(CBS) The natural gas-producing shale that lies under 34 states is now being seen as a game-changer in helping meet the nation’s energy needs for decades to come. But the process of extracting that natural gas, dubbed “fracking,” is fueling environmental fears. CBS News chief investigative correspondent Armen Keteyian has more:

“You can’t live like this – it’s so stressful every single day.”

Homeowner Stephanie Hallowich is like many in western Pennsylvania who have watched their once-pristine neighborhood become an industrial site. Sprawling plants with flares that reach high into the night, noxious smells, trucks, and containment ponds with unknown chemicals are among the complaints of people who live in areas where natural gas companies have descended.

Hallowich believes three natural gas-drilling operations bordering her property turned her well-water black, forcing her to purchase a tank of fresh water every month.

The air? Uncertain.

“I’m very afraid, health-wise, for the kids, just because of the exposure to the water and the constant not-knowing what we’re breathing in outside,” she said.

The Hallowich home sits near the center of the Marcellus Shale, an energy-rich geological formation stretching from New York to Tennessee.

Three-quarters of Pennsylvania contain vast energy riches buried deep underground in shale formations, representing hundreds of billions of dollars in untold wealth locked up in rock – a potential goldmine for natural gas companies.

“The development of shale gas in the Marcellus and across the country is a very important part of the nation’s energy strategy,” said Kathryn Klaber, president of the Marcellus Shale Coalition, a natural gas industry group

Big players are rushing in. Exxon has invested $30 billion in the Marcellus in recent months. Foreign investors are also swooping in. India’s largest company, Reliance, has purchased a large stake. China, Korea, and Britain are investing in gas drilling in the Marcellus shale.

As gas companies rush in to make deals with landowners for the right to drill, the money on the table – signing fees and royalties – is substantial, and hard to argue with in a recession . . . hundreds of thousands of dollars in some cases.

In Pennsylvania, 60 gas companies hold 4,504 permits to drill, almost half (1,195) granted this year alone.

What’s driving the drilling rush here, and across the country, are advances in hydraulic fracturing, or “hydro-fracking,” a process whereby millions of gallons of water, sand and chemicals are blasted deep underground – about 5,000 feet – forcing cracks in the shale and freeing natural gas for collection.

It is at the surface where problems have been reported, like blowouts and spills into ground water . . .

. . . And – as depicted in the HBO documentary “Gasland” – ignition at the kitchen sink.

“Gasland”: Is “Fracking” Polluting America?

At public meetings, environmental groups and pro-drilling landowners who receive royalties (“It’s my house, it’s my land, my property, I deserve to be able to frack if that’s what I want to do,” says one) have squared off over potential health risks and safety.

“There’s no such thing as zero-impact drilling,” says John Hanger, head of Pennsylvania’s Department of Environmental Protection. Since 2008 he’s doubled the number of state regulators (100 to 205) and inspectors (21 to 45) to oversee the gas industry.

Hanger told Keteyian that there is evidence of chemical contaminants in water. “Spills and surface leaks have, in fact, contaminated people’s drinking water,” he said.

Yet nationwide the industry is not required to disclose what potentially toxic chemicals – like hydrochloric acid – are used in the drilling process.

A provision of a law proposed by the Bush administration and passed by Congress in 2005 (dubbed by opponents the “Halliburton loophole“) stripped the EPA of its ability to regulate “fracking” – leaving the job of regulatory enforcement in the hands of cash-strapped, undermanned state agencies.

Since then, drilling companies have been allowed to put millions of gallons of unknown chemicals into the ground without reporting it, making it difficult to link pollution claims to drilling.

What environmentalists fear most is widespread contamination to the watershed, on which millions of people depend.

“I think the industry’s way out of bounds for not disclosing the list of chemicals,” Hanger said. “I think the industry is close to insane to allow that issue to become a source of suspicion.”

Much like the quality of air and water now surrounding thousands of home sites like Stephanie Hallowich’s.

Legislation is being proposed in the Senate, sponsored by Sen. Robert Casey, D-Pa., called the Fracturing Responsibility and Awareness of Chemicals (FRAC) Act.

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Marcellus Shale Geologist warns residents of unqualified water testers

STEVE MOCARSKY

A licensed geologist from Tunkhannock says people living near natural gas drilling operations should have their well water tested prior to drilling activities, but he warns that not everyone who offers testing services is qualified to take water samples.

Citing his bachelor’s degree in earth and space science, master’s degree in geology, professional geologist license, water system operator licenses, sewage enforcement officer certification and other credentials, George Turner says he’s come across some water testers who “don’t know anything about anything and they’re claiming they know how to test groundwater.”

The state Department of Environmental Protection and the Penn State Cooperative Extension recommend that people living near future drilling sites have “baseline water testing” done in the event a drilling company causes or allows their well water to be contaminated.

Baseline testing data gathered before drilling could prove that a well was not contaminated prior to drilling activities.

Turner admitted that holding a geologist license isn’t necessary for properly taking samples of well water, but he believes the minimum requirement should be a bachelor’s degree in some environmental field and a few years of experience sampling in the field.

Showing various bottles and vials he uses to collect water samples, Turner explained that some chemicals must be added to collection containers before well water is put into them.

For example, nitric acid in one container, he said, keeps metals from precipitating out from inside the container. Sulfuric acid is added to a glass container that will hold water to be tested for oil and grease.

“The preservatives prevent anything in the water from separating out before it gets analyzed. You can’t use glass containers for the metals because some metals can leach out of the glass. You can’t use plastic containers for the volatile organics because plastic has volatile organics in it that would leach out into the water,” Turner said.

Turner shared some stories of private water samplers he, his customers or his fiancée have come across.

One man said he had a degree from Harvard and used Penn State recommendations on what should be tested for.

But, Turner pointed out, when drilling into the Marcellus Shale took off in the region about a year and a half ago, Penn State’s list of things to be tested for did not contain methane gas.

“My God, that’s what these people are drilling for. That’s a no-brainer.”

Lead or sodium weren’t on the list, either.

“The Marcellus Shale that they’re drilling into is a marine-derived shale and, as such, is full of salt. And anything coming up out of it is going to be loaded with salt, or sodium. So the first three things you have to test for – and none of them is more important than the other – are methane gas, sodium chloride and barium sulfate,” Turner said.

Barium sulfate is added to drilling mud in large quantities to increase its density, he said.

“Penn State has since revised the list and it’s more along the lines of what I test for. Methane gas is on there now,

Turner said another water sampler told a group of people it wasn’t necessary to pay for a test for methane gas.

“He said all you have to do is light a match and if it doesn’t burn, that’s proof there’s no methane in your drinking water. Can you imagine going into court with that as proof there’s no methane in your drinking water?” Turner said.

Bryan Swistock, a Penn State water resources extension associate, acknowledged that early on in the process of developing testing recommendations, Penn State’s recommendations were “based on what we knew at the time” and did not include some things such as methane.

He pointed out, however, that methane was intentionally left off the list because tests for it were expensive, and there was and still is no standard sampling protocol for methane.

Swistock said it would be appropriate for a water sampler to have at least a bachelor’s degree. He also noted that Penn State has published a list of accredited testing laboratories as well as a sub-list of laboratories that also collect samples of well water that are all approved by the state Department of Environmental Protection.

He also said it’s in a laboratory’s best interest to ensure its water samplers are properly trained, “or they won’t look very good if a case goes to court.” But, he said, customers should not expect to have to pay an exorbitant fee for just for water sampling in addition to the cost of testing the water.

Turner also said a customer told him about someone sent by a natural gas company to collect well water samples. The sampler told the woman she was an environmental lawyer, yet she left vials of water samples from another residence in the back of her pickup truck while she conducted sampling inside the residence, Turner said.

That, Turner said, broke the chain of custody necessary for a strong case in court.