http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/12/08/MNC91MA5PT.DTL

The U.S. Environmental Protection Agency announced Thursday for the first time that fracking - a controversial method of improving the productivity of oil and gas wells - may be to blame for causing groundwater pollution.

The draft finding could have significant implications while states try to determine how to regulate the process. Environmentalists characterized the report as a significant development though it met immediate criticism from the oil and gas industry and a U.S. senator.

The practice is called hydraulic fracturing and involves pumping pressurized water, sand and chemicals underground to open fissures and improve the flow of oil or gas to the surface.

The EPA found that compounds likely associated with fracking chemicals had been detected in the groundwater beneath Pavillion, a small community in central Wyoming where residents say their well water reeks of chemicals. Health officials advised them last year not to drink their water after the EPA found low levels hydrocarbons in their wells.

The EPA announcement could add to the controversy over fracking, which has played a large role in opening up many gas reserves, including the Marcellus Shale in the eastern United States in recent years.

The industry has long contended that fracking is safe, but environmentalists and some residents who live near drilling sites say it has poisoned groundwater.

The EPA said its announcement is the first step in a process of opening up its findings for review by the public and other scientists.

"EPA's highest priority remains ensuring that Pavillion residents have access to safe drinking water," said Jim Martin, EPA regional administrator in Denver. "We look forward to having these findings in the draft report informed by a transparent and public review process."

The EPA also emphasized that the findings are specific to the Pavillion area. The agency said the fracking that occurred in Pavillion differed from fracking methods used elsewhere in regions with different geological characteristics.

The fracking occurred below the level of the drinking water aquifer and close to water wells, the EPA said. Elsewhere, drilling is more remote and fracking occurs much deeper than the level of groundwater that would normally be used.

Environmentalists welcomed the news of the EPA report, calling it an important turning point in the fracking debate.

Encana of Canada owns the Pavillion gas field. An announced $45 million sale to Legacy Reserves fell through last month amid what Encana said were Legacy's concerns about the EPA investigation.

Encana spokesman Doug Hock said there was much to question about the draft study.

The compounds EPA said could be associated with fracking, he said, could have had other origins not related to gas development.

"Those could just have likely been brought about by contamination in their sampling process or construction of their well," Hock said.

This article appeared on page A - 16 of the San Francisco Chronicle

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