Drilling companies injected more than 32 million gallons of fluids containing diesel into the ground during hydraulic fracturing operations from 2005 to 2009, according to federal lawmakers, but the industry says the practice was legal.

In a letter sent Monday to Environmental Protection Agency Administrator Lisa Jackson, Democratic Reps. Henry Waxman of California, Edward Markey of Massachusetts and Diana DeGette of Colorado said the diesel injections in 19 states may have violated the Safe Drinking Water Act because the companies did not seek permits for the activities.

“We learned that no oil and gas service companies have sought — and no state and federal regulators have issued – permits for diesel fuel use in hydraulic fracturing,” wrote the representatives, the ranking Democratic members of three House panels with oversight on energy and environmental matters.

“This appears to be a violation of the Safe Drinking Water Act. It also means that the companies injecting diesel fuel have not performed environmental reviews required by the law.”

Industry representatives said the EPA didn’t require permits for using diesel in hydraulic fracturing until June 2010 – after the period in the congressional study.

“The letter relies entirely on the notion that historically the EPA has regulated hydraulic fracturing, and that’s not the case,” said Matthew Armstrong, an attorney with Bracewell & Guiliani who represents a number of energy companies.

Hydraulic fracturing is a drilling technique that involves pumping millions of gallons of water mixed with sand and chemicals into underground formations to release greater quantities of gas and oil. The technique dates back several decades, but it has drawn new scrutiny from the public and regulators as its use has grown in recent years.

Concerns include the potential for the chemicals to get into drinking water or for natural gas to migrate into water wells.

The industry says such incidents are rare and can be avoided.

Most hydraulic fracturing fluid uses water as its primary component, but in formations where water is absorbed too easily – such as in certain kinds of clay – diesel is used as an additive.

It usually is just one component of the chemical used in the mix.

Armstrong said about a third of the 32 million gallons referred to in the letter was straight diesel fuel.

The EPA and industry agreed in 2003 that diesel wouldn’t be used in hydraulic fracturing jobs in coal bed methane formations, because drilling in those formations tends to be closer to drinking water sources.

But oil field services giants Halliburton and BJ Services, among other companies, say that agreement doesn’t apply beyond drilling operations in those formations.

The EPA first said it would require companies to seek permits to use diesel in non-coal bed operations last June, in a posting on the agency’s website.

That wasn’t a proper way to change the rules, Halliburton said in a statement.

“This action did not follow the standard administrative processes required in adopting new federal regulatory requirements, and the companies involved had no knowledge this change was being made by the EPA,” the company said.

Halliburton is among the companies represented by the Independent Petroleum Association of America and the U.S. Oil & Gas Association, which are challenging the EPA’s new requirement. A federal appeals court in Washington recently denied the EPA’s motion to dismiss the case, and the court will hear arguments later this year.

Gary Flaharty, a spokesman for Baker Hughes – which recently acquired BJ Services, the company that used diesel most heavily in fracturing during the study period – said the EPA’s position during hearings before Waxman last year was that federal regulation did not expressly permit or prohibit the use of diesel in fracturing.

“Retroactively requiring a permit is improper,” Flaharty said.

The probe found no evidence that the use of diesel fuel contaminated water supplies, but it noted none of the companies could provide data on whether they performed hydraulic fracturing in or near underground sources of drinking water.

The lawmakers are asking the EPA to look at diesel use in its ongoing study into the safety of hydraulic fracturing.

About half of the 32.2 million gallons of fluid containing diesel was injected in Texas, followed by Oklahoma, North Dakota, Louisiana and Wyoming.

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