An EPA draft report said dangerous amounts of benzene were found in a deep water well monitored near Pavillion in central Wyoming, the EPA said in a news release.
However, the EPA said samples from drinking water wells indicated levels of dangerous compounds "are generally below established health and safety standards."
"Fracking," hydraulic fracturing, involves injecting water mixed with chemicals and sand at high pressure into shale formations to fracture rock and unlock reservoirs of natural gas. Environmentalists and the oil and gas industry have been embroiled in debate over the threat fracking might pose to groundwater and wells.
Encana, a Canadian company with 169 producing wells in Pavillion, said it rejected the EPA's deep water well findings.
"They don't have a conclusion here, they have a probability -- and we would argue that it is a very poor probability," Douglas Hock, an Encana spokesman, said in a statement on the company Web site.
"Experts, families in Wyoming and communities nationwide have known for some time that fracking poses serious threats to safe drinking water," Amy Mall of the Natural Resources Defense Council said. "EPA's latest acknowledgment of that fact underscores the urgent need to get federal rules and safeguards on the books."