Oil and Gas

UPDATE 4-U.S. EPA begins study on shale gas drilling

 * Comes as oil majors invest in shale gas sector
 * Study to put spotlight on "fracking" impact on water
 * EPA's science board to hold public meeting April 7-8
(Adds Interior Dept comment)
 By Tom Doggett
 WASHINGTON, March 18 (Reuters) - The U.S. 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 XOM.N, BP BP.L, Statoil STL.OL and Total
TOTF.PA are pouring investment into the shale gas sector.
 Shale gas stirs energy hopes, health concerns [ID:nN18204577]
 Future of shale gas as energy source          [ID:nN18229665]
 "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. [ID:nN18198199]
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
 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
 "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