly regulated, is likely to have a greenhouse gas footprint no worse than the other fossil fuels that society currently depends on," the chief scientific adviser, David Mackay, said.
The report estimated that the emissions intensity, or carbon footprint, of shale gas extraction and use is likely to be between 200 and 253 grams of carbon dioxide equivalent per kilowatt hour (CO2e/kWh) of chemical energy.
This compares to a 199-207g CO2e/kWh emissions intensity for conventional gas and 233-270g CO2e/kWh for liquefied natural gas.
Coal has an emissions intensity of 837-1,130g CO2e/kWh.
Britain aims to reduce its greenhouse gas emissions by 80 percent by 2050.
The report advised that the cost of low-carbon technologies, such as carbon capture and storage, should still be reduced to ensure shale gas exploration does not increase emissions.
An international climate deal was also needed to help curb rising emissions.
It has been estimated that Britain might have major shale reserves (around 1,300 trillion cubic feet) but the amount that could be developed commercially is uncertain.
"Nobody can say, for sure, how much onshore UK shale gas resource exists or how much of it can be commercially extracted, so we can't bank on shale gas to solve all our energy challenges, today or this decade," said Edward Davey, secretary of state for energy and climate change.
"We must make sure that the rigorous regulation we are putting in place is followed to the letter, to protect the local environment," he added.
Cuadrilla is the only company to have fracked a shale gas well in Britain, making its activities a target for protesters.
(Reporting by Nina Chestney and Karolin Schaps; Editing by Dale Hudson)