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New York Attorney General Sues Feds Over Shale Rules

Following through on his threat (see Shale Daily, May 31), New York State Attorney General Eric Schneiderman sued the federal government Tuesday for not conducting a full environmental review of proposed regulations for Marcellus Shale development in the Delaware River Basin.

"Before any decisions on drilling are made, it is our responsibility to follow the facts and understand the public health and safety effects posed by potential natural gas development," Schneiderman said. "The federal government has an obligation to undertake the necessary studies, and as I made clear last month, this office will compel it to do so. The welfare of those living near the Delaware River Basin, as well as the millions of New Yorkers who rely on its pure drinking water each day, will not be ignored."

The Delaware River Basin Commission (DRBC) proposed regulations last year to allow water from the basin to be used for gas development (see Shale Daily, Dec. 10, 2010). The rules also set out guidelines for operators to reuse flowback and production waters, treated wastewater and mine drainage waters. The DRBC must now wade through more than 40,000 public comments before it can propose and adopt final rules, a process it does not expect to complete before September (see Shale Daily, April 18).

Drilling in the basin is on hold until the regulations are finalized.

Calling it a matter of "both the law and common sense," Schneiderman gave the federal government a 30-day ultimatum in April: commit to conduct a National Environmental Policy Act (NEPA) review of the regulations or face a lawsuit (see Shale Daily, April 21). The feds, though, didn't budge.

"While we share and understand your concerns about the environmental issues surrounding proposed development in the Delaware River Basin, the DRBC itself is not a federal agency subject to NEPA, and the mere participation of a federal officer in the DRBC regulatory process does not constitute a federal action," Brigadier Gen. Peter A. DeLuca, division engineer for the North Atlantic Division of the U.S. Army Corps of Engineers, wrote to Schneiderman last week. "We therefore believe that the federal commissioner is neither required to produce, nor has the statutory authority to perform, a study under NEPA as part of this process."

NEPA requires federal agencies to review projects or regulations that might have significant environmental impacts.

Because nearly 60% of New York City's West-of-Hudson watershed is in the basin and because of the potential environmental impacts of hydraulic fracturing, Schneiderman argued that NEPA requires DRBC to conduct the review. DeLuca disagreed, not only about the demands of the law but also about how the sparring parties should proceed.

He asked Schneiderman to coordinate with New York's representative on the DRBC and to track the ongoing studies of hydraulic fracturing and shale development currently being conducted by the U.S. Environmental Protection Agency, the U.S. Department of Energy and the U.S. Geological Survey, among other federal agencies. "We do not believe that litigation is necessary or an appropriate means to address our shared concerns about the impact of natural gas production," DeLuca wrote.

The DRBC is a federal-interstate authority that oversees both water quality and water use in the 13,539-square mile Delaware River Basin, a watershed that provides water for more than 15 million people. The five-member commission includes representatives from the four states inside the basin -- Delaware, New Jersey, New York and Pennsylvania -- as well as the federal government.

Schneiderman filed the lawsuit in the U.S. District Court, New York Eastern District.

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