* 2011 EPA report linked fracking to drinking water pollution
* Critics said EPA improperly constructed wells for study
* Wyoming to take over fracking investigation
By Ayesha Rascoe
WASHINGTON, June 20 The Obama administration on Thursday dropped plans to further investigate preliminary federal findings that linked contamination of a Wyoming aquifer to natural gas drilling, following industry backlash that called the study into question.
The draft report released by the Environmental Protection Agency in late 2011 sent shockwaves through the oil and gas sector, by finding that hydraulic fracturing fluids used in shale gas drilling had likely contaminated groundwater in Pavillion, Wyoming.
Those findings contradicted industry arguments that hydraulic fracturing, or fracking, has never played a role in water contamination and bolstered environmentalists who say the drilling practice is a danger to public health.
Critics of the report, including Wyoming officials, raised concerns about whether EPA properly constructed the wells it used to draw its conclusions.
After numerous delays, the EPA said Thursday it would not finalize the report or seek a peer review of its findings, instead saying it would allow Wyoming to take over the investigation.
"We believe that EPA's focus going forward should be on using our resources to support Wyoming's efforts, which will build on EPA's monitoring results," EPA Acting Administrator Bob Perciasepe said in a statement.
Wyoming plans to release a final report on the Pavillion matter by Sept. 30, 2014.
The U.S. shale gas boom, spurred by innovations in hydraulic fracturing, has unlocked massive gas reserves, but it has sparked protests from green groups who complain that the rapidly expanding gas production pollutes air and water.
EPA's draft report raised industry fears that the administration could be moving toward seeking tighter federal regulations of fracking, which supporters say has been done safely for decades.
Fracking involves the injections of millions of gallons of water underground at high pressure along with chemicals and sand to extract fuel. Fracking is mostly exempt from federal regulation under the Safe Drinking Water Act.
Natural gas supporters were triumphant after the EPA's decision.
"The EPA has been on a witch hunt to shut down hydraulic fracturing, but yet again the evidence has determined it is safe," Senator David Vitter, the top Republican on the Senate Environment and Public Works committee, said in a statement.
Despite the criticism, EPA said it stands by its work and its data in the Pavillion case.
The agency is currently conducting a separate nationwide study examining the effects of fracking on drinking water. That draft report is due out in late 2014. (Editing by Eric Walsh)