WASHINGTON - Fluids used to drill for natural gas likely polluted an aquifer in Wyoming, U.S. regulators said on Thursday, offering the first evidence since 1987 that chemicals used in fracking have contaminated drinking water supplies.

 

The draft report of the U.S. Environmental Protection Agency's investigation into the polluted aquifer could have wide implications on a booming industry that has promoted hydraulic fracturing, or fracking, as way to boost U.S. gas and oil production and slash imports. It contradicts industry claims that fracking fluids have never contaminated drinking water.

 

The agency said "the best explanation" for the pollution was that fluids from underground hydraulic fracturing migrated up from fracking operations and contaminated the aquifer. "The presence of these compounds is consistent with migration from areas of gas production," it said.

 

EnCana Corp of Canada, which owns the natural gas field in Pavillion, Wyoming, slammed the report. "The synthetic chemicals could just as easily have come from contamination when the EPA did their sampling, or from how they constructed their monitoring wells," said Doug Hock, a company spokesman.

 

The EPA said Wyoming was much more vulnerable than other areas to water contamination from fracking chemicals because drilling there often takes place much closer to the surface than in other states. Wyoming produced more than 10 percent of U.S. natural gas last year.

 

In Pennsylvania's Marcellus shale, which is also experiencing a natural gas drilling boom, fracking occurs much farther below water sources, which could make pollution from fluids harder to migrate into aquifers, it said.

 

An energy expert and Republicans in Congress said it was too early to conclude the report would prompt stricter federal regulation of the industry, currently carried out mostly by the states where drilling goes on.

 

The EPA's authority over fracking is limited by a 2005 energy law that mostly exempted the practice from federal oversight under the Safe Drinking Water Act.

 

In recent months, though, the EPA has moved ahead with regulations of shale gas production that involve waste water and air emissions. The EPA said the pollution in Wyoming, which it detected after drilling monitoring wells, included benzene, which can cause cancer. It also found alcohols and glycols.

 

Some residents near Pavillion have been receiving bottled water paid for by EnCana since August 2010 after they complained their water tasted and smelled odd.

 

States, not feds, lead regulation

In fracking, drillers blast large amounts of water, chemicals and sand deep underground to crack rocks that hold the fuel.

Industry groups have said that fracking has been used for decades without ever polluting water supplies, because the drilling occurs far below the water sources such as aquifers.

 

But in 1987, the EPA documented one case of well water pollution from fracking fluids at a site in West Virginia by chemicals used by Kaiser Exploration and Mining.

 

Big gas producers such as Chesapeake Energy Corp and Range Resources fear that additional regulations could add extra costs to drilling and limit access to shale reserves, which are estimated to hold enough fuel to one day allow the United States to export gas.

 

The industry has said companies have improved fracking techniques and that regulation by the states and not the federal government is sufficient.

 

Environmentalists have questioned both contentions.

 

Amy Mall, a fracking expert at the Natural Resources Defense Council, said the report "underscores the urgent need to get federal rules and safeguards on the books to help protect all Americans from the dangers of fracking."

 

Republican Inhofe: Report "premature"

Republicans in Congress have been urging the Obama administration to back off federal regulation of fracking because the industry is creating jobs and securing the country's energy future.

 

Senator Jim Inhofe, the ranking member on the Senate environment committee, who spoke with EPA Administrator Lisa Jackson on Thursday, said "EPA's conclusions are not based on sound science but rather on political science."

 

He called the findings "premature" since the report has not been subject to peer-review.

 

Kevin Book, an analyst at ClearView Energy Partners, agreed that the EPA's report was not yet conclusive.

 

"The EPA has made the circumstantial case that fracking led to the pollution, but they stopped short of stating that definitely," Book said.

 

A leading Democrat countered that. "EPA's findings make clear the concerns around drinking water contamination by natural gas production are not unfounded," said Edward Markey, the top Democrat on the House Natural Resources Committee.

 

The EPA said it issued the draft report precisely to seek peer review of the research. The agency opened it up to a 45-day public comment period and a 30-day peer review.

 

(Additional reporting by Edward McAllister in New York; Roberta Rampton, Ayesha Rascoe, in Washington; and Kristin Hays in Houston, editing by Bob Burgdorfer, Marguerita Choy, Russell Blinch and David Gregorio)

 

Copyright 2011  Reuters Environmental Online Report