* High public interest in unconventional oil and gas
* Environment Agency suggests longer application process
* Could delay shale gas activities for 6 months
LONDON, Aug 9 (Reuters) - Britain's Environment Agency (EA) proposed new guidance on Friday that could further delay the already lengthy application process for launching shale and other unconventional oil and gas exploration.
Beset by protests that have made the question of whether to allow shale drilling a national issue, shale firms complain that the UK's complex application process takes months longer than in the United States, discouraging investment.
In a technical guidance document on its website, the EA proposed taking longer than normal to decide whether to give an environmental permit for onshore oil and gas exploration if a site is of "high public interest".
If approved, the agency said that the new guidance could increase the time scale for granting environmental permits from the current 13 weeks to six months or more to give it time to consult properly with local communities.
That would be just the latest blow to an industry that the government, keen on the jobs and revenue that Britain's theoretically substantial shale gas reserves could generate, has said it is keen to support.
"This has the potential to delay the exploration of shale gas resources in the UK," said Simon Colvin, an expert on energy and environmental regulations at law firm Pinsent Masons.
"The high public interest status could mean an extremely lengthy process, taking into account a number of rounds of community consultation."
The proposal is part of a consultation document which people can comment on until October 23. The agency will then consider the responses before publishing a final version of the guidance later this year.
"Given the current level of public interest in unconventional gas and oil exploration, it's likely that we will treat such sites as being of high public interest," the agency said in the document on its website. here
It has been estimated that Britain might have major shale reserves but the amount which could be developed commercially is still uncertain.
The government is looking to shale gas to reduce its reliance on natural gas imports and unveiled tax breaks last month for shale gas developers, which analysts said could attract more companies.
British exploration firms IGas and Cuadrilla are at the exploration stage in shale gas, while other firms are watching developments with interest. But they continue to face significant barriers.
Fracking, which retrieves gas and oil trapped in tight layered rock formations by injecting high-pressure water, sand and chemicals, has already been banned for a year in 2011 after triggering small earthquakes. Protestors successfully blocked access to a Cuadrilla site in southern England last month.
Developers already need to make nine separate applications to the EA for a single exploratory well. They also have to get planning permission from the Department of Energy and Climate Change and the Health and Safety Executive.
"Delaying the process further is simply another layer of red tape at the early stages of exploration," said Colvin.