You are right to be worried about hydraulic fracturing

Hydraulic fracturing is not an activity with which most people are familiar, but those in the oil and gas business know it well. In use for the past 50 years, hydraulic fracturing involves the injection of diesel fuel, hydrochloric acid, water, sand or other substances into the ground, in order to facilitate the extraction of oil or natural gas.
To date, it has not been wildly controversial. Carol M. Browner, President Clinton's Environmental Protection Agency administrator, told Congress that hydraulic fracturing had never been proven to contaminate groundwater, and her agency testified the same in court.

Nevertheless, the thought of what could happen to underground water supplies when diesel fuel and other poisonous-sounding substances are injected into the ground continues to worry people, and there is some evidence that they are right to be worried. In Alabama, where the technique is widely used, the owners of a water well believed their water had been poisoned by the practice (a "black jelled substance" started coming out of the tap, according to one of lawyers involved).
They filed a lawsuit and won, forcing the EPA to regulate the practice more strictly in that state, and opening up the possibility of regulation elsewhere. EPA launched a study of the issue, resulting in a draft report which recommends, among other things, that the industry stop pumping diesel fuel into the ground.

The agency might have saved itself the effort. A clause contained in the House version of a currently pending energy bill and slated to appear in the final legislation will simply lift the issue out of the reach of federal regulators altogether. That will end the debate, at least for a while.
It will also help out a small group of powerful oil and gas companies, among them Halliburton, the former employer of Vice President Cheney and the company that invented hydraulic fracturing. In another context, it might be possible to nod at the House Energy and Commerce committee's claim that the states do a perfectly good job of regulating hydraulic fracturing and that there is no need for federal legislation.

Given the context -- a pork-laden energy bill chock full of perks for the oil and gas industry and the deep involvement of the vice president's former company, it just isn't possible to take the "states' rights" rhetoric seriously.
It behoves Congress to bend over backward to avoid the appearance of favouritism.