Pennsylvania lawsuit says drilling polluted water

* Suit seeks to link fracking and polluted water

* Company says suit without merit, plans to defend

By Jon Hurdle

AVELLA, Pennsylvania, Nov 9 (Reuters) - A Pennsylvania landowner is suing an energy company for polluting his soil and water in an attempt to link a natural gas drilling technique with environmental contamination.

George Zimmermann, the owner of 480 acres (194 hectares) in Washington County, southwest Pennsylvania, says Atlas Energy Inc. (ATLS.O) ruined his land with toxic chemicals used in or released there by hydraulic fracturing.

Water tests at three locations by gas wells on Zimmermann's property -- one is 1,500 feet (460 metres) from his home -- found seven potentially carcinogenic chemicals above "screening levels" set by the U.S. Environmental Protection Agency as warranting further investigation.

Jay Hammond, general counsel for Atlas, said Zimmermann's claims are "completely erroneous" and that the company is in compliance with Pennsylvania's gas-drilling regulations. Hammond said Atlas will "vigorously" defend itself in court and declined further comment.

But Zimmermann says he has evidence that chemicals used by Atlas contaminated his land.

"There are substances that can't be made by nature and that's what's in the ground," he told Reuters during an interview in his 12,000-square-foot house on a remote hilltop.