Why Encana refutes U.S. EPA Pavillion groundwater report

12.12.2011  |  Business Wire

Encana Oil & Gas (USA) Inc., a subsidiary of Encana Corporation,
strongly disagrees with the U.S. Environmental Protection Agency′s (EPA)
preliminary conclusions in its draft report related to the groundwater
study in the Pavillion natural gas field of Wyoming. The EPA′s ?data from
existing domestic water wells aligns with all previous testing done by
Encana in the area and shows no impacts from oil and gas development. Of
most concern, many of the EPA′s findings from its recent deep monitoring
wells, including those related to any potential connection between
hydraulic fracturing and Pavillion groundwater quality, are conjecture,
not factual and only serve to trigger undue alarm.

Encana is especially disappointed that the EPA released its draft
report, outlining preliminary findings, before subjecting it to
qualified, third-party, scientific verification. This precipitous action
runs counter to the cooperative approach that Encana and other state,
federal and local participants in the Pavillion Working Group took in
working alongside the EPA in its investigation for more than three years.

'These preliminary conclusions do not stand up to the rigor of a
non-partisan, scientific-based review and that is of paramount
importance to every natural gas producing community, every citizen and
business that relies on natural gas and every industry worker,? said
Eric Marsh, Encana′s Executive Vice-President, Natural Gas Economy &
Senior Vice-President, USA Division. 'Safe and responsible natural gas
development is vital to North America′s energy security, and hydraulic
fracturing is an important, necessary and safe part of natural gas
development.?

Numerous discrepancies exist in the EPA′s approach, data and analysis. A
few of these discrepancies are:

• 
  The EPA report ignores well-known historical realities with respect to
  the Pavillion field′s unique geology and hydrology. (See BACKGROUNDER
  below)
  
• 
  The EPA drilled two deep monitoring wells (depth range: 783 ? 981
  feet) into a natural gas reservoir and found components of natural
  gas, which is an entirely expected result. The results in the EPA deep
  wells are radically different than those in the domestic water wells
  (typically less than 300 feet deep), thereby showing no connection.
  Natural gas developers didn't put the natural gas at the bottom of the
  EPA′s deep monitoring wells, nature did.
  
• 
  There is unacceptable inconsistency between EPA labs′ analysis for
  numerous organic compounds reported to have been found in the EPA deep
  monitoring wells. Data is not repeatable and the sample sets used to
  develop these preliminary opinions are inadequate.
  
• 
  Several of the man-made chemicals detected in the EPA deep wells have
  never been detected in any of the other wells sampled. They were,
  however, detected in many of the quality control (blank) samples ?
  which are ultra purified water samples commonly used in testing to
  ensure no contamination from field sampling procedures. These two
  observations suggest a more likely connection to what it found is due
  to the problems associated with EPA methodology in the drilling and
  sampling of these two wells.
  
• 
  The EPA′s reported results of all four phases of its domestic water
  well tests do not exceed federal or state drinking water quality
  standards for any constituent related to oil and gas development.
  

Conclusions drawn by the EPA are irresponsible given the limited number
of sampling events on the EPA deep wells and the number of anomalies
seen in the data. At the same time, the EPA repeatedly attempts to link
limited instances of localized shallow groundwater contamination from
historical production pit locations to its broader investigation. In
2005, Encana identified and self-reported these pit locations and
entered them into a voluntary remediation program administered by the
State of Wyoming.

Given the numerous flaws contained in this report, Encana believes
genuine, qualified third-party review is essential. Unfortunately,
Encana does not believe that the EPA has subjected any of its data to a
qualified, truly independent third party for peer review. We urge EPA
and other government officials to ensure that such an independent review
is made.

Encana employs a collaborative stakeholder engagement practice to
address stakeholder concerns, including hydraulic fracturing. Since some
of the residents of Pavillion first expressed concerns about potential
impacts from natural gas development on their drinking water, Encana has
taken their concerns very seriously.

'We have and continue to work extensively with Wyoming regulators and
independent laboratories to determine whether natural gas development is
affecting the community′s water quality. To date, all studies found no
connection. We care about the impacts of energy development on the
environment and we are committed to working to ensure our operations do
not impact groundwater,? Marsh said.

BACKGROUNDER

Pavillion, Water and Natural Gas

Pavillion is a farming and
ranching community located in Fremont County, Wyoming with a population
of about 175 ?residents. Drilling natural gas wells began in the
Pavillion area in 1960. Encana acquired the Pavillion asset through a
corporate acquisition of Tom Brown, Inc. in 2004. From 2004 to 2007
Encana drilled 44 wells. After drilling its last Pavillion well in 2007,
Encana has not invested in growing production from this mature field
where about 125 wells currently produce about 10 million cubic feet of
natural gas per day ? less than 0.3 percent of Encana′s daily production.

In 2005 a local resident complained of issues regarding the quality of
the drinking water in Pavillion. Encana conducted seven rounds of tests
between 2005 and 2007. The company sought the expertise of independent
laboratories and the Wyoming Department of Environmental Quality (WDEQ).

In 2008 a small group of Pavillion citizens and environmental activists
asked the U.S. Environmental Protection Agency (EPA) to conduct a
further investigation into water quality issues in the area. Encana
immediately began working closely with the EPA and in 2010 became part
of a voluntary working group with the WDEQ, the Wyoming Oil and Gas
Conservation Commission (WOGCC), Wyoming Geologic Survey (WGS), Wyoming
State Engineer′s Office (SEO) and the federal Bureau of Land Management.
The group consulted with the Wind River Environmental Quality Commission
and the Northern Arapaho and Eastern Shoshone Tribes. As part of its
ongoing commitment to the community, Encana contributed to the cost of
supplying local residents with drinking water while further study was
pursued. The EPA conducted three tests, releasing reports in August
2009, August 2010 and again in December 2011. Since the working group′s
inception, the group has asked the EPA to consider all potential sources
and reasons for the poor water quality in Pavillion, including
agriculture, septic systems, and bacterial activity in the drinking
water, but that has not occurred to date.

As far back as the 1880s, U.S. Geological Survey (USGS) reported about
poor water quality in Pavillion. More recent USGS reports dating back to
1959 have documented Pavillion water as unsatisfactory for domestic use
due to high concentrations of naturally occurring sulfate, total
dissolved solids and pH levels which commonly exceed state and federal
drinking water standards.

Pavillion is a shallow natural gas field. Naturally occurring methane
(natural gas) exists throughout the subsurface geology, filling channel
sands from millions of years ago. This natural gas is commonly known to
have been present in groundwater from domestic wells for decades, dating
back to well before any natural gas drilling started. Pavillion is
unusual in that commercial natural gas is present at depths as shallow
as 1,100 feet because there is no cap rock forming a barrier between the
deeper natural gas and shallow intervals. Therefore, over the geologic
ages, this has allowed the upward migration of deeper natural gas to
shallow depths. The natural accumulations of gas and water are in
discontinuous (unconnected) sand pockets. At the same time, this geology
does not allow water to move from one area to another because the
discontinuous sand pockets are not regionally connected. Therefore, this
area does not have a large continuous aquifer.

In 2005 Encana self-disclosed to the State of Wyoming that the company
wanted to evaluate some historical production pits that Encana inherited
as part of the Pavillion field acquisition. Under the direction of the
state, Encana is voluntarily remediating these pits, where testing has
found limited, isolated and well defined impact that has had no affect
on local drinking water.

Encana Corporation

Encana is a leading North American
natural gas producer that is focused on growing its strong portfolio of
resource plays producing natural gas and natural gas liquids in key
basins from northeast British Columbia to east Texas and Louisiana. By
partnering with employees, community organizations and other businesses,
Encana contributes to the strength and sustainability of the communities
where it operates. Encana common shares trade on the Toronto and New
York stock exchanges under the symbol ECA.

Further information on Encana Corporation is available on the company′s
website, www.encana.com, or by
contacting: