OIL AND GAS:

Energy task force ignored EPA advice on hydraulic fracturing -- L.A. Times

The Bush administration's National Energy Policy Development Group -- the energy task force headed by Vice President Dick Cheney -- ignored the U.S. EPA's warnings to hold off on advocating the use of hydraulic fracturing as a method for recovering natural gas, according to a Los Angeles Times report.

Hydraulic fracturing, which involves injecting a mixture of water and other fluids into a well at high pressure to crack the rock, is used to increase the flow of oil and gas to production wells. The process allows energy companies to extract hydrocarbons that would not be accessible using conventional drilling techniques (Greenwire, July 15).

Correspondence between the vice president's office and the agency shows that EPA officials urged the administration to consider ongoing scientific study into whether the practice could contribute to groundwater contamination.

A May 2001, letter from EPA to Cheney aide Karen Knutson proposed adding the following language: "As a result of the ... lawsuit on hydraulic fracturing of coalbed methane wells, the EPA recognizes this issue raises concerns and is conducting an investigation to evaluate the potential risks to ... drinking water."

But the task force's final comprehensive report included no mention of the study nor any concerns about drinking water contamination, instead saying, "In certain formations, it has been demonstrated that the gas flow rate may be increased by as much as twenty-fold by hydraulic fracturing."

"From my perspective, the vice president's office was driving the issue of hydraulic fracturing," said Jeremy Symons, a former EPA employee who worked with the task force.

The final EPA report, released in June, said the practice of hydraulic fracturing did not threaten drinking water, but the conclusion has come under fire from agency whistleblower Weston Wilson, who said in an 18-page statement to the EPA inspector general that the study's findings may endanger public health and received approval from a review panel that included an employee of Halliburton Co., an oil services firm that pioneered the hydraulic fracturing technique (Hamburger/Miller, Oct. 14).

In response to the EPA report and accompanying complaints, five congressional lawmakers urged the agency's inspector general to evaluate the report.

"We must do all that we can to make sure this hydraulic fracturing activity is done safely," said the letter. "This is particularly important because water is a scarce resource, especially in this drought."

The letter's signatories are Reps. Diana DeGette (D-Colo.), Mark Udall (D-Colo.) and Henry Waxman (D-Calif.) and Sens. Jim Jeffords (I-Vt.) and Barbara Boxer (D-Calif.)

A spokesman for the inspector general's office said the letter had been received and is being reviewed (Hamburger/Miller, Los Angeles Times, Oct. 15).

United Nations board to review Halliburton Iraq contracts

Meanwhile, the Bush administration has agreed to a review of sole-source no-bid contracts awarded to Halliburton to repair Iraq's oil sector.

The International Advisory and Monitoring Board on the Development Fund for Iraq, which monitors how Iraqi oil revenues are spent, will look into the initial Restore Iraqi Oil contract, awarded before the invasion.

In 2003, the government awarded the Restore Iraqi Oil contract, known as RIO, to a unit of Halliburton, where Dick Cheney served as chief executive officer before becoming vice president. Democrats have complained that the U.S. Agency for International Development and the Army Corps of Engineers may have rigged the bidding process to favor companies with political ties to the Bush administration (David Ivanovich, Houston Chronicle, Oct. 15).

Cheney has said he was not involved in awarding the KBR contract. But an e-mail dated March 5, 2003, from Stephen Browning, a civilian regional director for the corps, said Cheney's office "coordinated" the contract. The internal Pentagon e-mail said Deputy Defense Secretary Paul Wolfowitz gave the "authority to execute RIO." The e-mail added, "We anticipate no issues since action has been coordinated w VP's office" (Greenwire, June 7). -- CD

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