Election May Bring Hard Look at Oil-Gas Exemption
Change in Washington may bring new scrutiny for oil, gas exemption from safe-water law

CNN Money
28 November 2008

NEW YORK (Associated Press) - Energy companies can coax valuable oil and gas out of the ground by injecting a mix of water, sand and chemicals into rock formations _ a process they say has never been shown to contaminate ground water.

Others aren't convinced the technique is safe, and they hope new political leadership in Washington will lead to closer regulation of the practice.

The technique is called hydraulic fracturing, or "fracking," and Congress has exempted it from the federal Safe Drinking Water Act.

A new bill would repeal that exemption, and its chances of passing increased with the election of Barack Obama as president and Democrats' choice of Rep. Henry Waxman as chairman of the House Energy and Commerce Committee.

Waxman, a California Democrat and an outspoken critic of hydraulic fracturing, toppled Michigan Rep. John Dingell from the post.

"I think selection of Rep. Waxman is really going to herald a new and aggressive policy toward energy regulation," said Rep. Diana DeGette, D-Colo., a sponsor of the bill to end the exemption from the drinking water law.

Hydraulic fracturing cracks open rock or sand formations to free up oil, gas and methane for easier extraction. But environmentalists and landowners across the country have sounded alarms about potential groundwater contamination and health risks.

The use of fracking has grown as production in older, more accessible oil and gas fields declines and new technology makes tougher geology easier to tap.

Nearly 70 percent of the nation's natural gas comes from so-called unconventional fields _ shale, nonporous rocks and sand _ said Marc Smith, executive director of the Denver-based Independent Petroleum Association of Mountain States.

Hydraulic fracturing and new drilling technology have enabled energy companies to extract gas from areas where it would have been economically and technically unfeasible a decade ago, Smith said.

"It's a game-changer because it totally redefines what is possible," Smith said of hydraulic fracturing. "It is a vital part of producing natural gas."

Regulating the practice is "an answer in search of a problem," said Doug Hock, spokesman for EnCana Oil and Gas (USA), one of the largest gas producers in the Rockies.

"There's never been a documented case of fracking fluid contaminating water," Hock said.

Regulation would increase costs for companies already facing dropping gas prices, tight credit and, in Colorado, an overhaul of state oil and gas rules, Hock added.

A 2004 report by the U.S. Environmental Protection Agency said there was no evidence that fracking threatens drinking water. Wes Wilson, a veteran engineer in the Denver EPA office, disputed those findings.

Wilson went public in 2004 with criticism that the study was incomplete and its methodology inconsistent with other EPA studies.

DeGette offered legislation in 2005 that would have required the National Academy of Sciences to review the report, but the House Energy and Commerce Committee rejected the idea.

That same year, Congress exempted fracking from the drinking water law.

"Congress was controlled by Republicans and the White House was controlled by a former oil man," DeGette said.

President George W. Bush was in the oil business in Texas. Vice President Dick Cheney once ran Halliburton, an oil services company that pioneered hydraulic fracturing.

Democratic Reps. John Salazar of Colorado and Maurice Hinchey of New York are other sponsors of the fracking regulation bill.

Growing interest in mining the Marcellus shale, a gas formation under the Appalachians, has prompted New York state officials to update oil and gas regulations to address hydraulic fracturing and new drilling techniques.

Industry officials say the practice is safe and that companies take precautions to protect water wells and groundwater. In the Rockies, they say, oil and gas wells are drilled several thousand feet deep, far lower than drinking water wells.

Industry critics counter that companies won't disclose what's in their fracking recipes. Companies insist it's proprietary information.

Theo Colborn, who has a doctorate in zoology and is considered an expert on the effects of chemicals on the human endocrine system, runs a nonprofit group in Paonia in western Colorado that is trying to determine what's being pumped into the ground. She and her staff are collecting information from data sheets required for hazardous materials and analyzing water in oil and gas waste pits.

An analysis of Colborn's work released by the Environmental Working Group in June found that at least 65 chemicals that turned up in her investigations are listed as hazardous under federal law.

"The industry says this practice is safe, that it's not endangering drinking water, so why are they afraid of a law that says they can't endanger drinking water?" said Amy Mall of the Natural Resources Defense Council in Boulder.