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Summary of Shale Study Expected in New York

Officials with the New York Department of Environmental Conservation (DEC) said they plan to make an announcement Friday on the status of the state's long-awaited environmental impact study on horizontal drilling and hydraulic fracturing (fracking) in the Marcellus Shale.

Estimates put potential natural gas reserves in New York's portion of the Marcellus Basin behind those of Pennsylvania and West Virginia, where drilling and production have been flourishing over the last several years.

Meanwhile, the New York Times, just days after publishing stories questioning shale prospects (see Shale Daily, June 29; June 28), published another one on its website Thursday asserting that Democratic Gov. Andrew Cuomo was poised to unilaterally lift the state's de facto moratorium on fracking.

In fact, the DEC has said it will be making an announcement on Friday (July 1) regarding its supplemental generic environmental impact statement (SGEIS). "There will be an announcement explaining the status of the report on the 1st [of July]," DEC spokesman Michael Bopp told NGI's Shale Daily on Thursday. "It may not be the release of the full report, but it will be an explanation about what we are providing to the governor."

Chris Tucker, spokesman for the shale gas education initiative Energy In Depth, told NGI's Shale Daily that the DEC should release an executive summary of the SGEIS to the public on Friday and will give the governor the full report, which could total more than 1,000 pages.

"At some point next week we should get the actual full document," Tucker said Thursday, adding that the release would then mark the beginning of a comment period. "Within that comment period we expect DEC to convene some community meetings and gather comments, and issue a final report sometime by the end of summer or early fall.

"At that point, that's the road map. Those are the regulations that are going to be in place governing Marcellus development in the future. At that point we can actually ask for a permit and get one."

In July 2008, then-Gov. David Paterson ordered the DEC to complete the SGEIS, which effectively placed a moratorium on drilling horizontal wells in the New York portion of the Marcellus Shale. In the closing days of his term Paterson extended the SGEIS deadline until July 1, 2011 (see Shale Daily, Dec. 14, 2010). Once the SGEIS is issued, the draft rules would be subject to a public comment period; final rules then would be issued.

Asked how long the comment period would be, Tucker said, "The lawyers we have talked to in Albany say it's going to be 45 days, but it could easily be 30 or it could be 60. The DEC has not announced that either."

According to the DEC, there are currently only 14 active wells in New York targeting the Marcellus. Talisman Energy Inc. and partner Fortuna operate five wells, EOG Resources and Quest Eastern Resource LLC each operate three, Chesapeake Energy Corp. two, and one is being developed by U.S. Energy Development Corp.

The wells are in Schuyler, Steuben, Broome and Chautauqua Counties, all of which are on or near the Pennsylvania/New York border, and are therefore adjacent to the bustling drilling activity in Northern Pennsylvania.

Just across the border in Pennsylvania's Susquehanna County two monster wells capable of producing 30 MMcf/d were recently brought in by Cabot Oil and Gas Corp.

An assessment done in 2008 by noted Pennsylvania State University geologist Terry Engelder said total potential Marcellus reserves were 489 Tcf, with Pennsylvania having the highest potential of 291 Tcf, West Virginia second with 77 Tcf, New York third with 71 Tcf, Ohio with 18 Tcf and Maryland with 3 Tcf.

Overall, New York has issued 153 permits for wells targeting the Marcellus Shale formation since 2006.

On Thursday the NYT reported that officials in Cuomo's administration were discussing a plan to have fracking banned in the portions of the state that serve as watersheds for New York City and Syracuse, but it did not cite any specifics.

The article appears to have unleashed a media frenzy, with the DEC referring all media inquiries to the governor's office. Cuomo spokesman Josh Vlasto was quoted by the NYT as saying that its reporting on the matter was "baseless speculation and premature."

"I was frankly a little surprised by how it was worded," Tucker said of the NYT article. "This is not a huge story. This is a part of the process that we have been expecting now for several months."

Thursday's NYT article follows several others attacking the natural gas industry this year. In February, reporter Ian Urbina penned a series of articles about fracking that were criticized for being based on questionable facts (see Shale Daily, March 1). Urbina then wrote follow-up stories on Sunday and Monday this week questioning the economics of shale gas.

Environmental groups were stunned by Thursday's NYT article.

"To put it bluntly, we are incredulous that Gov. Cuomo would try to fast track an environmental review process that's already under way," Erica Ringewald, spokesperson for Environmental Advocates of New York, told NGI's Shale Daily on Thursday. "In the past he has said that New York shouldn't pursue fracking unless we know it can be done safely, that New York's watersheds are sacrosanct."

On the NYT's speculation that the watersheds serving New York City and Syracuse would possibly be excluded from fracking, Ringewald said, "That's curious. If two watersheds are going to be restricted, that suggests fracking isn't 100% safe. And if that's the case, all of New York's water needs to be protected equally."

On June 6, the New York Assembly passed a bill that would have limited fracking, but it was referred to the state Senate Environmental Conservation Committee and was not taken up for a vote before the legislative session ended last Friday. The bill, A7400, would have prohibited fracking until June 1, 2012 (see Shale Daily, June 8).

Last December Paterson vetoed a bill similar to A7400, which would have codified into law a moratorium on fracking through May 15.

In late May state officials made another push for the study to be completed by the deadline, and they also ordered regulators to visit the site of a Chesapeake well blowout that occurred in April in northeast Pennsylvania (see Shale Daily, June 1; April 25).

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