It's been a hot week in the tug-of-war over how – or whether – the government will regulate hydraulic fracturing (or "fracking"), the drilling method used to extract oil and natural gas, with almost daily headlines coming out of the EPA, Wyoming and Congress.

First, the big news: last Thursday, the EPA finally announced it was launching a nation-wide study of fracking's health and environmental impacts, a move hailed by environmentalists as a necessary first step toward federal oversight. Then, two days ago, reports leaked out that the oil and gas industry had inserted language banning federal regulation of fracking into the climate and energy bill being negotiated by Senators Kerry, Graham and Lieberman. Call it the frack fight two-step: one step toward federal regulation, one step back.

Hydraulic fracturing is now used in about 90% of the US’s oil and gas wells, and drillers are depending on the technology to open up major new gas plays across the country. To frack a well, operators shoot a mix of water, sand, and chemicals into the wellbore to break down rock and release gas trapped within it (ProPublica has a nice fracking primer here).

For over a decade, the process has also been linked to cases of drinking water contamination. Fracking fluid usually includes petroleum distillates (substances like diesel) which contain carcinogens like benzene. Under the current regime, companies don't have to disclose what chemicals they use, what amounts, or how much remains down the well, and benzene and methane contamination have made wells and streams undrinkable near drilling sites in Garfield and Weld Counties, Colo., Sublette County, Wyo., Ohio, Alabama, and Pennsylvania.

In 2004, under the Bush administration, the EPA concluded that fracking posed "little or no threat" to drinking water supplies. The ruling drew some criticism – including from inside the EPA - but Congress went on to specifically exempt fracking from the Safe Drinking Water Act in the 2005 Energy Bill.

Last summer, Democrats led by Colorado's Diana DeGette introduced legislation to repeal that exemption, the so-called FRAC Act. But that bill has stalled, prompting Democrats to insert language into last October's appropriations bill asking the EPA to revisit its fracking study. Hence last week's announcement.

Activists hope a comprehensive study will push companies to change the makeup of fracking fluid. "Our position is that we need to get to nontoxic," said Gwen Lachelt, director of the Durango-based Oil and Gas Accountability Project.
Industry groups say they also welcome the study, if only to prove the process is already safe and well-monitored. Doug Hock, a spokesman for EnCana Oil and Gas, told the Glenwood Springs Post Independent, "We still believe that this is something that is well regulated at the state level. It doesn’t need another level of federal regulation."

But a report issued by the Environmental Working Group in January concluded that state regulation is spotty or, not to put too fine a point on it, nonexistent:

"State and federal regulatory agencies surveyed in the report are generally not tracking fluids used in fracturing and in some cases appear to misinterpret the federal Safe Drinking Water Act…Only one of the five state or federal agencies contacted...reported tracking the chemicals used in fracking operations."

This may be changing. This week, for instance, the Casper Star-Tribune reported that Wyoming is amending its rules governing fracking, and may require companies to disclose the chemicals they use.

Meanwhile, Rep. Henry Waxman (D-Calif), a longtime fracking critic, has been directing his own Congressional fracking investigation, first in the House Oversight and Government Reform Committee, and, as of last month, at the House Energy and Commerce Committee. This week, Greenwire reported that the committee had found that BJ Services Co., among the largest companies which practiced fracking, had violated a voluntary agreement with the EPA barring the injection of diesel fuel near drinking water aquifers.

Amidst this flurry of activity, Greenwire and the Houston Chronicle reported Wednesday that the climate and energy legislation being drafted in the Senate includes language written by the companies BP, ConocoPhillips and Shell Oil which would encourage (some) state oversight to head off any contemplated federal regulation. In addition to blocking any EPA regulations,

"The document recommends that states adopt standards for disclosing the contents of hydraulic fracturing chemicals "to health professionals or state agencies" in order to protect health or environmental safety but maintain "the confidentiality of trade secret information" in the fluids."

Just one more  turn in the fracking two-step.