US Energy Chief Doesn't Favor Ban on 'Fracking' for Gas

WASHINGTON (Dow Jones), Jan. 18, 2010

U.S. Energy Secretary Steven Chu said Friday he would not favor a ban on "fracking," a now-common drilling method that XTO Energy (XTO) and other natural-gas companies use to produce gas from hard shale-rock formations that have recently become a major source of natural gas.

Critics contend the practice can cause pollution, especially in drinking water. The industry rejects that charge.

"I think it [fracking] can be done responsibly, and the [Environmental Protection Agency] and other agencies will be looking to ensure it's done safely and responsibly," Chu said. "If [natural gas] can be extracted in an environmentally safe way, then why would you want to ban it?"

Legislation in the House and Senate would require the EPA to regulate fracking under the Safe Water Drinking Act of 1974. It would also require disclosure to the public of the chemicals used in fracking fluid that is injected into the ground to help companies access natural gas.

ExxonMobil's merger agreement with XTO contains language allowing Exxon to terminate the $31 billion deal if lawmakers make fracking illegal or "commercially impracticable."

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