US lawmakers move to crackdown on drilling practice

By Ayesha Rascoe

WASHINGTON, June 9 (Reuters) - U.S. lawmakers on Tuesday introduced legislation to crack down on a controversial drilling practice used to enhance extraction of oil and gas from the ground.

Democratic Representatives Diana DeGette, Maurice Hinchey and Jared Polis offered a bill that would reverse a Bush era measure in 2005 that excluded hydraulic fracturing from regulation under the Safe Drinking Water Act.

In the Senate, Democrat Bob Casey introduced similar legislation.

Hydraulic fracturing, or "fracking," involves injecting water, sand and chemicals into rock formations at high pressure to make oil and natural gas flow more freely. The method has been used for decades to stimulate production in old wells, but is now also used to tap oil and gas trapped in shale beds.

Fracking has come under fire in recent years as residents in gas drilling areas have complained their well water was discolored or foul-smelling and that children became sick.

"Families, communities, and local governments are upset that the safety of their water has been compromised by a special interest exemption, and we join them in that frustration," said Polis of Colorado.

Hydraulic fracturing is essential shale natural production, which has significantly boosted U.S. gas output. Industry groups worry the measure would burden drillers with cumbersome federal standard and higher costs.

"More than one million wells have been completed using this technology. Unnecessary regulation of this practice would only hurt the nation's energy security and threaten our economy," said American Petroleum Institute President Jack Gerard in a statement.

API highlighted a study by IHS Global Insight that found that additional federal regulations would lower the number of U.S. wells drilled by 20.5 percent over a five-year period, while cutting natural gas production by about 10 percent from 2008 levels by 2014.

In addition to opening the door to Environmental Protection Agency supervision of the practice, the bills would also require companies such as Halliburton Co (HAL.N) and Schlumberger Ltd (SLB.N) to reveal what chemicals they use to produce hydraulic fracturing fluid.

Critics of fracking have accused then Vice President Dick Cheney, a former Halliburton executive, of playing a role in pushing the 2005 exemption.

"It's time to fix an unfortunate chapter in the Bush administration's energy policy and close the 'Halliburton loophole' that has enabled energy companies to pump enormous amounts of toxins, such as benzene and toluene, into the ground that then jeopardize the quality of our drinking water," Hinchey of New York said.

Major U.S. shale producers include Range Resources Corp (RRC.N), Chesapeake Energy Corp (CHK.N), and Anadarko Petroleum Corp (APC.N). (Reporting by Ayesha Rascoe; Editing by Marguerita Choy)