A federal environmental regulator will not finish and review a draft report tentatively linking hydraulic fracturing to Wyoming groundwater contamination and will instead allow state agencies to further investigate the issue.

Wyoming state agencies will lead a new round of investigation and file a report concerning Pavillion-area water quality by Sept. 30, 2014.

In a media release issued today, the state of Wyoming announced it will undertake a new effort to evaluate water quality from certain domestic water wells and the mechanical integrity of some oil and gas wells and pits near Pavillion.

The U.S. Environmental Protection Agency in December 2011 released a report tentatively linking hydraulic fracturing to Pavillion groundwater quality. The agency will not continue studying the matter.

"In light of this announcement, we believe that EPA’s focus going forward should be on using our resources to support Wyoming’s efforts, which will build on EPA’s monitoring results," EPA Acting Administrator Bob Perciasepe said in the release. "We applaud the leadership of Wyoming in conducting further investigation and assuring safe water and look forward to partnering with the state as it conducts its investigation."

Gov. Matt Mead lauded the state, EPA and Encana Oil and Gas, which owns the natural gas field near Pavillion, for reaching an agreement.

"It is in everyone’s best interest – particularly the citizens who live outside of Pavillion – that Wyoming and the EPA reach an unbiased, scientifically supportable conclusion," Mead said in a prepared statement. "I commend the EPA and Encana for working with me to chart a positive course for this investigation."

Encana will donate $1.5 million, both for the investigation and for further education concerning groundwater issues.

Concerns from citizens led the EPA to launch an investigation into the area's water quality in 2009. The agency drilled two monitoring wells in the area in 2010; in December 2011 the agency released a draft report which tentatively linked water contamination to hydraulic fracturing, an oil and gas production technique.

Industry and Wyoming officials alike took issue with the report, and calls for more investigation led the agency to extend its public comment period and allow the U.S. Geological Survey to retest the wells.

The survey released testing data in the fall without analysis. In October, the EPA announced it would take comments on the data until January, followed by a peer review panel.

But in January, the EPA again delayed its comment period until Sept. 30. The state intends to complete its report a year later.

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Reach energy reporter Adam Voge at 307-266-0561, or at adam.voge@trib.com. Read his blog at http://trib.com/news/opinion/blogs/boom or follow him on Twitter @vogeCST.