The U.S. Environmental Protection Agency announced Thursday it is dropping its longstanding plan to have independent scientists review its finding that hydraulic fracturing may be linked to groundwater pollution in central Wyoming.

The EPA is standing by its findings, but state officials will lead further investigation into the pollution in the Pavillion area. The area has been a focus of the debate over whether fracking can pollute groundwater ever since the EPA's initial report came out in late 2011.

"We stand behind our work and the data, but EPA recognizes the state's commitment to further investigation," said agency spokesman Tom Reynolds in Washington, D.C. The EPA will let state officials carry on the investigation with the federal agency's support, he said.

Wyoming officials have been skeptical about the theory that fracking played a role in the pollution at Pavillion, but Reynolds expressed confidence the state could lead the work from here. He described the shift as the best way to ensure Pavillion-area residents have a clean source of drinking water.

Even so, industry officials who have been doubtful about the EPA findings all along praised the change as confirmation of their view that the science wasn't sound.

"EPA has to do a better job, because another fatally flawed water study could have a big impact on how the nation develops its massive energy resources," Erik Milito, director of upstream and industry operations for the American Petroleum Institute, said in a release.

Richard Garrett, energy and legislative advocate with the Wyoming Outdoor Council in Lander, said he believes Thursday's announcement shows the EPA is finding it more difficult than originally expected to come to grips with the full environmental effect of fracking. He noted that the EPA is pushing back other work aimed at gauging the how energy production may pollute groundwater.

"It's not surprising to me that they're kind of taking a secondary role in rural Pavillion," Garrett said. "It looks to me like it might be a resource issue. That goes to the federal budget I suppose, and EPA administration."

Hydraulic fracturing, or fracking, boosts the productivity of oil and gas wells by pumping pressurized water mixed with sand and chemicals into well holes to crack open fissures in the ground.

Environmentalists have voiced concern about fracking causing groundwater pollution for years, but the practice has significantly boosted oil and gas production in regions such as the Bakken Shale in North Dakota and the Marcellus Shale underlying Eastern states.

The EPA's 2011 report marked the first time the agency publicly linked fracking and groundwater contamination, causing a stir on both sides of the issue.

The federal agency began seeking nominations last year for experts to serve as peer reviewers for its draft report, and it has extended public comment periods on the report three times since it came out. Each extension delayed the peer-review plans.

EPA officials insisted Thursday that the agency is not giving up on its Pavillion research and reserves the right to pick up the investigation in the future and open it to peer review. The EPA also has been examining the relationship between fracking and groundwater in different areas of the country and is proceeding with that study.

The Northern Arapaho Tribe on the Wind River Indian Reservation surrounding the Pavillion area has been seeking to maintain a role in the Pavillion research since taking part in new sampling last year. A tribal official said, however, that the EPA hasn't worked closely with the tribe lately.

"They have a legal duty to consult with the tribe and that didn't happen as part of their dialogue with the governor," Ronald Oldman, co-chairman of the tribe's business council, said in a statement.

The new research led by Wyoming officials would be funded at least in part by a $1.5 million grant from Encana Corp.'s U.S. oil and gas subsidiary, which owns the Pavillion gas field. The state will issue a final report in late 2014, Gov. Matt Mead's office said in a news release.

Mead said Wyoming will focus on making sure the few dozen affected residents of the rural, farming and ranching country a few miles outside Pavillion, population 230, have a clean source of drinking water. The state has been providing water cisterns to 20 people in the area.

"It is in everyone's best interest -- particularly the citizens who live outside of Pavillion -- that Wyoming and the EPA reach an unbiased, scientifically supportable conclusion," Mead said in a news release. "I commend EPA and Encana for working with me to chart a positive course for the investigation."

The study will assess the need for any further action to protect drinking water sources, according to the release.

The Encana funding will pay to examine 14 domestic water wells in the Pavillion field for water quality and palatability concerns.

Local residents have complained for more than seven years that their water began to reek of chemicals since fracking occurred in their neighborhood. However, EPA efforts to find potential pathways from deeper areas where gas is extracted to shallower areas tapped by domestic water wells have been inconclusive, the news release said.

"We're pleased that EPA has agreed to discontinue the investigation," Encana spokesman Doug Hock said. "We applaud the fact that further efforts in Pavilion will focus on a few specific complaints about perceived changes in domestic water well quality."