The potentially huge scale of the exploration has stirred fears of contamination, radioactive wastes, climate pollution and explosions.
More than 20,000 square kilometres (7800 square miles), covering the entire central belt and a part of the southwest, have been earmarked by the UK Government for possible exploitation by controversial technologies such as fracking to extract gas from wells dug deep into the ground.
Plans are most advanced in Scotland, where proposals to drill 22 wells to tap the methane gas in coal seams near Falkirk and Stirling are now facing hundreds of objections from local communities.
Opposition has also come from leading housebuilders Cala and Persimmon, and from Network Rail, which is concerned about the railway line to Perth and Dundee being damaged by a gas blast.
In his autumn Budget statement last week, Osborne announced the creation of a new Government office to promote "unconventional gas" and promised tax breaks for companies mining underground shale gas.
Referring to the gas boom in the US, he said: "We don't want British families and businesses to be left behind as gas prices tumble on the other side of the Atlantic."
The UK Department of Energy and Climate Change (DECC) also published a detailed strategy to boost gas production. And in the next few days, UK Energy Secretary Ed Davey, is expected to lift the suspension on fracking – the controversial operation to fracture rock to force out gas – which was halted while earthquake risks were investigated.
To help compensate for the decline in gas from under the North Sea, the DECC is planning to open up new areas of the UK mainland to gas exploration and development. This will make huge swathes of central and southern Scotland available for companies to bid for licences to drill, as well as large parts of England and Wales.
For the nascent unconventional gas industry, this is all excellent news. Companies involved argue that the moves to exploit UK gas are a way of reducing foreign energy imports, creating profits and providing jobs – all of which they say they can do without unpalatable pollution.
But to others, it's an environmental disaster in the making. Environmentalists point out similar developments in the US and Australia have led to water being contaminated with gender-bender chemicals that can disrupt sexuality, as well as producing other toxic wastes.
One recent study published in an international scientific journal found that 632 chemicals were used to extract underground gas in the US. Of the 353 on which there was detailed information, more than three-quarters were potentially hazardous to health, with over one-third being gender-benders and one-quarter capable of causing cancer.
"These results indicate many chemicals used during the fracturing and drilling stages may have long-term health effects that are not immediately expressed," concluded the researchers from The Endocrine Disruption Exchange in Paonia, Colorado.
In new regulatory guidance, the Scottish Environment Protection Agency (Sepa) warns that fracking for gas is "very likely" to bring radioactive wastes to the surface in fluids. The radioactivity is naturally present in the ground, but is released by the process. Sepa also points out that, in addition to the climate pollution caused by burning the gas, there could be accidental emissions. Releasing methane, a much more potent greenhouse gas than carbon, would help accelerate global warming, it says.
Sepa is tightening its regulation of unconventional gas extraction, and says that after April 2013, operators will be required to say what chemicals they want to use for drilling operations.
Scotland is rich in coalbed methane gas because of its coal reserves. The most advanced and most ambitious plan in Scotland is to mine methane contained in the coalbeds that underlie areas near Falkirk and Stirling.
Some 16 exploratory wells have been dug, and the Australian company Dart Energy has applied for planning permission to sink 22 production wells at 14 sites. It has signed a five-year, £300 million deal with SSE for the supply of gas, and hopes to start delivery towards the end of next year.
Dart has made clear it wants to expand, with "at least" another 20 wells. It has also been quoted saying a further 10-12 wells a year could be needed, suggesting there could be over 200 in the next 20 years.
According to Dart, the first 22 wells will extract 20% of the gas believed to be in the area. Dart, or its predecessor companies, have also sunk test drills for methane at three sites in Clackmannanshire, at Longannet power station in Fife and near Canonbie in Dumfries and Galloway. Another company, Reach Coal Seam Gas, has permission to explore at Deerdykes at Cumbernauld.
Dart's latest planning applications to Falkirk and Stirling councils have prompted more than 400 written objections. Hundreds of locals have flocked to a series of public meetings to voice their criticisms of the plans, which are due to considered in the New Year.
Network Rail has lodged a formal objection because of fears for the safety of the line to the north through Larbert. Its fire safety engineers "have concerns regarding the possible risk of explosion" from a methane gas pipeline that is planned to run close to the railway.
"To remove our objection, the developer must conclusively demonstrate that there will be no increased risk of injury to the travelling public or possible damage to the railway and its associated infrastructure and provide details of what fire safety measures/provisions are proposed to prevent the risk of explosion," the objection states.
Housebuilders Cala and Persimmon are also understood to have formally objected because of the proximity of proposed gas facilities to homes in Kinnaird Village in Larbert.
Maria Montinaro, from the Shieldhill and California Community Council, urged councillors to reject Dart's plans "due to the serious and unjustifiable risks to human health, safety and environmental pollution". It was an unsustainable development "which will primarily benefit private organisations at the expense of local communities and the environment", she said.
Dart, however, maintains underground gas is a "clean, safe and cost effective energy solution for an energy constrained world". Producing coalbed methane in Scotland would boost the Scottish economy, and would reduce reliance on imported gas, it says.
The company stressed it had no plans to frack in Falkirk and Stirling, and the way its wells were designed made that impossible. But it has been given two licences by Sepa "for the injection of fracking fluids into groundwater" in coal seams at Mouldyhills and Broadmeadows near Canonbie, which it has said it is not planning to use.
ACCORDING to Dart, it is focused on developing the coalbed methane in the central belt. "We are in daily communication with representatives from local communities, individuals, residents associations and businesses to help people understand our plans," said a company spokesman.
"Dart Energy follows all the established UK oilfield regulations and oil industry best practice in all of our coalbed methane operations. Our planning application makes it clear that our water-based drilling fluids contain only safe, non-toxic, biodegradable additives, the same type of water-based biodegradable fluids used in conventional wells throughout the UK."
The company says there would be no net increase in climate pollution because its gas would just replace imported gas.
Chris Faulkner, chief executive of Breitling Oil and Gas in Texas, said: "The environmental impacts of fracking can be effectively curtailed through a combination of technology innovation and smart regulation.
"The focus must be on water conservation, earth preservation, and air quality monitoring."
Environmental and community groups, however, are demanding a halt to underground gas exploration and development.
"It's very alarming that coalbed methane developments are allowed to advance before we know the full consequences for the local environment and climate," said Mary Church, a spokesperson for Friends of the Earth and a leading critics of unconventional gas exploitation.
"Communities around the world are seeing the devastating impacts of coalbed methane and shale gas expansion. We need to learn from these experiences and ensure the same doesn't happen here."
Church criticised Sepa and the Scottish government for adopting a "wait and see" approach. "We urge ministers to undertake a thorough review of the full environmental and health impacts of unconventional gas extraction – and the suitability of the regulatory framework to deal with it – before the industry is allowed to roll out any further."
Morag Parnell, from the Women's Environment Network in Scotland, claimed it would be "utter madness" to develop underground gas with all that was known about the toxic pollution it had caused elsewhere.
"Those who are proposing to bring this technology to Scotland seem to willfully ignore this evidence," she said.
"We should not have to wait to count our own Scottish sick and dying before anything is done here."
WHAT EXACTLY IS UNCONVENTIONAL GAS, AND HOW CAN WE GET IT?
The exploitation of what is known as "unconventional gas" – shale gas, coalbed methane and other underground gases – is seen by many in the energy industry as the next big thing. It involves extracting the gas from the deep rock formations in which it is trapped.
Until recently the technical difficulties in tapping the gas meant it was too expensive to exploit. But as gas from the North Sea and other sources runs down, that is changing, and the commercial pressure to mine unconventional gas is increasing.
The problem is that the gas is not in large, handy underground wells. It is in tiny holes scattered through massive volumes of rock, so getting substantial amounts out and up to the surface is tricky.
The different ways of achieving this include:
1: Fracking, hydraulic or ballistic: This frees the gas by deliberately fracturing the rock by drilling down and then pumping in high-pressure liquids, or even detonating explosive charges. Fracking can be used to extract the gas from shale, a type of rock, or to free "tight gas" held in deeper, denser rock formations. It can also be used to help mine the methane that inhabits coal seams.
2: Tapping "coalbed methane": This involves drilling into and along the seams, and then pumping out and disposing of large quantities of water, a process known as dewatering. The removal of water may be enough to stimulate the flow of gas, though sometimes fracking may also be necessary.
The amount of unconventional gas that might be exploitable in Scotland and around the globe looks huge. The International Energy Agency estimates that there may be enough to extend the world's recoverable gas reserves from 120 to 250 years at current consumption levels.
The agency also reckons gas use will rise by more than 50% to account for over one-quarter of world energy demand by 2035. Unconventional gas already accounts for 60% of gas production in the US, and is being touted as the future in eastern Europe.
Western Europe, however, is more nervous, with a moratorium in place in France, and growing opposition in other countries. The UK Government suspended fracking after it was blamed for causing small earthquakes near Blackpool last year, though it is now expected to give it the go-ahead.
Estimates of the UK's unconventional gas reserves vary. The British Geological Survey has put recoverable shale gas reserves at 150 billion cubic metres, equivalent to about 18 months' usage at current rates. There could be significant reserves in Scotland, though it's unclear how much is recoverable.