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Encana says fracking study laced with mistakes

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Encana Corp. (ECA-T) took issue on Tuesday with a U.S. Environmental Protection Agency draft report that concluded drilling fluids used by Canada's biggest natural gas producer have contaminated water supplies near a Wyoming gas field.

The company attacked the methods and conclusions of the agency study, which found that fluids from underground hydraulic fracturing migrated up from fracking operations and contaminated drinking water supplies used by the residents of Pavillion, Wyoming.

"It is our belief that the EPA made critical mistakes and misjudgments at almost every step in the process," David Stewart, the environment, health and safety lead for Encana's Wyoming operations, said on a conference call. "From the way it designed the study to the way it drilled and completed its (test) wells, to the way it collected and interpreted the data, to its decision to release a preliminary draft report without independent third-party review."

The EPA report was the first recent official indication that the fracking methods that have unlocked enough gas from shale rock formations to sate U.S. demand for decades could contaminate drinking water, supporting the concerns of environmental groups looking to limit or halt the practice.

The oil and gas industry maintains fracking has been used for decades without ever polluting water supplies because the drilling occurs far below water sources such as aquifers.

The EPA said test wells around Pavillion detected benzene, which can cause cancer, along with alcohols and glycols and other chemicals.

But Encana contends that one well was drilled deep into a gas-bearing zone where the water would naturally contain compounds like benzene. The company said it also thinks that some of the chemicals found came from the cement the agency used to line the test wells, while some other chemicals identified were used little, or not at all, in fracking operations at the field. It also questioned the testing methods used by the agency.

The EPA however, defended its methods and said its wells were drilled using stringent standards to reduce the possibility of contaminating the results. It also said the chemicals it found were not naturally occurring.

"We believe that the best explanation for the chemical signature seen in the monitoring wells is the release of hydraulic fracturing fluids into the aquifer above the production zone," Betsaida Alcantara, a spokeswoman for the EPA, said in an email.

"Hydraulic fracturing fluids were injected directly into the deeper part of the aquifer. The synthetic substances found in the deep monitoring wells are known to be used in hydraulic fracturing fluids, are not naturally occurring, and many of them were used in the Pavillion field."

Its draft report, released last week, is now subject to a 45-day public comment period and a 30-day peer review.

Encana said the chemicals identified by the EPA were found only in the test wells and not in any drinking water supplies used by area residents. It is asking for the EPA study to be independently reviewed by a panel of outside experts with limited input from agency personnel.

"We have serious disagreements with the results in this report but plan on analyzing each and every one (of the agency's findings) further as we continue to work with our in-house experts and external experts on this issue," Stewart said.

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