ABOUT HALLIBURTON

Congress is currently considering legislation to reform America's energy policy. But the legislation reads less like "reform" and more like a corporate welfare gift to oil and gas companies like Halliburton.

The most obvious gift in the energy bill is its ban on regulating a unique process for drilling oil and methane gas. The process, known as "hydraulic fracturing," injects hazardous chemicals into the ground in order to break-up (or "fracture") sand and rock formations. By breaking up sand and rock via hydraulic fracturing, energy companies can more easily extract oil and gas from the ground. The energy industry says the process dramatically increases the amount of oil and gas produced each year.

The problem is that the chemicals used during hydraulic fracturing are harmful to public health. Those chemicals include diesel fuel, hydrochloric acid and other harmful additives which can find their way into the public's drinking water supply. Over 50 percent of Americans receive their drinking water from ground water supplies.

As the leading proponent of the controversial process, Halliburton wants to ban the government from regulating it. The company has complained that government restrictions on the process "have a significant adverse effect" on its business.

The energy bill's proposed ban on regulating hydraulic fracturing is a response to a 1997 federal appeals court ruling in Alabama which concluded that the process must be regulated under the federal Safe Drinking Water Act. Alabama citizens had complained to the court in a 1995 lawsuit, known as the Legal Environmental Assistance Foundation (LEAF) vs. EPA, that hydraulic fracturing caused a filthy stench and contaminated their drinking water. But industry lawyers had argued that the type of chemicals used in hydraulic fracturing are not the type which the Act seeks to regulate. Nevertheless, the court determined that the process potentially could releases hazardous chemicals into the public's drinking water supply and is therefore subject to environmental regulation. The court was correct because the controversial process is indeed contaminating water supplies.

Hydraulic fracturing is popular in the extraction of methane gas. But, according to the EPA, most methane gas fields are located, at least in part, in aquifers that are used, or may be used, as sources for drinking water. Some of these hydraulic fracturing fluids contain substantial quantities of highly toxic chemicals that could easily find their way into these drinking water supplies. Those toxic chemicals include benzene, toluene, naphthalene, trimethylnapthalene, ethylbenzene and xylene.

According to the Houston Chronicle, Dick Cheney's energy task force "touted hydraulic fracturing as a way to deliver more clean-burning natural gas to the nation." The Chronicle cited energy analysts who said hydraulic fracturing represents about five percent of Halliburton's revenues. Halliburton is the leader among three oil and gas services companies which provide the hydraulic fracturing service.

Congressman Henry Waxman (D-CA) accused the Bush administration of manipulating scientific data on hydraulic fracturing in order to make the process appear safer than it is. The congressman said Dick Cheney's energy task force report "was altered to delete language critical of hydraulic fracturing." In addition, members of congressional staff who were skeptical of hydraulic fracturing had met with EPA officials who had confirmed that the process could release harmful chemicals into the groundwater supply. A week later, however, those same EPA officials provided a "new analysis, using changed numbers" that were favorable to Halliburton, according to Congressman Waxman. The new analysis showed that hydraulic fracturing would not release dangerous levels of harmful chemicals like benzene into the public's drinking water supply. The explanation for the sudden change in analysis from the EPA was that it was "based on feedback" from unidentified industry sources. The EPA later declared in an official study that the dangers posed by hydraulic fracturing "appear to be low and do not justify additional study."

Hydraulic fracturing was developed and patented in 1949 by Stanolind (later known as Pan American Oil Company). Halliburton is the industry leader in hydraulic fracturing and has held a non-exclusive license to use the patent since 1953. The process is so lucrative to the company that it celebrated the 50th anniversary of its invention.

The National Petroleum Council estimated that 60 percent to 80 percent of all wells drilled require hydraulic fracturing. Cheney's energy task force report called it "one of the fastest-growing sources of gas production" and noted that "each year nearly 25,000 oil and gas wells are hydraulically fractured."