* UK shale gas exploration can resume with proper monitoring
* DECC holds six-week public consultation on fracking report
* Shale gas firms to use "traffic light" tremor warning system
By Alessandra Prentice
LONDON, April 17 (Reuters) - The UK government on Tuesday backed the exploration of shale gas nearly one year after it temporarily banned the drilling method which triggered two earthquakes in Britain but that has also revolutionised the U.S. energy market.
An expert report commissioned by the government said shale gas fracking, a process where pressurised water and chemicals are pumped underground to open shale rocks and release trapped gas, was safe to resume with tighter rules on seismic monitoring and drilling surveys.
"The risk of seismic activity associated with hydraulic fracking operations is small and the probability of damage is extremely small - we suggest fracking can continue under our recommendations," one of the report's authors, the British Geological Society's Brian Baptie, said at a briefing.
The energy ministry is inviting public comment on the report's findings over the next six weeks, after which it will issue its final ruling on the future of UK shale gas exploration.
The experts published their findings after reviewing a series of post-earthquake studies published by Cuadrilla Resources, a UK firm which was forced to halt its shale gas operations near Blackpool in northwest England after fracking triggered small earthquakes in May 2011.
They also recommended the use of a "traffic light" control system, where operations are suspended if a red light indicates seismic activity at a threshold of 0.5 or above, well below a level which could cause structural damage on the surface.
The tremors measured near Blackpool last year reached a level of around 2 .
While the report agreed with Cuadrilla's investigations as a whole, it said there was not enough data to confirm the company's claim that it was unlikely similar earthquakes would reoccur.
In the U.S. the exploration of shale gas has pushed gas prices to 10-year lows and companies such as Cheniere Energy are gearing up to export the excess fuel.
Activists on both sides of the Atlantic have lobbied politicians to ban fracking on environmental concerns, including the dangers of pollution of ground water and leakage of gas into the atmosphere.
France, which has some of Europe's largest shale gas reserves, last year banned the use of fracking on worries about environmental damage.
In the UK, Cuadrilla has said its site near Blackpool had 200 trillion cubic feet of gas in place - enough to cover UK demand for generations, although experts have cast doubt on the claims. (Editing by Karolin Schaps)