UPDATE 2-UK firm says shale fracking caused earthquakes
* Firm says little risk of further earthquakes
* Environmental groups say findings add to concerns
* Activists climb rig at Cuadrilla site (Updates throughout)
By Oleg Vukmanovic
LONDON, Nov 2 (Reuters) - Shale gas exploration triggered small earthquakes near Blackpool in northwest England earlier this year, UK firm Cuadrilla Resources said, adding to concerns about the safety of a technology that is transforming U.S. energy markets.
A spokesman said on Wednesday tremors were triggered by pumping vast quantities of water at high pressure 3 kilometres underground through drill holes in a process known as hydraulic fracturing, or fracking, which is designed to prop open shale rocks and release trapped gas.
"It is highly probable that the hydraulic fracturing of Cuadrilla's Preese Hall-1 well did trigger a number of minor seismic events," a report commissioned by the company said.
Environmentalists on both sides of the Atlantic have lobbied politicians to ban fracking on concerns it leads to pollution of ground water and leakage of gas into the atmosphere.
Britain suspended fracking following the May tremor and commissioned a report into the process, but Cuadrilla has since said there was little risk that the tremors in April and May of 2.3 and 1.5 on the Richter scale, respectively, would be repeated.
Cuadrilla said the drill site's combination of geological factors is "extremely rare" and would be unlikely to occur together at future drilling locations.
Even if tremors occurred, the magnitude of any future tremors would be no more than around 3 on the Richter scale as a "worst-case scenario", it said.
"Cuadrilla's water injection operations take place very far below the earth's surface, which significantly reduces the likelihood of a seismic event of less than 3 on the Richter scale having any impact at all on the surface," the company said in a statement.
The Lichfield-based company has said its site near Blackpool had 200 trillion cubic feet of gas in place - enough to cover UK demand for years.
However, experts questioned the size of the find, and a financing conducted by a key shareholder in Cuadrilla suggested gas reserves were below the company's estimate.
ACTIVISTS SLAM FINDINGS
Cuadrilla has proposed implementing a seismic early warning system to make local people feel safer. But activist and environmental groups say the measure would mask the real risks of fracking in Britain.
WWF-UK has called for a moratorium on shale gas exploration until environmental risks have been properly assessed.
"These findings are worrying and are likely to add to the very real concerns that people have about fracking and shale gas," Nick Molho, head of energy policy at WWF-UK said.
France banned shale drilling in July in the face of concerns about potential environmental damage due to the large amounts of water and detergents used in fracking.
On top of earthquake risks, the U.S. experience shows shale drilling sucks funding away from renewable energy projects while at the same time polluting air and water supplies, according to Friends of the Earth.
However, legal experts say findings presented to the UK's Department of Energy and Climate Change signal that a suspension on fracking in the UK is not likely to last.
"In the U.S., where significant shale gas development has been underway for many years ... there have been very few instances of water contamination," said Lynne Freeman, partner at law firm Reed Smith.
"Those instances have largely resulted from surface spills or improperly cemented well casing, and the fracking process has earned a strong safety and environmental record," she said.
PROTESTERS STORM RIG
Ahead of the fracking report's publication, nine protesters from Frack-Off, a UK anti-fracking group, ran on to the company's drilling site at Hesketh Bank before dawn and scaled the rig using climbing equipment, the group said.
Frack-Off says it intended to draw attention to the harmful effects of shale drilling on local environments and bring operations to a standstill "for as long as possible".
Cuadrilla said it is working with police to remove four protesters attached to a rig. (Additional reporting by Tom Bergin; editing by Jane Baird)
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