WEATHERFORD, Texas -- When a suburban Fort Worth man reported that his family's drinking water had begun bubbling like champagne, the federal government sounded an alarm: A company may have tainted their wells while drilling for natural gas.
At first, the Environmental Protection Agency believed that the situation was so serious that it issued a rare emergency order in late 2010 that said at least two homeowners were in immediate danger from a well saturated with flammable methane. More than a year later, the agency rescinded its mandate and refused to explain why.
Now, a confidential report obtained by The Associated Press and interviews with company representatives show that the EPA had scientific evidence against the driller, Range Resources, but changed course after the firm threatened not to cooperate with a national study into a common form of drilling called hydraulic fracturing, or fracking. Regulators set aside an analysis that concluded that the drilling could have been to blame for the contamination.
For Steve Lipsky, the EPA decision seemed to ignore the dangers to his family. His water supply contains so much methane that the gas in water flowing from a pipe connected to the well can be ignited. "I just can't believe that an agency that knows the truth about something like that, or has evidence like this, wouldn't use it," said Mr. Lipsky, who fears that he will have to abandon his dream home in an upscale neighborhood of Weatherford.
The case isn't the first in which the EPA initially linked a fracking operation to water contamination and then softened its position after the industry protested. A similar dispute unfolded in west-central Wyoming in late 2011, when the EPA released an initial report that showed the drilling process could have contaminated groundwater. After industry and Republican leaders went on the attack, the agency said it had decided to do more testing. It has yet to announce a final conclusion.
Hydraulic fracturing -- "fracking" -- allows drillers to tap into oil and gas reserves once considered out of reach because they were locked in deep layers of rock. The method has contributed to a surge in natural gas drilling nationwide. But environmental activists and some scientists believe that it can contaminate groundwater. The industry insists that the practice is safe.
Range Resources, a leading independent player in the natural gas boom, has hundreds of gas wells throughout Texas, Pennsylvania and other mineral-rich areas of the United States. Among them is a production site -- now owned by Legend Natural Gas -- in a wooded area about a mile from Mr. Lipsky's home in Weatherford, about a half-hour drive west of Fort Worth.
State agencies usually regulate water and air pollution, so the EPA's involvement in the Texas matter was unusual from the start. The EPA began investigating complaints about the methane in December 2010, because it said the Texas Railroad Commission, which oversees oil and gas drilling, had not responded quickly enough to the reports of bubbling water.
Believing that the case was headed for a lengthy legal battle, the EPA asked independent scientist Geoffrey Thyne to analyze water samples from 32 water wells. In his report, Mr. Thyne concluded by chemical testing that the gas in the drinking water could have originated from Range Resources' nearby drilling.
Meanwhile, the EPA was seeking industry leaders to participate in a national study of fracking. Range Resources told EPA officials in Washington that so long as the agency continued to pursue a "scientifically baseless" action against it in Weatherford, the company would not take part in the study and would not allow government scientists onto its drilling sites, company attorney David Poole said.
In March 2012, the EPA retracted its emergency order and halted the court battle.
The EPA offered no public explanation for its change in thinking.
Rob Jackson, chairman of global environmental change at Duke University's Nicholas School of the Environment, reviewed Mr. Thyne's report and raw data upon which it was based. He agreed that the gas in the Lipsky well could have originated in a rock formation known as the Barnett Shale, the same area where Range Resources was extracting gas. Mr. Jackson said it was "premature" to withdraw the order, and that the EPA "dropped the ball in dropping their investigation."
Mr. Lipsky, still tied up in a legal battle with Range Resources, now pays about $1,000 a month to haul water to his home.
The confidential report relied on a type of testing known as isotopic analysis, which produces a unique chemical fingerprint that sometimes lets researchers trace the origin of gas or oil. Mr. Jackson acknowledged that more data are needed to determine for certain where the gas came from. But even if the gas came from elsewhere, Range Resources' drilling could have contributed to the problem in Mr. Lipsky's water because gas migrates, he said.
The company insists that the gas in Mr. Lipsky's water is from natural migration, not drilling. Range Resources' testing indicates that the gas came from a different rock formation, called Strawn Shale, not the deeper Barnett Shale, Mr. Poole said.