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Halliburton's Interests Assisted by White House

A CHANGING LANDSCAPE

The administration has lent support to a lucrative drilling technique. Some in the EPA consider it an environmental concern.

October 14, 2004|Tom Hamburger and Alan C. Miller | Times Staff Writers

"This study was hijacked," Wilson said in an interview. The EPA's multiple failures "may result in danger to public health and safety," he said.

Wilson's statement said the study found that fracturing fluids often contained hazardous chemicals. But because their patented formulas are proprietary, all the potential compounds are not publicly identified, he said.

"EPA cannot objectively nor scientifically defend its claim that this practice does not risk endangering sources of underground drinking water," Wilson said in an interview. Agency officials said the chemicals were diluted and dispersed enough to minimize the risk. And they said their analysis of incident reports found no firm proof that fracturing had directly caused drinking water contamination.

"Unless we actually see threats to drinking water supplies, the Safe Drinking Water Act admonishes EPA not to regulate injection for oil and gas production unnecessarily," said EPA spokeswoman Bergman.

The report did find that diesel fuel in fracturing fluid posed a risk to drinking water. But EPA officials said no regulatory action was necessary, because the three major fracturing companies voluntarily agreed to stop using the fuel in coal bed methane operations. Wilson's statement says the arrangement is inadequate, because the EPA has no way of enforcing it and any of the parties can drop out at will.

The EPA report was reviewed by a seven-person panel: a senior technical advisor at Halliburton, a manager from an industry-funded research institute who previously worked for Halliburton, a senior engineer with BP Amoco and two academics who had worked for the energy industry. A sixth member, a state regulator with an engineering background, also had worked for Amoco. The final member was an expert on hydraulic fracturing from Sandia National Laboratories in New Mexico.

"EPA selected panel members who we believed would be unbiased and fair in reviewing this study, and selected a representative group," the EPA's Bergman said.

One reviewer, Peter E. Clark, a professor at the University of Alabama who specializes in hydraulic fracturing fluids and previously worked for the industry, said the panel was fair. "Nobody tried to grind any axes."

He said the original draft of the report reviewed by the panel overstated the risks of fracturing and needed to be toned down. He said he requested changes and that, in the end, "EPA made the right decision."

The EPA's Bergman said the final report incorporated only changes suggested by the panel "to make the study as scientifically accurate as possible."

In addition to the peer review panel, the agency sought broad input through public meetings and notices and consultation within the EPA, including the Denver regional office, officials said.

Cynthia C. Dougherty, director of the agency's groundwater and drinking water office, said there was no political influence on the selection of the peer review panel or preparation of the report. Halliburton's Hall said the company did not recommend its employee for the panel and "had no expectation of specific benefit" from his participation.

The EPA report was a victory for Halliburton. Although only 1% of the company's fracturing business is in coal bed methane fields, it is one of the fastest-growing sources of gas production in the U.S. The study is seen as a boost to industry's efforts to win a blanket exemption for fracturing.

Rep. Henry A. Waxman (D-Los Angeles), a member of the House Energy and Commerce Committee who has followed the fracturing study's progress, said the EPA review "made a faith-based leap to conclude that injecting toxic materials" underground posed little or no threat, he said. "The unanswered questions in EPA's report cry out for further study."

Geoffrey D. Thyne, a professor at the Colorado School of Mines who has done consulting work for energy companies and local governments, said fracturing is generally safe but needs to be monitored, particularly in areas where oil and gas deposits are close to water supplies. Exempting fracturing from EPA regulation "is premature, unwise and goes against the public interest," he said.

*

Times staff researchers Robin Cochran in Washington and Janet Lundblad in Los Angeles contributed to this report.

(BEGIN TEXT OF INFOBOX)

The fight over a drilling technique

*

When Dick Cheney led Halliburton Co. in the late 1990s, the firm opposed Environmental Protection Agency regulation of hydraulic fracturing, a technique that pumps pressurized fluid into the ground to boost oil and gas production. Halliburton and two other companies dominate worldwide use of the method. The administration of President Bush and Vice President Cheney has taken steps to keep the practice of hydraulic fracturing from being regulated by the EPA under federal drinking water

laws.

1995: Dick Cheney becomes chief executive of Halliburton Co., a leader in fracturing.

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