WASHINGTON - The Environmental Protection Agency's inspector general has decided to investigate a whistle-blower's complaint about the Bush administration's handling of hydraulic fracturing, an oil- and gas-drilling technique pioneered by Halliburton Co.

The case could have a major impact in Wyoming.

"If you took away our hydraulic fracturing, you'd wipe out our (state budget) surplus that we just had," said Don Likwartz, Wyoming Oil and Gas Conservation Commission supervisor.

Fracturing techniques are what unlocked the mammoth Jonah and Pinedale Anticline natural gas fields, according to Likwartz. In fact, of all its operations in the world, most of Halliburton's hydraulic fracturing occurs in Wyoming.

Upward of 2,000 wells could be drilled in the Pinedale region. Likwartz said each well can receive between 10 and 20 fracture treatments. Deep natural gas wells in the Wamsutter area require up to four fracture treatments.

The EPA inspector general's review was requested by Democratic lawmakers following a Los Angeles Times report in October that included the EPA employee's challenge of an agency study that found hydraulic fracturing posed "little or no threat" to drinking water.

The lawmakers applauded the decision by Inspector General Nikki L. Tinsley, the EPA's internal watchdog.

"Not only are there important environmental questions at stake, but the credibility of a federal agency is also at risk," said Rep. Mark Udall, D-Colo. "The Bush administration should be using sound science to determine whether or not hydraulic fracturing is polluting our water supplies. It shouldn't rig the process to give special treatment to special interests."

Hydraulic fracturing, a widely used drilling technique, allows access to hard-to-reach oil and gas deposits by pumping liquids underground at high pressure. The liquids sometimes include hazardous chemicals, some of which remain in the ground.

Halliburton is one of three U.S. companies that dominate the fracturing market. Vice President Dick Cheney headed the Houston-based company from 1995 until 2000. During that time, the company filed a legal brief opposing EPA regulation of the practice.

In Wyoming, it's up the Wyoming Oil and Gas Conservation Commission to make sure fracturing is done right and does not damage any drinking water wells. Likwartz said the agency requires oil and gas companies to cement and case wells at certain depths to protect different geologic zones and isolate the material used to fracture the gas zone.

Likwartz said the EPA case prompted the Interstate Oil and Gas Compact Commission to ask Wyoming and 29 other states to search their records to see if there any documented cases in which hydraulic fracturing had damaged a water well.

"None of us could find a single instance," Likwartz said. "And we checked it twice."

Halliburton and other energy companies say the technique has proved safe for decades. But a growing number of geologists and other experts say more study is needed as the practice proliferates.

A Halliburton spokeswoman declined comment on the decision to look into the complaint.

A 'timely' review

Tinsley's review comes at a politically sensitive time. A sweeping energy bill backed by the Bush administration includes a provision that would exempt hydraulic fracturing from federal regulation.

The Los Angeles Times had reported that some EPA employees complained about the agency's study of hydraulic fracturing in coal-bed methane fields completed in June.

One of them, Weston Wilson, an environmental engineer in the EPA's Denver office and a 30-year agency veteran, sent Tinsley an 18-page statement challenging the study's findings and methodology. He criticized the EPA for failing to conduct field research and for relying on a panel heavily tilted toward the energy industry to review the study.

Wilson called the review timely.

"Congress is considering a national energy bill, which would allow the oil and gas industry to keep its hydraulic fracturing practices secret," he said. "If this bill passes, American citizens will not know if toxic fracturing fluids are injected into their groundwater supply."

Tinsley has not determined the scope of the review, inspector general spokesman John Manibusan said this week. "There's a lot of issues that were raised. I can't say if we're going to review everything."

In response to Tinsley's decision, EPA spokeswoman Cynthia Bergman said: "We stand behind the report's conclusion that the potential threat to underground sources of drinking water posed by hydraulic fracturing of coal-bed methane wells is low and doesn't justify additional study. … None of the concerns raised by Mr. Wilson would lead us to a different conclusion."

Bergman has defended the panel that reviewed the agency's report as "a representative group." Six of the seven panel members were current or former energy industry employees.

An industry spokesman expressed support for the EPA's handling of the study, as well as its conclusion that hydraulic fracturing did not jeopardize drinking water.

"We were satisfied that EPA did follow the right process with the study," said Bill Whitsitt, president of the Domestic Petroleum Council, a trade association representing large independent natural gas exploration and production companies. "Hydraulic fracturing itself is regulated by states. It is not an environmental issue. And that's essentially what the study found."

Star-Tribune energy reporter Dustin Bleizeffer contributed to this report. Bleizeffer can be reached at (307) 682-3388 or dzeffer@trib.com.