Canadians face a Pandora's box of potential environmental and health risks as the oil industry charges forward with hydraulic fracturing techniques that are needed to unlock vast natural gas and oil deposits across the country, says a new report for the federal government.

In a 260-page study to be released Thursday, the expert panel concluded that there simply isn't enough known about the impacts of hydraulic fracturing – or fracking – to declare it safe, and that key elements of the provinces' regulatory systems "are not based on strong science and remain untested" while there is virtually no federal regulation.

The report was prepared by the Council of Canadian Academies, an independent organization that pulls together scientists and other experts to provide independent policy-related assessments, but stops short of explicit advice.

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In September of 2011, former environment minister Peter Kent asked the council to review the impacts of shale gas development in Canada. But the same drilling techniques used to extract natural gas from shale rock are now being employed to produce crude oil in Alberta, Saskatchewan and Manitoba, and its findings relate to the broader issue of the safety of modern drilling techniques.

"I think the conclusion is that the development needs to go slow enough so that the science can happen," said John Cherry, associate director of Guelph University's G360 Centre for Applied Groundwater Research and chair of the expert panel that produced the report.

In the United States, the shale gas and tight oil boom has transformed the American economy and its sense of energy security, and many in Canada are eager to replicate that success.

The industry is already deploying fracking methods to drill for oil and gas in Western Canada. Most of the 11,150 wells forecast to be drilled this year in Western Canada will employ hydraulic fracturing, in which companies use chemically laced water to blast open non-porous rock to extract gas and oil.

The controversial technology is key to British Columbia's ambitions to become a major exporter of liquefied natural gas to Asia, shipping gas from the rich Montney and Horn River fields in northeastern B.C. Premier Christy Clark is a enthusiastic booster of the LNG strategy, and is gearing her province up for an anticipated economic boom.

In such provinces as Quebec and New Brunswick, the industry is eager to determine whether gas deposits can be profitably developed, but there is staunch opposition among local residents. Quebec has had a moratorium while it studies the issue, while New Brunswick has faced angry and sometimes violent demonstrations as opponents try to stop the fledgling industry there from drilling.

A spokesman for federal Environment Minister Leona Aglukkaq said the assessment identifies areas of research that need to be pursued and that effort is under way.

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"We believe that shale gas deposits can be developed safely, responsibly, and in compliance with the strict environmental policies and regulations in place," Ted Laking, Ms. Aglukkaq's director of communications, said in an e-mail.

New Brunswick Energy Minister Craig Leonard said he's "very comfortable" that the province can manage the risks associated with shale gas development, saying it has adopted the best regulatory practices from other North American jurisdictions.

In B.C., Saskatchewan and Alberta, where most drilling activity occurs, provincial regulators have imposed rules on well construction, water use and treatment of waste water, which must be re-injected under ground. As well, industry associations have adopted their own standards for safe practices and require companies to reveal what chemicals they use in fracking.

"I think there is a high degree of confidence on industry's part that we have the technology and we have the regulatory regime – particularly in the mature jurisdictions – to manage for this," said David Pryce, vice-president at the Canadian Association of Petroleum Producers. He added that regulations can be improved in some areas and Alberta is now assessing how to manage the cumulative impacts of intensive drilling, rather than simply looking on a well-by-well basis.

Environmentalists have little confidence in the provincial regulators. In B.C., the environmental group, EcoJustice, is awaiting a decision on a lawsuit it launched against the B.C. Oil and Gas Commission, claiming the regulator had allowed the industry to evade water-use rules.

"The entire regulatory regime in B.C. has been crafted to facilitate gas development," EcoJustice lawyer Karen Campbell said in an interview.

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The council concludes that public trust can only be achieved when additional, independent research provides answers to nagging questions – before intensive drilling occurs.