EPA begins study on shale gas drilling

WASHINGTON (Reuters) - The Environmental Protection Agency said on Thursday it will begin to take a closer look at the environmental and human health impact of shale gas drilling, which could mean new regulations on a booming area of the energy sector.

The drilling technique known as hydraulic fracturing, or "fracking", is not subject to the federal safe drinking water law. New regulations could discourage removing gas from shale rock formations, which account for 15 percent to 20 percent of U.S. natural gas production and provide a relatively clean energy source for the United States, which is trying to reduce its dependence on foreign oil.

The EPA study, which the agency said could take two years to complete, will put the spotlight on the possible dangers of hydraulic fracturing at a time when major oil companies such as Exxon Mobil, BP, Statoil and Total are pouring investment into the shale gas sector.

"Our research will be designed to answer questions about the potential impact of hydraulic fracturing on human health and the environment," Paul Anastas, assistant administrator for EPA's Office of Research and Development said in a statement. "The study will be conducted through a transparent, peer-reviewed process, with significant stakeholder input."

Separately, Interior Secretary Ken Salazar said Thursday his department is examining whether it should require shale gas producers using federal land to disclose the chemicals used in hydraulic fracturing.

"It is an issue that we are looking at," Salazar said at hearing before a House Appropriations subcommittee.

The EPA has allocated $1.9 million for its study, which the agency said is in the very early stages.

The House Energy and Commerce Committee is conducting its own investigation into the effects of fracking.

Legislation is also pending in the House that would require oil and gas companies to disclose the chemicals they use.

The EPA said in a separate notice published Thursday in the Federal Register that the agency's science advisory board would hold a two-day public meeting over April 7-8 to discuss how the EPA plans to study hydraulic fracturing.

The EPA said in its notice that the agency plans to gather existing data for its study on hydraulic fracturing, seek input from affected groups, catalog "potential risks" to drinking water supplies and identify data gaps.

Hydraulic fracturing injects a mixture of water, sand and chemicals into rock formations to stimulate oil and natural gas production.

Some environmental groups claim the technique is unsafe and want the government to regulate it.

Energy companies say improved fracking technology allows them to drill for oil and gas in an environmentally safe manner. They also say there is no evidence fracking has contaminated water supplies.

"We expect the study to confirm what 60 years of experience and investigation have already demonstrated: That hydraulic fracturing is a safe and well understood technology for producing oil and natural gas," said the American Petroleum Institute.

"We are confident that a scientific and data-driven examination will provide policymakers and the public with even greater reassurance of the safety of this practice," said America's Natural Gas Alliance, which represents 34 of the leading U.S. natural gas companies.

U.S. natural gas reserves are up by a third since 2006, thanks to unconventional gas development including shale gas, with estimated reserves sufficient to supply the U.S. market for nearly 100 years at current rates.

(Additional reporting by Ayesha Rascoe; Editing by Lisa Shumaker)