It's confusing as to how shale gas extraction offers the oil industry "a new green message", as it was suggested last week in an interview with Shell's outgoing chairman. Look a little closer at shale gas and it comes with all the type of problems we're coming to expect from extracting unconventional hydrocarbons. Now that we've got much of the easy stuff out of the ground, it's all getting a bit more complicated, leading to the use of new technologies to get to previously inaccessible reserves, and in so doing, creating new environmental problems we hadn't previously envisaged. Tar sands developments in Alberta, Canada, are the obvious case in point.

With shale gas, the technology involved is called hydraulic fracturing – "fracking" for short. This involves blasting a solution of water, sand and various chemicals into the shale bed, two to three kilometres below ground, to fracture the rock and mobilise the gas. In order to get to the shale formation, operations have to drill through the aquifer, creating the potential for contamination; either from chemicals used in the process or those that are activated during fracking.

In the US, where the industry is more developed, accusations of groundwater contamination abound. If you want to see some examples, take a look at the Oscar-nominated documentary Gasland which the Co-operative helped distribute earlier this year if you want to see some examples. In response, the US Environmental Protection Agency is undertaking a review of fracking operations. We've suggested to government that the UK takes heed of this and imposes a moratorium on development, at least until this research is completed.

But surely shale gas is good news at the global level, if it will displace much more polluting coal? Indeed, this might happen if we had a legally binding global cap on emissions (the sort of thing we were meant to have agreed on at the Copenhagen climate summit in 2009, but didn't). Unfortunately, in the energy-hungry world that we live in, there's just as much chance that the likes of India and China will simply burn shale gas in addition to their coal reserves as they quite fairly pursue economic development. If you don't believe me, have a look at the situation in the US where the massive expansion in shale gas is simply helping to meet the energy demands of a growing economy that doesn't have a carbon cap and is failing to displace coal.

Research undertaken by the Tyndall Centre (and funded by the Co-operative) suggests that burning the world's shale gas reserves would increase atmospheric CO 2 concentrations by up to 11 parts per million (ppm).That's hardly conducive to stablising greenhouse gases - current levels of CO 2 are around 392ppm and 350 is the level considered to be "safe" by many experts.

Even if this could be mitigated by capturing the emissions from shale gas with carbon capture and storage (CCS) – a very big if – there's another problem with the green credentials of shale gas. Other emissions from the extraction process, such as methane, could actually mean its carbon footprint is more like that of coal, and these wider emissions can't be dealt with through CCS. According to research to be published this week by Cornell University in the US: "Compared to coal, the footprint of shale gas [in terms of climate impact] is at least 20% greater and perhaps more than twice as great on the 20-year horizon, and is comparable over 100 years."

Maybe I'm missing something, but wouldn't diversification into renewable energy be a more credible "new green message" for the oil industry?

• Chris Shearlock is the sustainable development manager at the Co-operative Group