By Edward McAllister
NEW YORK (Reuters) - Chesapeake Energy suspended the use of a controversial drilling method in Pennsylvania on Thursday as it worked to contain a natural gas well blowout that spilled drilling fluid into local waterways.
Chesapeake, the state's largest shale gas driller, planned to use a mix of plastic, ground up tires and heavy mud to plug the well, which has further raised concerns about the safety of the controversial "fracking" drilling process that blasts shale rock with a mix of water, sand and chemicals to release trapped natural gas.
The fluid from the well in Bradford County initially spilled into a nearby waterway but was now being contained, Chesapeake said in a statement early Thursday. The well spewed thousands of gallons of fracking fluid, county emergency management officials said on Wednesday.
"We have put all well completion operations on hold. Hydraulic fracturing is completely within that process," company spokesman Rory Sweeney said.
Well completion is the preparation for production of a well after drilling is complete and involves the controversial process of hydraulic fracturing, or fracking.
Chesapeake was listed as the largest shale gas driller in Pennsylvania, with 87 active wells in the second half of 2010. It was not immediately clear how many wells Chesapeake has at or near the completion stage.
Chesapeake stock fell 0.8 percent in early Thursday trade but shares have moved little since the blowout.
DRILLING TECHNIQUE UNDER SCRUTINY
The accident comes at a sensitive time for energy drillers, just one year after an explosion that led to the massive BP Gulf of Mexico oil spill, and as regulators mull whether to allow the technique in New York state.
In terms of its potential for environmental damage, the Chesapeake blowout appeared to be a minor compared with the massive blowout of BP's Macondo well a mile under the sea surface in the US Gulf of Mexico one year ago. But it could bring political blowback and debate about the safety of fracking.
Environmentalists and residents have complained that fracking can pollute water supplies, raising calls for increased regulation on its usage to produce natural gas.
Workers lost control of the hydraulic fracturing well in the state's Marcellus Shale natural gas play at 11:45 p.m. EDT on Tuesday, causing it to spew thousands of gallons of drilling fluid into the environment, local authorities said Wednesday.
The well appeared to be in stable condition Thursday morning, with little or no drilling fluid escaping, a spokeswoman for Pennsylvania State Department of Environmental Protection said. Chesapeake said the well was still leaking fluid on Thursday.
Tests from the nearby Towanda Creek indicated little contamination to local waterways, Chesapeake added.
Gas drilling in Pennsylvania, and in particular in the Marcellus Shale, has drawn the attention of major energy companies due to estimates that the region holds enough gas to meet total U.S. needs for a decade or more.
However, the blowout and spill were expected to add fuel to the debate about the safety of fracking in the U.S. Northeast, given concerns about the affect on the environment.
Experts mulled the possibility that the well could be abandoned after the top kill operation.
"If they are considering a top kill on the well it could mean that potentially abandoning this well could be in play, although that will have to be assessed later," said Jeremy Boak, a shale resource expert at the Colorado School of Mines.
"With a horizontally drilled fracking well, the costs of a well can range from $5 million to above $10 million per well."
It was unclear exactly what caused the blowout. The gushing fluid made it difficult to assess what went wrong, the state Department of Environmental Protection said on Wednesday.
Local residents were evacuated from the scene. All but one family had returned to their homes by Wednesday night, and Chesapeake said no one was hurt.
(Additional reporting by Joshua Schneyer, Janet McGurty; Editing by Matthew Robinson and Lisa Shumaker)