(Reuters) – A top Pennsylvania Republican rejected a Democratic-sponsored plan for taxing natural gas production on Wednesday, vowing to stop a bill that he said would drive energy companies out of the state.

The opposition will force Governor Ed Rendell, a Democrat, to seek a compromise between Democratic and Republic plans. (more…)

In its 2009 annual report, Cabot Oil and Gas named a field in Texas and another in Dimock, Pa., as its two largest fields of production. But yesterday the Pennsylvania Department of Environmental Protection ordered Cabot to plug at least three of its gas wells in Dimock and pay hefty fines after contaminating local drinking water.

More than 15 months after natural gas drilling contaminated drinking water in Dimock, Pa., state officials are ordering the company responsible — Houston-based Cabot Oil and Gas — to permanently shut down some of its wells, pay nearly a quarter million dollars in fines, and permanently provide drinking water to 14 affected families.

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Responding to reports of environmental contamination in gas drilling areas across the country, the U.S. Environmental Protection Agency will conduct a nationwide scientific study to determine if the problems are caused by the practice of injecting chemicals and water underground to fracture the gas-bearing rock.

The study, announced Thursday but hinted at for months, will revisit research the agency published in 2004, which concluded that the process of hydraulic fracturing did not pose a threat to drinking water. The 2004 report has been widely criticized, in part because the agency didn’t conduct any water tests in reaching that conclusion.

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Two of the largest companies involved in natural gas drilling have acknowledged pumping hundreds of thousands of gallons of diesel-based fluids into the ground in the process of hydraulic fracturing, raising further concerns that existing state and federal regulations don’t adequately protect drinking water from drilling.

Rep. Henry A. Waxman, D-Calif., who released the information in a statement Thursday, announced that the House Committee on Energy and Commerce, which he chairs, is launching an investigation into potential environmental impacts from hydraulic fracturing.

The process, which forces highly pressurized water, sand and chemicals into rock to release the gas and oil locked inside, gives drillers unprecedented access to deeply buried gas deposits and vastly increases the country’s known energy reserves. But as ProPublica has detailed in more than 60 articles, the process comes with risks. The fluids used in hydraulic fracturing are laced with chemicals — some of which are known carcinogens. And because the process is exempt from most federal oversight, it is overseen by state agencies that are spread thin and have widely varying regulations. (more…)

In 2005 the U.S. Bureau of Land Management offered up thousands of acres of federal land in Colorado to drilling. Because the land was in the heart of an area that supplies drinking water to 55,000 people in the western part of the state, the plan drew strong opposition from local communities.

The concerns they raised — that the disruption and chemicals used in drilling might ruin their water — foreshadowed similar concerns that have since rippled across the country as drilling operations expand from Wyoming to New York. And their solution may be a lesson that ripples to those communities as well.

The communities — the city of Grand Junction and the neighboring town of Palisades — began by making their concerns clear: drilling is important, but protecting the water supply is paramount.

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