Fracking debate heats up in New York

NEW YORK (CNNMoney.com) -- Hundreds of people are expected to pack an upstate New York auditorium Monday as the federal government enters the fray over a controversial technique for natural gas production.

The hearing is the public comment portion of an ongoing Environmental Protection Agency investigation into whether or not hydraulic fracturing, a process that injects thousands of gallons of chemical-laced water and sand into natural gas wells, cracking the shale rock and allowing the gas to flow out, is safe.

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'Fracking' sparks water worries

Residents in rural Pennsylvania fear expanded drilling for natural gas carries a sinister side.

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Fracturing - or 'fracking' - has helped usher in one of the biggest energy booms in U.S. history. It's also generated fear over ground water contamination and other hazards.

"It's a trap," said Martha Robertson, a resident of Dryden, N.Y., who is traveling to the hearing in Binghamton on Monday. "If it comes to New York it will transform our landscape, our economy, and our way of life. I'm deeply concerned about going in this direction."

The hearing will be the fourth the EPA has conducted across the nation as it attempts figure out if fracking, which is expanding on a rapid scale in shale gas fields across the country, is safe.

Monday's meeting, where opposition to fracking runs the highest, was originally set for last month but was changed at the last minute. Security had to be reassessed because thousands of people were expected to show up.

Now, about 2,000 are expected, said Binghamton Deputy Mayor Andrew Block, who said people only had a couple of weeks to plan for this meeting.

Nonetheless, the city will close off two roads around the auditorium on Monday, keep about a dozen police on hand, and set up designated areas for both pro and anti-drilling advocates to gather.

"People are expecting tension," said Robertson. "This is as tense issue."

A second day of hearings is set for Wednesday.

People in New York sit atop the Marcellus Shale, one of the largest natural gas deposits in the nation which extends beneath Pennsylvania, West Virginia and Ohio.

But shale gas development is happening nationwide.

Thanks to higher prices and new technology, vast reserves of natural gas are now available. Over half the states have shale gas reserves. Large deposits are also found close to major cities like Denver, Dallas, Chicago, Detroit, Philadelphia and New York City.

The size of this resource is massive, effectively doubling the nation's gas reserves, according to a recent study from Massachusetts Institute of Technology.

Investment money is pouring into the sector. Exxon Mobil (XOM, Fortune 500) recently paid over $40 billion for a shale gas company, a sign that the industry has hit the big time. Shale gas production, virtually nonexistent ten years ago, now accounts for about a fifth of the country's gas consumption, according to the MIT study. It's on track to provide over half the nation's gas by 2030.

"It's a game changer," said Melanie Kenderdine, executive director at MIT's program. "It's significant supply at relatively low cost. An enormous opportunity."

That's good news to people concerned about global warming or foreign oil dependence.

Most natural gas is burned to produce electricity or heat and cool buildings. When burned, it emits about half the carbon dioxide as coal, and most of the country's big environmental groups are cautiously supportive of increased development.

Natural gas can also be used to power modified vehicles. Although not yet popular for cars, the idea is catching on among operators of large fleets: city busses, delivery trucks adn the like. If adopted more widely, cleaner burning cheaper gas, could put a big dent in the nation's oil imports.

But extracting shale gas comes with a dark side. Producing the gas involves drilling deep underground and injecting massive amounts of chemical-laced water and sand to free the gas from a seam of shale rock.

People living near the drilling are afraid the process will contaminate their drinking water, and there have been several cases where the water supplies have been ruined. They are also shocked at the pace of development this industry is undergoing. Trucks and drilling rigs operating round the clock, roads widened, pipes laid.

Fracking has been around for decades, but has never been done on such a massive scale and so close to major population centers.

The industry says the water contamination is the result of isolated accidents unrelated to fracking. They point out that thousands of wells are drilled each year, and there have only been a handful of problems.

They say the fracturing occurs thousands of feet below the water table, far from the drinking water. When the wells do pass through the water table, the industry goes to great lengths to protect the water by lining the wells with concrete and steel.

"We've drilled over a million wells in the last 60 years," said Daniel Whitten, a spokesman for the American Natural Gas Alliance. "We think the process is safe."

Up until now, the government has generally agreed with the industry and has left regulating the process largely up to the states.

But the 2005 energy act did not subject fracking to the Clean Water Act, which largely sidelined the agency.

Responding to public pressure, Obama has ordered EPA to study the issue again, although results from the investigation aren't expected until late 2012.

Many people that live near shale sites want the drilling stopped until the EPA study is complete.

On Thursday, the EPA asked companies to disclose what chemicals they are injecting into the ground. Many people want more, including greater EPA oversight, more enforcement personnel, and greater treatment of the fluids when they are returned to the surface.