A surprising development occurred Thursday when the Environmental Protection Agency (EPA) announced it was backing off its controversial groundwater study of hydraulic fracturing operations in Pavillion, Wyoming. Instead it is going to let state authorities handle an investigation into allegations of groundwater contamination.

Why was EPA’s study so controversial?

A draft report from EPA in 2011, based on deep monitoring wells the agency drilled in Pavillion, suggested that hydraulic fracturing was responsible for contamination of local water sources. This charge gained a lot of media attention and was picked up by activists opposed to hydraulic fracturing.

That claim was fiercely contested not just by the operator, Encana Oil and Gas, but by state authorities as well. EPA has faced significant criticism about its investigation including that the agency didn’t properly sample the wells or test them sufficiently to support their conclusions. Indeed, evidence suggests that shoddy construction of the monitoring wells EPA drilled, including perhaps the coating on the PVC piping EPA used, was responsible for some of the contamination the agency found.

Apparently the arguments of those criticizing the EPA’s methodology and results have merit. So it’s good news that the agency is backing off this ill-considered and poorly performed study.

Letting state authorities take the lead

The agency’s announcement that it will support the efforts of the Wyoming Oil and Gas Conservation Commission and the state’s Department of Environmental Quality is particularly welcome. Even though EPA officials probably wouldn’t admit it, its action would seem to confirm the oil and gas industry’s contention that state and local authorities are better equipped to handle the regulation and monitoring of hydraulic fracturing than the federal government.

It’s also worth pointing out that EPA still won’t release the underlying data that it used to make its initial claims about hydraulic fracturing fouling local water supplies. There’s no reason that a federal regulatory body like the Environmental Protection Agency, funded with U.S. taxpayers’ dollars, shouldn’t be as transparent in its dealings as possible, particularly with respect to its scientific studies.

EPA conducting sampling in Pavillion, WY, in 2010 (Source: EPA)

Hopefully this case of EPA engaging in bad science is an isolated one. The whole episode brings to mind a speech recently delivered by ExxonMobil Chairman and CEO Rex Tillerson that goes to the heart of this controversy. In it he talked about the responsibilities of all parties involved in the process of supplying our economy with the energy supplies needed to fuel Americans’ everyday lives – including government.

Rex said that oil and natural gas companies have a responsibility to uphold the highest standards of operational integrity.

He noted that government has special responsibilities as well, because of its unique position and powers.

“Only government holds the public trust to promote the rule of law,” Rex noted. He cautioned that policymakers “must also recognize the impact of their oversight. Their choices can carry costs to investment and innovations that are borne by the broader economy. Regulation must be governed by sound science and economic assessment of its costs and its benefits.”

That’s a lesson regulators of all stripes would be wise to consider.