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New York Hydrofrack Review Possible by June, Says Incoming Regulator

New York should proceed cautiously as it considers how to regulate hydraulic fracturing (hydrofracking) in shale drilling operations, but the state shouldn't wait for federal authorities to complete a lengthy review, the incoming Department of Environmental Conservation (DEC) chief said Tuesday.

In a legislative hearing acting DEC Commissioner Joe Martens said the agency's updated draft regulations could be completed in June, slightly ahead of schedule. Gov. Andrew Cuomo nominated Martens to lead the DEC; his confirmation awaits state Senate approval.

Last December former Gov. David Paterson extended until July 1 a deadline for the DEC to prepare a supplemental generic environmental impact statement (SGEIS) on hydrofracking (see Shale Daily, Dec. 14, 2010). In July 2008 Paterson had directed DEC to prepare the SGEIS, which effectively placed a moratorium on drilling horizontal wells in the New York portion of the Marcellus Shale (see Daily GPI, July 28, 2008).

Once the SGEIS is issued, the draft rules would be subject to a 30-day public comment period; final rules then would be issued.

"I think there are concerns across the board for [Assembly] members who have Marcellus Shale concerns in their districts," Martens said following the hearing. "Some of those concerns are about how quickly we can get through the process. Others are concerned about [what] the conclusions [will be] when we are through the process...

"All I can say is, the agency is pouring a lot of resources into reviewing the issue...and staff is confident that the process is going to lead to a good result...to safeguard the environment...but I can't prejudge it...When we are 100% complete, we'll put it back out there and the public can get another look and respond."

Martens spoke to Assembly members when he delivered Cuomo's proposed DEC budget for fiscal 2011-2012. He discussed the hydrofracking issues with members of the legislative fiscal and environmental conservation committees.

More than 13,000 comments have been received by the DEC regarding the SGEIS and about 85% of the comments have been addressed, he noted. In addition, state health and energy officials are reviewing the impact of hydrofracking and any incidents related to it in several states, including Pennsylvania and Texas.

"We won't undertake drilling until we're confident it can be done safely," Martens said. "Protecting water supplies is, at the essence, our highest priority."

Under questioning from Assemblywoman Barbara Lifton (D-Ithaca), Martens said hydrofracking was the DEC's top priority.

"I think it's fair to say they're taking every single comment seriously," Martens said of the DEC. "It will...look again at cumulative impact. I think it will be up to the public again when we release the final draft whether or not DEC has done a good job."

At the hearing Lifton called hydrofracking "the environmental issue of the century" for the state and she wants DEC to postpone finalizing the SGEIS until the Environmental Protection Agency (EPA) has completed its lengthy review on the potential environmental impacts of hydrofracking.

EPA on Tuesday submitted a 140-page draft to its Science Advisory Board to study potential drinking water contamination associated with chemicals and fluids used in hydrofracking (see Shale Daily, Feb. 9). The board is scheduled to review the draft plan on March 7-8, and the public would have an opportunity to comment.

Before he was nominated to lead the DEC, Martens last year suggested that the state should wait until EPA's study was completed on hydrofracking before implementing rules for New York drillers (see Shale Daily, Jan. 6). He was asked if his comments as then-president of conservation organization Open Space Institute "squared" with his testimony to legislators.

"I think it does," Martens said. "I said then that we have to be very cautious. If anything, we are being very cautious. The state of New York, the prior governor, extended the [SGEIS] process to make sure everybody had an opportunity to see what DEC was proposing. And everybody has deluged us with questions, comments, criticisms...that we are in the process of addressing..." Hydrofracking "is an industrial activity that has potential environmental consequences...and we're trying to find ways to address it."

Martens said he hopes to partner with Ken Adams, Cuomo's nominee for CEO of the state's economic development agency, the Empire State Development Corp., "to make sure that we are working together to promote a strong economy and clean environment...I intend to make sure that DEC is responsive to business and that we work together to avoid regulatory stalemate. A vibrant economy and a healthy environment are not incompatible; in fact, they go hand in hand."

The DEC, he noted, manages nearly five million acres of state land; 70,000 miles of rivers and streams, and 4,000 lakes and ponds; inspects 4,000 solid, hazardous waste, pesticide and radiation facilities; issues 750,000 hunting and fishing licenses; and issues 15,000 permits every year.

Although it faces a 10% cut this year in its operational spending, DEC still has about 3,000 staff members, down around 850 employees since April 2008, Martens said. Former DEC Commissioner Pete Grannis last year warned that budget cuts and attrition were threatening the commission's oversight abilities (see Shale Daily, Nov. 23, 2010).

Despite the smaller staff, DEC is close to its newly authorized staffing level and continues to "recalibrate" to perform essential work, said Martens. The SGEIS is regulators' primary focus, and that scrutiny has extended "across all divisions" from the DEC to the Department of Health.

"We're focusing on the Supplemental GEIS right now," Martens told legislators. "We're devoting a lot of manpower to complete the process for the SGEIS."

The permitting process is another issue that DEC will have to address down the line, said Martens, when asked whether the agency has adequate staff to review permits. Once the SGEIS is finalized, DEC will begin "looking at permit applications," Martens said. "We will only review applications to the extent that we have staff to do so. If we get thousands of applications, then no, we won't be able to handle it and we'll have to reallocate staff."

State Sen. Thomas Libous (R-Binghamton) said he is concerned that permitting will be delayed at the DEC under Martens.

"We really need to have a commissioner that's going to be serious about the permitting process," said Libous. Increased gas drilling would be "a tremendous answer to our economic problems not only in upstate New York but throughout the state."

However, Katherine Nadeau of Environmental Advocates of New York said she thought Martens was "doing the right thing when he says we need to be cautious and proceed slowly. We're excited to work with him and the Department of Environmental Conservation going forward."

Also on Tuesday the Common Council in Buffalo, NY, became the latest city to ban hydrofracking. Considered a symbolic gesture, several small municipalities within the Marcellus Shale have in recent months voted to ban hydrofracking; the Pittsburgh and Philadelphia city councils also voted to ban the practice (see Shale Daily, Jan. 20; Nov. 17, 2010).

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