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The following commentary comes from an independent investor or market observer as part of TheStreet's guest contributor program, which is separate from the company's news coverage.



) -- Is fracking environmentally safe?

That's a key question surrounding the fast-growing method of gas and oil extraction -- and one that's triggered debate since the process became more economically viable.

It isn't hard to see where the concerns come from: The fracking process involves injection of fluids -- mostly sandy water, but some chemicals as well -- to bore holes in rock, releasing trapped gas and oil. The fluids are then pumped out of the well, treated and disposed (or possibly, reused). Few take issue with the injected water and sand. But the chemicals have long been a source of contentious debate.

The anti-fracking crowd argues these chemicals -- which many companies have historically not disclosed publicly -- can seep into the ground water, harming the environment and, occasionally, polluting drinking water. The documentary Gasland depicts this starkly -- showing murky and flammable water pouring out of taps into would-be drinkers' glasses. Now, Gasland isn't exactly a scientific review. And more scientific approaches to date haven't supported many of the movie's assertions.





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Industry experts point out frack wells are generally drilled thousands of feet below the water table, making the thesis chemicals leak into ground water unlikely to be broadly true. Not to mention myriad safety measures taken to prevent possible leakage -- like cementing and sealing well walls. But of course, none of that means issues aren't possible.

As a result, the

Environmental Protection Agency

has been studying the subject. Recently, it announced the results of a study of one Wyoming region that showed chemicals and natural gas existed at a depth only slightly below the water table -- and groundwater was shown to contain chemicals found at the bottom of gas wells. So that proves it, right?

Perhaps not. The industry has stated the EPA's tests were conducted on a relatively unique case. In this particular region of Wyoming, natural gas is known to exist at very shallow depths. What's more, the gas deposits are not trapped by top rock -- so there's a greater likelihood of naturally occurring gas being released into the water table, fracking or no. Perhaps partially as a result, studies dating back roughly 50 years show poor quality drinking water even then -- long before fracking was even fathomed. So to doubt these findings seems reasonable.


But in our view, the key takeaway isn't whether the EPA's right in this one study or not. It's how they conduct studies.

The EPA is currently undergoing a much wider review of fracking, with results expected in 2012. The hope is their test amounts to a balanced view of the issue -- not one relying on a miniscule data set in one area known for bad water. And perhaps they will! But many fear they won't -- and rash regulation (like a moratorium) could result.

In announcing their broader test, the EPA attempted to quell concerns over a potentially less-than-rigorous scientific study by stating their methodology was reviewed by the Scientific Advisory Board. Except the SAB is a wing of the EPA. A regulatory agency reviewing methodology used in its study to underpin rules it may write seems a bit like playing judge, jury and executioner. Thus, doubts remain.

For a better fracking review, an unbiased study conducted by a panel unconnected to the agency seems a decent option. Perhaps that panel is partly comprised of a rotating selection of environmental scientists. Perhaps partly industry experts. In this way, the study would be subject to near-immediate peer review and potentially dissenting opinions. Whatever the process, there should be multiple opinions, and all opinions should be transparent. The current process seems ripe for charges of bias. So change it. (The better rules and data likely resulting are no small side benefit.)

But industry has a role as well. Transparency counts, and releasing the chemical composition of fracking fluids (as many companies have recently done) could be a benefit, as opacity could make it appear as though there's something to hide. Additionally, to the extent the chemical composition could create problems, the industry can alleviate them through technological advances. For example, at energy conferences recently, several high-profile firm executives have taken to publicly imbibing fracking fluid to demonstrate safety.

While many aspects of the fracking debate seem murky today, one thing is crystal clear: There are always and will always be risks in energy production. But there is significant reward as well: Jobs, economic output and more. The reality is, the sooner we get a cooperative approach to reviewing fracking, the sooner the politically charged debate is resolved.

This commentary comes from an independent investor or market observer as part of TheStreet guest contributor program. The views expressed are those of the author and do not necessarily represent the views of TheStreet or its management.