By Bruce Nichols
HOUSTON (Reuters) - Texas Gov. Rick Perry on Friday signed energy legislation to encourage more natural gas production and require energy companies to disclose chemicals used in hydraulic fracturing, a drilling method that has raised environmental concerns.
With the signing, Texas becomes the first state to require energy companies to disclose chemicals used in the hydraulic fracturing process, where drillers blast pressurized water and chemicals deep underground to break rocks and release gas or oil from coal beds, shales and tight sands.
The technique known as "fracking" has revolutionized the domestic natural gas industry and led to a boom in drilling in Texas shale rock formations like the Barnett and Eagle Ford plays but has raised concerns about ground water contamination.
Natural gas drillers like ExxonMobil are seeking to avoid regulation of the practice under federal drinking water rules set by the Environmental Protection Agency and have said they prefer state-imposed rules instead.
Perry, the longest serving Texas governor, is a staunch conservative who is weighing a bid to become the Republican Party's candidate to challenge Barack Obama in 2012.
"These bills will help us stay on top by expanding our use of Texas sources of fuel, while addressing public concern about air and groundwater quality," Perry said at a signing ceremony in Denton, Texas.
Perry spoke at a Peterbilt Motors Company truck factory in North Texas in the Barnett shale region where hydraulic fracturing drilling techniques were pioneered by Houston oilman George Mitchell.
Two U.S. states with newly developing shale gas deposits -- New York and Pennsylvania -- have both imposed restrictions on hydraulic fracturing due to environmental concerns, although New York is considering allowing drilling to resume.
Perry is a strong advocate for traditional oil and gas drilling, and has also supported efforts that have made Texas the nation's biggest producer of electricity from windmills.
Perry signed two other energy-related items, giving incentives for heavy-duty natural gas-powered vehicles and requiring more air quality monitoring in the Barnett Shale.
The American Natural Gas Association, an industry group, applauded the legislation.
"We encourage leaders to consider Texas as a model of how natural gas can play a growing role in advancing clean, domestic energy choices," the group said in a statement.
(Reporting by Bruce Nichols, writing by Chris Baltimore; editing by Sofina Mirza-Reid)