(Reuters) – When her children started missing school because of persistent diarrhea and vomiting, Pat Farnelli began to wonder if she and her family were suffering from more than just a classroom bug.

After trying several remedies, she stopped using the water drawn from her well in this rural corner of northeastern Pennsylvania, the forefront of a drilling boom in what may be the biggest U.S. reserve of natural gas.

“I was getting excruciating stomach cramps after drinking the water,” Farnelli said in an interview at her farmhouse, cluttered as a home with eight children would be, while her husband, a night cook at a truck stop, slept on the couch.

“It felt like an appendicitis attack.”

The family, which is poor enough to qualify for government food stamps, began buying bottled water for drinking and cooking. Their illnesses finally ended, and Farnelli found something to blame: natural gas drilling in the township of 1,400 people.

Dimock, in a former coal mining region that was economically struggling even before the recession, is one of hundreds of sites in Pennsylvania where energy companies are now racing to tap the massive Marcellus Shale natural gas formation.

Some geologists believe Marcellus has the potential to meet total U.S. natural gas needs for a decade or more. But the gas is trapped deep within layers of rock, requiring a mix of highly toxic chemicals for drilling.

And, while companies pay royalties to landowners for drilling rights and for gas recovered from their properties, some residents have become alarmed about their water supply.

They say the drilling has clouded their drinking water, sickened people and animals and made their wells flammable.

In Dimock township, about 150 miles (90 km) north of Philadelphia, Cabot Oil & Gas (COG.N) has drilled about 30 wells since 2006, 20 of them just last year.

Industry spokesmen maintain the groundwater is protected by meticulous safeguards and that any chemicals used are heavily diluted and pose no health threat.

It is “impossible” that drilling has contaminated the groundwater, said Cabot spokesman Kenneth Komoroski.

Pennsylvania Gov. Ed Rendell told Reuters the state is careful in granting drilling permits. “We are very scrupulous about whether it will have an effect on the groundwater,” he said this week.

In addition, the Department of Environmental Protection tested well water in Dimock houses over the last month.

“We have not seen anything that would be of concern,” said agency official Mark Carmon.

But people who live there are convinced otherwise, according to nearly a dozen interviews conducted by Reuters.

Farnelli and her neighbors draw water from a well sunk into an aquifer; two gas wells are within a few hundred yards (metres) of her house.

According to Damascus Citizens for Sustainability, a Pennsylvania group that opposes drilling, there have been leaks of toxic chemicals into groundwater at hundreds of natural gas drilling sites in Colorado and New Mexico.

Ron and Jean Carter suspected there was a leak when the water supply to their trailer home started to taste and smell bad after Cabot started drilling 200 yards (meters) away.

Not wanting to risk the health of a new grandchild living with them, the 70-year-old retirees scraped together $6,500 for a water purification system.

“It was kind of funny that the water was good in July but after they drilled, it wasn’t,” said Ron Carter.

Tim and Debbie Maye, a truck driver and post office worker who have three teenage children, have been cooking and drinking only bottled water since their well water turned brown in November after Cabot started drilling.

But she can’t afford bottled water for her animals. Her cats have been losing fur and projectile vomiting because they they lick drips from the spigot that carries water from their well. Her three horses — one of which is losing its hair — drink as much as 50 gallons a day.

“I tell my husband, ‘I’m going out to poison the horses,'” she said.

The drilling in Dimock has released methane into the water supply, a fact acknowledged by Cabot and state regulators.

Some homeowners said they were able to ignite their well water. In one case, a gas buildup blew the cap off a well.

“The well was capped with six to eight inches of concrete,” said Norma Fiorentino, 66. “The explosion broke it into three big pieces and blew a huge hole in the ground.”

Environmental groups fear energy companies are contaminating water supplies by using a toxic mix of chemicals that are forced deep into the rock along with water and sand to release the natural gas. The process is called hydrofracturing, or “fracking” in industry jargon.

Komoroski, the Cabot spokesman, acknowledged that the “fracking” chemicals are dangerous in concentrated form.

But he said they are heavily diluted in the fluid. They are injected to depths of 5,000 to 8,000 feet (1,500 to 2,400 metres) — well below the 100 to 500 feet (30 to 150 metres) where aquifers occur — and are pumped into the ground inside several layers of steel and concrete, preventing any escape at levels where they could contaminate drinking water.

The technique is being repeated at hundreds of other sites in Pennsylvania and parts of surrounding states.

Companies won’t disclose exactly what chemicals they use, saying the information is proprietary, and residents complain they can’t run meaningful tests because they don’t know what to look for.

A statewide group of energy companies calling itself the Marcellus Shale Committee planned to publish a report on exactly what’s going into the ground and what’s coming out, Komoroski said.

The Endocrine Disruption Exchange, a Colorado research group, has identified 201 fracking chemicals and found almost 90 percent had the potential to harm skin, eyes, and sensory organs; 50 percent could damage the brain and nervous system, and 29 percent may cause cancer.

On a wooded hillside a few hundred yards (metres) from a gas well, retired schoolteacher Victoria Switzer and her husband, Jimmy, have spent five years building their dream home but now wonder if the drilling will ruin their rural idyll.

Victoria Switzer has led local complaints about the drilling. She fears she is no match for Cabot, which reported revenues of $945 million in 2008.

“They are big and we are small and they count on that,” she said.