'Terrified' New Yorkers protest gas drilling

BINGHAMTON, N.Y. (CNNMoney.com) -- Hundreds of people packed an upstate New York auditorium Monday, many of them fearful of new natural gas drilling that's spreading to states around the country.

The hearing, held in Binghamton and twice rescheduled due to security issues, is the public comment portion of an Environmental Protection Agency investigation into the safety of a controversial process that extracts natural gas from shale rock.

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Known as hydraulic fracturing, or fracking in the industry, it injects thousands of gallons of chemical-laced water and sand into natural gas wells, cracking the shale rock and allowing the gas to flow out.

The technology has helped usher in one of the biggest energy booms in U.S. history. The natural gas it is unlocking could cut greenhouse gas emissions, provide domestic energy, and make lots of people with a stake in the drilling very rich.

But it's also generated fear over pollution, both ground water contamination from the fracking and air and noise pollution from all the trucks required to complete the process.

"People are terrified," Martha Robertson, chair of the Tompkins County legislature, told the EPA panel. "We've been hearing a whole lot about this, and the question is who do you trust?"

Robertson said the issue has generated more calls and letters, from both sides of the political aisle, than any other in her nine years as a representative.

She herself is not a fan of fracking.

"I have a private well and if there is contamination, then my house is worth nothing," she said.

But others are hoping the industry grows.

Jackie Root, a dairy farmer and president of the Pennsylvania chapter of the National Association of Royalty Owners, said the $76,000 she received for leasing her land has been a big help.

"I believe hydraulic fracturing is safe," said Root. "Companies had good interactions with us. It's not always perfect, but our experience has been positive."

Things were relatively calm outside and inside the Broome County Forum Theater, where the meeting was held.

Those in favor of drilling and those opposed were demonstrating on opposite sides of a nearby street, which was closed off to traffic.

Each side wore t-shirts, hats and carried signs. There were a few animated debates upon entering the venue, yet nothing out of control or chaotic.

Filmmaker Josh Fox spoke at an antifracking rally alongside Binghamton Mayor Matt Ryan.

The New York hearing is the fourth and final one the EPA is conducting. A second day of hearings is set for Wednesday.

People in New York sit atop the Marcellus Shale, one of the largest natural gas deposits in the nation which extends beneath Pennsylvania, West Virginia and Ohio.

There is currently a ban on fracturing in New York until the EPA study is complete, but in neighboring states and other areas around the country it's happening at a breakneck pace.

Thanks to higher prices and new technology, vast reserves of natural gas are now available. Over half the states have shale gas reserves. Large deposits are also found close to major cities like Denver, Dallas, Chicago, Detroit, Philadelphia and New York City.

The size of this resource is massive, effectively doubling the nation's gas reserves, according to a recent study from Massachusetts Institute of Technology.

Investment money is pouring into the sector. Exxon Mobil (XOM, Fortune 500) recently paid over $40 billion for a shale gas company, a sign that the industry has hit the big time. Shale gas production, virtually nonexistent ten years ago, now accounts for about a fifth of the country's gas consumption, according to the MIT study. It's on track to provide over half the nation's gas by 2030.

"It's a game changer," said Melanie Kenderdine, executive director at MIT's program. "It's significant supply at relatively low cost. An enormous opportunity."

That's good news to people concerned about global warming or foreign oil dependence.

Most natural gas is burned to produce electricity or heat and cool buildings. When burned, it emits about half the carbon dioxide as coal, and most of the country's big environmental groups are cautiously supportive of increased development.

Natural gas can also be used to power modified vehicles. Although not yet popular for cars, the idea is catching on among operators of large fleets: city busses, delivery trucks and the like. If adopted more widely, cleaner burning cheaper gas, could put a big dent in the nation's oil imports.

But extracting shale gas comes with a dark side. Producing the gas involves drilling deep underground and injecting massive amounts of chemical-laced water and sand to free the gas from a seam of shale rock.

People living near the drilling are afraid the process will contaminate their drinking water, and there have been several cases where the water supplies have been ruined. They are also shocked at the pace of development this industry is undergoing. Trucks and drilling rigs operating round the clock, roads widened, pipes laid.

Fracking has been around for decades, but has never been done on such a massive scale and so close to major population centers.

The industry says the water contamination is the result of isolated accidents unrelated to fracking. They point out that thousands of wells are drilled each year, and there have only been a handful of problems.

They say the fracturing occurs thousands of feet below the water table, far from the drinking water. When the wells do pass through the water table, the industry goes to great lengths to protect the water by lining the wells with concrete and steel.

"We've drilled over a million wells in the last 60 years," said Daniel Whitten, a spokesman for the American Natural Gas Alliance. "We think the process is safe."

Up until now, the government has generally agreed with the industry and has left regulating the process largely up to the states.

But the 2005 energy act did not subject fracking to the Clean Water Act, which largely sidelined the agency.

Responding to public pressure, Obama has ordered EPA to study the issue again, although results from the investigation aren't expected until late 2012.

Many people that live near shale sites want the drilling stopped until the EPA study is complete.

Last week, the EPA asked companies to disclose what chemicals they are injecting into the ground. Many people want more, including greater EPA oversight, more enforcement personnel, and greater treatment of the fluids when they are returned to the surface.