What makes fracking controversial is the chemicals that are pumped into the rocks to free up the oil and gas. They are dangerous and can be toxic. It's not clear what happens to the water that doesn't get pumped out. Critics worry about increasing pollution of groundwater supplies.

Fracking supporters believe it's just about impossible for liquids to migrate many thousands of feet higher into local aquifers that supply drinking water to local residents. There's a larger question about how well the drilling liquids are treated after they are pumped back to the surface for disposal.

At the same time, fracking has been accused of creating earthquakes in Ohio and Oklahoma.

Scientific American noted a year ago that "a long list of technical questions remains unanswered about the ways the practice could contaminate drinking water, the extent to which it already has, and what the industry could do to reduce the risks."

A boon for the economy

Worries aside, fracking is moving fast. The technology has freed up such huge oil reserves in the Bakken Shale in North Dakota that the state is now the nation's second-largest oil producer (after Texas). The Bakken, however, has two big problems. First is a lack of housing and urban services in a region subject to extreme heat in summer and cold in winter.

Another obstacle is the lack of pipelines to get the oil to refineries. So, demand has soared for trains and trucks to move the oil out to existing pipelines or even to refineries on the Gulf Coast. There's a seven- to nine-month backlog of tanker-car orders. Trains have an advantage right now, Oppenheimer’s Gheit says: Minimal permitting is required for railroad spurs.

Companies produced so much natural gas from the Marcellus Shale that in March the region was producing 62% of the gas demand in the 11 Northeastern states, and natural gas futures prices collapsed below $2 per million BTU. Natural gas has rebounded back to about $3.30, but it's a marginally profitable level.

The energy industry believes fracking will also unlock oil and gas in many parts of Europe and China. But don't expect rapid moves to put rigs in the garden of your favorite French chateau, says Peter Tuz, the president of Chase Investment Counsel in Charlottesville, Va. Land-use laws in Europe and Asia are extremely complicated.

So which stocks to play?

To invest in the potential giants of this new industry, you have to decide what you want to invest in.

Exxon -- or for that matter, any of the industry giants -- will always get a piece of the energy pie. But the bottom line is that if you buy them, you’ll be putting only a sliver of that money into fracking. The other option is to buy companies tied to the industry on the bet that they'll grow into giants.

If you're interested in the oil being produced in the Bakken Shale in North Dakota and Montana, says Coleman, the Raymond James analyst, your targets are probably Continental Resources and Whiting Petroleum, along with Exxon.

For the Marcellus Shale and its vast natural gas resources, look at Range Resources, as well as Cabot Oil & Gas (COG) and Southwestern Energy (SWN). Range Resources looks best to me because it has one of the largest acreage positions in the Marcellus Shale.

And you definitely want to consider EOG Resources, which was spun out of Enron before it collapsed. EOG has operations in all the new fields that have been developed. The shares jumped 8% in 2011, despite falling natural gas prices. They're up nearly 26% this year.

Click here to become a fan of MSN Money on Facebook

What gives the company an edge right now is its large inventory of drilling rights to potentially new crude oil reserves in the Eagle Ford Shale of South Texas and the Bakken and Three Forks shales in North Dakota. And, assuming natural gas prices move higher, it has drilling acreage in the Haynesville Shale of Texas and Louisiana and the Marcellus Shale.