License to Drill? Revised Study from New York Department of Environmental Conservation Outlines Conditions for Permitting Shale Drilling – but Not in Unfiltered City Watersheds

On July 1, the New York State Department of Environmental Conservation (NYSDEC) released its much-anticipated “Preliminary Revised Draft Supplemental Generic Environmental Impact Statement (SGEIS) on the Oil, Gas and Solution Mining Regulatory Program.” Behind its fearsome name, this document outlines the parameters for a regulatory regime surrounding hydraulic fracturing in New York. The Preliminary Revised Draft SGEIS was undertaken after NYSDEC received thousands of public comments in response to the first Draft SGEIS it released in September 2009.

New York’s acceptance of hydraulic fracturing stands in contrast to recent developments in New Jersey and France, where legislators recently passed bills banning the practice. New Jersey’s bill, if signed by Governor Christie, would become the first such statewide ban in the U.S. Although New Jersey has only a small area of Marcellus and Utica Shale in the northwestern corner of the state, this legislation may put pressure on neighboring states with greater shale potential to strongly consider the environmental effects of hydraulic fracturing. To date, few jurisdictions have attempted to impose such stringent environmental safeguards while still allowing hydraulic fracturing. Consequently, New York’s decision-making process will be closely watched by stakeholders around the world.

In November 2010, the New York State Legislature passed a bill that would have banned hydraulic fracturing anywhere in the state, a bill that then-Governor David Paterson vetoed before effectively deferring further fracturing in New York until NYSDEC’s study was completed.  A NYSDEC press release on the eve of the Preliminary Revised Draft SGEIS’s release signals current Governor Andrew Cuomo’s proposed course of action: prohibit hydraulic fracturing in the New York City and Syracuse watersheds, drilling in primary aquifers, and surface drilling on certain state-owned lands. Cuomo’s administration also aims to create “rigorous and effective controls” on drilling and hydraulic fracturing on remaining lands, which NYSDEC estimates to comprise about 85 percent of the Marcellus Shale in New York.

The complete Revised Draft SGEIS is expected in August, after which time public comments will again be accepted. Until the Final SGEIS is complete, NYSDEC cannot issue permits for natural gas drilling, meaning that there is effectively a statewide moratorium on hydraulic fracturing. That effective ban will be lifted with the creation of new, stronger regulations in accordance with the Final SGEIS’s recommendations allowing NYSDEC to approve permits for hydraulic fracturing.

In its Preliminary Revised Draft, NYSDEC takes pains to address major environmental issues with shale gas development that have been raised in the last few years. In addition to permanent bans on fracturing in the New York City and Syracuse watersheds, both sources of high quality unfiltered water to large municipal areas, the draft includes the following guidelines:

  • Protecting water supplies from contamination: No permits would be issued for sites within 500 feet of a private water well or domestic use spring, within 2,000 feet of a public drinking water supply well or reservoir (at least until three years of experience elsewhere have been evaluated), or within a 100-year floodplain.”
  • Improving well construction standards to prevent methane migration:  Pennsylvania had required only two layers of steel casing, surface casing and production casing, in well construction. NYSDEC recommends requiring an additional third, cemented well casing (intermediate casing)  around most wells, which would act as an additional barrier to prevent methane migration, an issue reported by regulators and citizens in Pennsylvania.
  • Disposing of flowback water and production brine: Before any permit is issued, drilling operators would have to have NYSDEC-approved plans for disposing of flowback water and production brine. NYSDEC would also create a process to monitor disposal of flowback water and other waste streams.
  • Disclosing chemicals in fracturing fluids: Operators would be required to disclose to NYSDEC the compound name, Chemical Abstract Services number and concentrations of all products used in hydraulic fracturing, except those that may be classified as trade secrets. NYSDEC can then publically disclose any of this information not deemed proprietary. Operators would also be required to evaluate cleaner and/or safer fracturing additive alternatives.
  • Controlling air emissions: Operators would be required to use enhanced air pollution controls on all engines used at well pads. NYSDEC will improve local and regional air quality monitoring at and around well pads.
  • Mitigating greenhouse gas emissions: Operators would be required to submit greenhouse gas mitigation plans, including the use of reduced emission completions (wherein methane is captured for sale rather than vented or flared at the wellhead) and EPA Natural Gas STAR best management practices wherever possible.
  • Reducing community impacts: Community impacts, including noise pollution, infrastructure strain, and socioeconomic costs and benefits, are still under study, with results expected by the end of the month.

NYSDEC Commissioner Joe Martens also announced the creation of an expert Hydraulic Fracturing Advisory Panel, whose members include representatives of Natural Resources Defense Council (NRDC), League of Conservation Voters, Waterkeeper Alliance, Environmental Advocates, and Environmental Defense Fund, as well as academics, public servants, and industry members.

Reactions from many environmental organizations so far have been cautiously optimistic, heralding the new draft as a step forward but warning that the details must still be worked out. Kate Sinding, one of the NRDC attorneys appointed to the new fracturing advisory panel, blogged on Monday that her organization is still waiting for, among other things, more concrete NYSDEC assurances that horizontal drilling into New York City and Syracuse aquifers will not be permitted, that New York City’s aging and vulnerable water supply infrastructure will be adequately protected from drilling, that flowback water and other waste streams will be treated as hazardous waste, and that open pits for the storage and impoundment of drilling flowback water will be prohibited. Despite these reactions, however, many groups within New York continue to call for a statewide ban on hydraulic fracturing, arguing in many cases that NYSDEC should offer the same protections it accords to the New York City and Syracuse watersheds to all New York waters.

A July 8 editorial in the New York Times stated, “The Cuomo administration seems prepared to strike the right balance between environmental protection and economic development as it writes the rules that will govern hydraulic fracturing…Gov. Andrew Cuomo is obviously eager to proceed with more drilling. But the right rules must be in place first.”

If New York succeeds in developing the “right rules,” becoming, as Sinding puts it, “the first [state] in the nation to assure that human health and the environment are protected to the maximum possible extent before moving forward with risky new fracking,” it will set a valuable example for other regions around the world weighing the pros and cons of allowing shale gas development.

The “right rules” would also demonstrate to the natural gas industry that healthy debate about hydraulic fracturing, and even moratoria while environmental risks are being evaluated, can lead to improved regulations that will eventually allow shale gas development to proceed with the social license that has so clearly been missing in New York.

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