Congress May Close Huge Drilling Industry Loophole that Threatens Clean Drinking Water

Four years after Vice President Dick Cheney spearheaded a massive energy bill that exempted natural gas drilling from federal clean water laws, Congress is having second thoughts about the environmental dangers posed by the burgeoning industry.

With growing evidence that the drilling can damage water supplies, Democratic leaders in Congress are circulating legislation that would repeal the extraordinary exemption and for the first time require companies to disclose all chemicals used in the key drilling process, called hydraulic fracturing.

The proposed legislation has already stirred sharp debate.

The energy industry has launched a broad effort in Washington to fend off this proposed tightening of federal oversight, lobbying members of Congress and publishing studies that highlight what it says are the dangers of regulation. In mid-May, the industry released a detailed report asserting that the changes in current law would cost jobs and slash tax revenues. A key advocate of past efforts to regulate gas drilling, Rep. John Salazar (D-CO), has declined to support the legislation, expressing concern about how it would affect the energy companies.

However, with a strengthened Democratic majority in Congress and the party's capture of the White House in last year's election, the fracturing legislation is viewed as having its best chance at passage in years. Its House sponsor, Rep. Diana DeGette (D-CO), aims to attach a bill to a larger piece of legislation with broad support -- possibly a bill on climate change or a new energy policy measure – where it would be shielded from industry resistance. On the Senate side, according to congressional staff close to the effort, Sen. Bob Casey (D-PA) has a companion bill ready to follow.

The drilling process involves injecting millions of gallons of water and sand mixed with tens of thousands of gallons of chemicals -- some that are known to cause cancer -- deep into the ground, where as much as a third of those fluids typically remain after the gas is removed.

Global companies including Halliburton and Schlumberger have fought hard to shield from public view the chemical recipes they use to drill, saying that the formulas are valuable trade secrets. Scientists say that is precisely the information they need to determine if drilling caused the water pollution that has been reported in Colorado and elsewhere.

"The regulatory loophole for hydraulic fracturing puts public health at risk and isn't justified," said Henry Waxman (D-CA), chair of the House Energy and Commerce Committee that will offer the bill, in an e-mail. "The current exemption for the oil and gas industry means that we can't even get the information necessary to evaluate the health threats from these practices."

The industry argues that state laws and regulators are doing an adequate job of regulating the hydraulic fracturing process, and that more layers of regulation would be burdensome and expensive.

"We don't think the system is broke, so we question the value of trying to fix it with a federal solution," said Richard Ranger, a senior policy analyst at the American Petroleum Institute. "So proceed with caution if you are going to proceed with regulating this business because it could make a very significant difference in delivering a fuel that is fundamental to economic health."

Proponents of regulation, including DeGette, the author of the bill, say protecting water resources is worth the slightly higher gas costs that might come with regulation, but that the industry's assessment of those costs is dubious. The exemption, they say, has artificially lowered drilling costs because it means the companies don't always have to follow the safest practices.