Chemicals used to tap natural gas wells in the booming practice known as fracking may be responsible for groundwater contamination in a small town in Wyoming, the U.S. Environmental Protection Agency said Thursday.
The finding - the first of its kind for the agency - could pose a major stumbling block to U.S. energy firms, whose rush to employ the new drilling technique has sparked economic booms, soaring land values and political debates in rural Pennsylvania, the North Dakota plains and other areas across the country.
EPA researchers studied water pollution complaints in Pavillion, Wyo., for the past three years and found "methane, other petroleum hydrocarbons and other chemical compounds" in the aquifer, possibly as a result of hydraulic fracturing in the area. Fracking uses a mixture of water, sand and chemicals to crack underground rock and allow natural gas to flow freely.
Critics have long claimed the technique can contaminate local water supplies, but the gas industry has denied those charges. Some have even questioned the EPA's role in regulating the fracking boom, saying oversight was best left to state-level regulators.
Daniel Kish, senior vice president for policy at the pro-fracking Institute for Energy Research, said the EPA's preliminary finding on water contamination deserves "the strictest scrutiny" given past reports that were later disproved.
"Under Administrator Lisa Jackson, the EPA has played an increasingly politicized role in regulatory enforcement," Mr. Kish said in a statement Thursday. "Demonstrating the validity of this report in the face of 50 years of safe hydraulic fracturing without any evidence of contamination is a burden that Administrator Jackson must now bear."
Thursday's EPA report marks the first time that federal investigators have found fracking chemicals in drinking water supplies, though the agency stressed that the "findings are specific to Pavillion," where the process is taking place in proximity to wells for drinking water.
The vast majority of fracking occurs at depths far below the water table, and drilling firms routinely seal their wells with layers of cement and piping to protect drinking supplies.
The EPA's findings will be turned over to an independent scientific panel for review, the agency said.
The owner of the Pavillion gas fields, Encana Corp., expressed skepticism of the EPA's assertions and said he feared the agency could hand-pick a review board fundamentally opposed to fracking.
"What they have here really isn't a conclusion," Encana spokesman Doug Hock said Thursday. "We would like to see a true peer review. Let's get a credible third party to this."
The EPA has advised the 170 residents of Pavillion to avoid using well water for drinking or cooking. Mr. Hock said his firm is now providing clean water to nearly two dozen families in the area, and Encana is committed to "a long-term solution so those folks have good water."
The federal report could have a major impact beyond Pavillion as several states decide whether to outlaw fracking entirely. In August, New Jersey Gov. Chris Christie, a Republican, imposed a one-year moratorium on fracking in the Garden State, and he will make a final decision after seeing the draft results of an EPA investigation due for release next year.
New York has implemented a temporary ban on gas drilling permits as regulators wait for the results of a three-year environmental study of the practice. The state's draft findings will remain open for public comment until Jan. 13. Officials then could issue permits if they are convinced that fracking won't pollute drinking water or harm the environment. Several upstate communities already have urged a ban on the procedure in the state.
Colorado and other states are considering laws that would force natural gas companies to publicly disclose all products used in the construction of fracking sites.
But many companies, particularly those drilling in the vast Marcellus Shale region in the eastern U.S., already have disclosed the substances they use. Some even list the compounds on their websites.
The chemical cocktails had been kept secret for years, but industry leaders have argued that the reason was to keep competitors from simply copying the most effective mixtures.
They also argue that it's too soon to put much stock in the EPA's Pavillion report.
"Environmental protection is critical to our industry. And we are confident that as the critical peer-review process moves forward, scientists and engineers on the ground in Wyoming will be able to secure more facts. However, it is entirely too early in this process, given the lack of peer-reviewed data, to arrive at any kind of absolute conclusions," said Kathryn Klaber, president of the Marcellus Shale Coalition, which represents companies drilling in Pennsylvania, West Virginia and surrounding states in the Marcellus, one of the world's largest known gas deposits.
Thursday's report is the precursor to a much broader fracking study that the EPA plans to release next year. The agency is monitoring hydraulic fracturing operations in DeSoto Parish, La., and Washington County, Pa., the heart of the Marcellus region. The EPA is also conducting five "retrospective case studies" in North Dakota, Texas, Colorado and two sites in Pennsylvania, where fracking is suspected to have polluted drinking water.
The report also will be subject to public comment and review, and the final version of the study isn't due until 2014.
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