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Encana Slams EPA Over 'Not Factual' Pavillion, WY, Water Draft Report

After weathering the U.S. Environmental Protection Agency's draft report late last week, which claimed that the groundwater in Pavillion, WY, contains chemicals that are normally used in natural gas production practices, such as hydraulic fracturing (fracking), Encana Oil & Gas (USA) Inc., a subsidiary of Encana Corp., went on offense Monday, noting that many of the EPA's findings from its recent deep monitoring wells, including those related to any potential connection between fracking and Pavillion groundwater quality, "are conjecture, not factual, and only serve to trigger undue alarm."

Encana said it "strongly disagrees" with the EPA's preliminary conclusions in its draft report related to the groundwater study in the Pavillion natural gas field of Wyoming. The producer noted that the EPA's data from existing domestic water wells aligns with all previous testing done by Encana in the area and shows no impacts from oil and gas development.

Wyoming Gov. Matt Mead last week classified the draft study as "scientifically questionable," noting that more testing is needed (see Shale Daily, Dec. 9).

Encana said it was "especially disappointed" that the EPA released its draft report outlining preliminary findings before subjecting it to qualified third-party scientific verification. The company emphasized that this "precipitous action runs counter to the cooperative approach" that Encana and other state, federal and local participants in the Pavillion Working Group took in working alongside the EPA in its investigation for more than three years. Encana became part of the voluntary working group in 2010 with the Wyoming Department of Environmental Quality, Wyoming Oil and Gas Conservation Commission, Wyoming Geologic Survey, Wyoming State Engineer's Office and the federal Bureau of Land Management.

"These preliminary conclusions do not stand up to the rigor of a nonpartisan, scientific-based review and that is of paramount importance to every natural gas producing community, every citizen and business that relies on natural gas and every industry worker," said Eric Marsh, Encana's executive vice president, Natural Gas Economy, and senior vice president, USA Division. "Safe and responsible natural gas development is vital to North America's energy security, and hydraulic fracturing is an important, necessary and safe part of natural gas development."

At the request of Pavillion residents in 2008, the EPA began investigating water quality concerns in private drinking water wells. Since then the state of Wyoming, the community of Pavillion and the owner of the gas field, Encana Corp., have joined EPA to assess the water quality and identify potential sources of contamination. After meeting with the Wyoming Department of Environmental Quality, EPA began sampling drinking water wells in 2009; a second sampling took place last year (see Daily GPI, Sept. 3, 2010; Aug. 28, 2009).

For the purposes of the test, the EPA constructed two deep monitoring wells to sample water in the aquifer. The draft findings indicated that the groundwater in the aquifer contained compounds likely associated with fracking, the agency said. The EPA also retested private and public drinking water wells in the community and found the samples were consistent with chemicals identified in earlier EPA results released in 2010 and are generally below established health and safety standards.

An Encana spokesman contested the findings following the EPA's release last Thursday. "It's interesting, in their press release the EPA talks about compounds likely associated with gas production practices," Doug Hock, an Encana spokesman told NGI's Shale Daily. "They are hedging their bets. This is not a conclusion; this is a probability... and we don't think it is a very good one for a couple of reasons.

"First of all, the EPA tested domestic wells, and they found no indication of oil and gas impacts. The only substance that exceeded drinking water standards was a plasticizer, which is found in drinking water wells all over the world. Then they drilled two deep monitoring wells into a natural gas bearing zone and they found natural gas. That's not a surprise. Encana did not put those constituents there, nature did. So you've got drinking water wells not impacted by oil and gas and deep monitoring wells in a gas-bearing zone with oil and gas constituents -- not really much of a conclusion there."

In addressing the EPA's discovery of some synthetic chemicals -- glycols and alcohols -- in the deep monitoring wells, Hock said it is just as likely that those chemicals were introduced in the sampling process the EPA used.

On Monday Encana noted that numerous discrepancies exist in the EPA's approach, data and analysis. A few of these discrepancies are:

Encana said conclusions drawn by the EPA are irresponsible given the limited number of sampling events on the EPA deep wells and the number of anomalies seen in the data. At the same time, the EPA repeatedly attempts to link limited instances of localized shallow groundwater contamination from historical production pit locations to its broader investigation. In 2005 the producer identified and self-reported these pit locations and entered them into a voluntary remediation program administered by the State of Wyoming.

Encana believes genuine, qualified third-party review is essential, but the company does not believe that the EPA has subjected any of its data to a qualified, truly independent third party for peer review. "We urge EPA and other government officials to ensure that such an independent review is made," Encana said.

Last Thursday the EPA said it is releasing the draft report for a 45-day comment period and will submit the findings to an independent scientific review panel.

"We have and continue to work extensively with Wyoming regulators and independent laboratories to determine whether natural gas development is affecting the community's water quality," Marsh said. "To date, all studies found no connection. We care about the impacts of energy development on the environment and we are committed to working to ensure our operations do not impact groundwater."

In November the EPA's Region 8 office, which includes Wyoming, reported that the two monitoring wells specifically installed to test water supplies deep within an aquifer near gas drilling locations in Pavillion found high levels of benzene and other chemicals, including petroleum-related compounds (see Daily GPI, Nov. 14).

The sampling results were presented at a meeting attended by about half of Pavillion's 126 residents. According to EPA, a total of 42 private drinking water and four stock wells were sampled. Benzene, a carcinogen, measured as high as 50 times the EPA limit, the testing found. Elevated levels of diesel- and gasoline-grade organic compounds also were detected. High levels of methane were found in 10 of the sampled wells and elevated levels of 2-butoxyethanol phosphate were measured in nine wells.

Encana noted that the drilling of gas wells began in the Pavillion area in 1960. Encana acquired the Pavillion asset through a corporate acquisition of Tom Brown, Inc. in 2004. From 2004 to 2007 Encana drilled 44 wells. After drilling its last Pavillion well in 2007, Encana has not invested in growing production from this mature field where about 125 wells currently produce about 10 MMcf/d. Encana noted that as far back as the 1880s, the U.S. Geological Survey (USGS) reported about poor water quality in Pavillion. More recent USGS reports dating back to 1959 have documented Pavillion water as unsatisfactory for domestic use due to high concentrations of naturally occurring sulfate, total dissolved solids and pH levels which commonly exceed state and federal drinking water standards.

Pavillion is a shallow natural gas field, the producer said. Naturally occurring methane exists throughout the subsurface geology, filling channel sands from millions of years ago. This gas is commonly known to have been present in groundwater from domestic wells for decades, dating back to well before any natural gas drilling started. Pavillion is unusual in that commercial natural gas is present at depths as shallow as 1,100 feet because there is no cap rock forming a barrier between the deeper natural gas and shallow intervals.

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