The EPA will also test water at 60 homes to assess whether any residents are being exposed to hazardous substances, the agency said in a statement.

“EPA is working diligently to understand the situation in Dimock and address residents’ concerns,” EPA Regional Administrator Shawn M. Garvin said in a statement. “Conducting our own sampling will help us fill information gaps.”

Residents and activists protested outside a venue where EPA Administrator Lisa Jackson was speaking in Philadelphia last week, urging her to force Houston-based Cabot to clean up wells they say were contaminated after drilling started nearby. The company is using hydraulic fracturing, or fracking, a process that injects water and chemicals to free gas in rock.

Cabot has no data that indicates natural gas operations are the cause of the concerns identified by the EPA, George Stark, a company spokesman, said. He said the agency is conducting an “unwarranted investigation.”

“Cabot looks forward to helping educate the U.S. EPA on the ground water and geological features of Susquehanna County,” where Dimock is located, Stark said in an e-mail.

The agency offered water to the families earlier this month and then reversed the decision the next day. The EPA now has agreed to start water delivery tomorrow, Michael Kulik, an agency spokesman, said in an e-mail.

Court Case Pending

Dimock residents say their water went bad more than three years ago. In an agreement with state environmental regulators, Cabot pledged to install methane-removal equipment on wells and set aside $4.1 million to pay residents who say they were harmed. The company didn’t admit fault.

Some residents settled. Others went to court and their lawsuit is pending. EPA officials visited residents at the end of last year, and told some not to drink their well water.

In Pennsylvania, the economic losses from possible environmental damage could be high. Drilling in the state’s portion of the gas-rich Marcellus Shale formation could generate $20 billion for the state’s economy by 2020, up from $13 billion last year, according to an industry-funded study published by researchers from Pennsylvania State University.

Separately, the U.S. House Oversight Committee led by California Republican Darrell Issa today asked the Energy Department for transcripts of interviews regarding fracking.

In an e-mailed statement, Issa said the committee also asked Jackson to explain documents obtained by the panel that “appear to indicate” that the EPA “is planning for a future where new supplies of natural gas are limited because of the agency’s concern about the environmental impacts” of the process.

To contact the reporter on this story: Mark Drajem in Washington at +1-

mdrajem@bloomberg.net