Image: Natural gas drilling
Ralph Wilson  /  AP
Workers at a Chesapeake Energy natural gas well site near Burlington, Pa., on April 23. The Environmental Protection Agency is taking a fresh look at a controversial drilling technique used to recover natural gas from deep rock reserves.
msnbc.com staff and news service reports
updated 11/11/2010 4:25:27 PM ET 2010-11-11T21:25:27

To supporters, it's a 21st century economic boom that will benefit millions across the Northeast. To critics, it could be this century's biggest national eco-disaster, tainting water supplies for tens of millions.

The it is "fracking" for natural gas buried between the rocks of the Marcellus Shale, a formation that extends from West Virginia and eastern Ohio through Pennsylvania and into southern New York.

Some geologists estimate it could yield enough natural gas to supply the entire East Coast for 50 years.

Fracking, shorthand for hydraulic fracturing, injects millions of gallons of water, sand and toxic chemicals into each well to break apart the shale and release trapped gas.

A drilling boom has been under way since 2008 in the formation, the biggest known deposit of natural gas in the nation.

Controversy over the technique has been building, with momentum shifting towards supporters after the midterm elections earlier this month.

The GOP takeover of the U.S. House will almost surely doom efforts in Congress to impose federal regulation over gas drilling. Congress exempted fracking from federal clean water regulations in 2005.

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In Pennsylvania, Republican Gov.-elect Tom Corbett is seen as a lot friendlier toward the gas industry than outgoing Democrat Ed Rendell, who has clashed with companies over both taxes and tougher new clean-water regulations.

Corbett opposes any attempt to slap a gas-extraction tax on the industry. Pennsylvania is the largest gas-drilling state without such a tax, and Rendell tried and failed to persuade the Legislature to approve one.

Corbett has also said he will lift Rendell's executive order preventing the issuing of any more drilling leases in state forests.

The huge commercial potential was underscored earlier this week when oil giant Chevron struck a $4.3 billion deal to buy Atlas Energy, a major Marcellus Shale driller.

Combining a new process of horizontal drilling with fracking, drillers are unlocking vast deposits there and in other formations around the U.S. such as the Barnett Shale in Texas — a boom that could ensure cheap and plentiful natural gas for many years to come for homeowners, factories and power plants.

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The drilling frenzy in the Marcellus Shale is also credited with enriching landowners and pumping new life into trucking companies, short-line railroads, quarries and steel-pipe makers, as well as the restaurants and hotels hosting out-of-state drilling crews.

An industry-financed study by Penn State projected that the boom would generate tens of thousands of jobs and hundreds of millions of dollars in state and local taxes in the coming years.

A 2009 report prepared for the Energy Department said sand and chemicals typically account for less than 2 percent of fracturing fluids, with water making up 98 to 99.5 percent.

However, the use of fracking is raising pollution concerns across the Northeast.

Image: Anti-drilling march in Pittsburgh
Keith Srakocic  /  AP
Protestors against Marcellus Shale drilling march through downtown Pittsburgh, Pa., on Nov. 3.

While the industry maintains that fracking has been proved safe over the decades, homeowners are coming forward with tales of wells producing brown, foul-smelling water or water polluted with methane and chemicals.

In the northeastern Pennsylvania town of Dimock, a hotspot of Marcellus Shale exploration, some residents no longer use their polluted well water and can light their taps on fire because of methane they say seeped into their wells because of drilling.

The Rendell administration intends to bill Houston-based Cabot Oil & Gas Corp. the $12 million cost of installing a water line to serve 14 families in Dimock. Cabot denies the methane is connected to its drilling.

The gas drilling business got what it wanted in the election of Corbett, who received nearly $1 million in donations from the industry. Among his first actions this week was to name Christine Toretti, a national GOP committeewoman and owner of a Pennsylvania drilling company, as co-chair of his transition team.

Without giving specifics, Corbett on Wednesday promised a "reasonable" regulatory stand that protects the environment. He will be able to appoint a new head of the Department of Environmental Protection, which under Rendell has tried to aggressively deal with the problems brought by the gas rush.

"I look at this as an industry that's going to be here long after all of us in the room are gone," Corbett said. "It is going to be a great industry and we need to develop it properly. We need to develop it protecting the environment and growing jobs in Pennsylvania."

In the U.S. Congress, Sen. Bob Casey, D-Pa., sponsor of a measure that would subject fracking to regulation by the Environmental Protection Agency, predicts a bleaker landscape now for his bill.

"If anything, there are more votes against it," he said Tuesday.

Whether events ultimately unfold to the industry's liking remains to be seen.

The election doesn't affect a web of federal, state and even municipal regulatory bodies that could stand in the way of drilling, industry analysts said.

The Pittsburgh City Council, for example, this week voted 8-0 to ban natural gas drilling within the city limits.

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And the EPA could try to regulate fracking without congressional approval.

The federal agency is already studying whether the chemicals from fracking can get into drinking water supplies and asked drillers to provide lists of the chemicals they used. Eight of nine complied, the EPA said this week, the exception being oil services giant Halliburton.

The company also has faced renewed criticism over the provision in the 2005 energy law that prevents the EPA from regulating fracking. The exemption is commonly called the "Halliburton loophole," in reference to the company's pioneering role in fracking.

An energy task force convened by then Vice President Dick Cheney, a former Halliburton CEO, had urged the EPA exemption.

Initial results from the EPA study are expected in 2012.

The Associated Press contributed to this report.

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