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Reaction Mixed on Plan That Would Open 85% of NY Marcellus to Fracking

Having stonewalled shale gas drilling for three years, the New York Department of Environmental Conservation (DEC) released its recommendations on hydraulic fracturing (fracking) late Thursday. The list includes requiring full disclosure of fracking chemicals and a ban in all primary aquifers, the watersheds of New York City and Syracuse, and all state-owned land, including state parks.

Meanwhile DEC Commissioner Joseph Martens announced his appointments to a High-Volume Hydraulic Fracturing Advisory Panel on Friday. The panel will oversee fracking in the state once the legislature adopts permitting standards for shale gas drilling.

"This report strikes the right balance between protecting our environment, watersheds and drinking water, and promoting economic development," Martens said.

The DEC said a 60-day comment period on the recommendations would begin in August and said as of now "there is no administrative or discretionary moratorium on high-volume fracturing." But, the department added that no fracking permits would be issued until after the public comments were reviewed, the final supplemental generic environmental impact statement [SGEIS] was released and "proper enforcement capacity" was in place.

The industry's response to the news was mixed. "In reviewing the New York Department of Environmental Conservation's statement in advance of the full SGEIS, we are encouraged by the apparent acknowledgement that natural gas can be developed safely and responsibly in New York with appropriate state oversight," said Tom Amontree, executive vice president of America's Natural Gas Alliance. "However, we will have to review the full study before drawing any conclusions about the plan."

Amontree added that while New York has "vast natural gas resources," the state currently is a net importer of 96% of its gas. "On the positive side, the state is our nation's fourth biggest consumer of the fuel, and the proposal clearly recognizes the potential natural gas has to produce cleaner power and transportation choices," he said. "The natural gas industry in neighboring Pennsylvania supports 53,000 jobs and is responsible for $12.9 billion in economic activity in that state. New York can reap similar substantial economic opportunities while helping us continue to demonstrate our commitment to developing the resource in a responsible manner."

The American Petroleum Institute (API) said that if the DEC's recommendations are implemented, the state would be preventing the use of thousands of acres that could be developed safely and responsibly for the benefit of New Yorkers. Citing a recent study by the Center for Energy Policy and the Environment at the Manhattan Institute, API said the Marcellus gas industry in New York could be generating more than $11.4 billion in economic output, almost $1.4 billion in additional tax revenue and up to 18,000 jobs in the southern tier alone by 2020.

Brad Gill, executive director of the Independent Oil & Gas Association of New York (IOGA), said in a written statement that the organization was looking forward to reviewing the complete SGEIS and determining "if the protections outlined by the [DEC] strike a fair balance between protecting New York's environment and allowing the expansion of natural gas exploration in New York's Southern Tier."

Meanwhile environmental groups said they were "uneasy" with the DEC's recommendations so far.

"By improving the SGEIS, the DEC seems to recognize that industrial gas development can have a severe impact on the environment, health, and communities," Nadia Steinzor, spokeswoman for the Earthworks Oil & Gas Accountability Project, said in a written statement. "But strong regulations and the means to enforce them must be in place before more drilling is allowed, and all New Yorkers must be equally protected."

The DEC also said its draft SGEIS on fracking, issued in 2009, "did not adequately consider the community and socioeconomic impacts of high-volume fracturing." To remedy the problem, the DEC said it has hired independent consultants to evaluate socioeconomic, transportation, visual and noise issues. The department said it expects the research to be completed by July 31.

"These recommendations, if adopted in final form, would protect the state's environmentally sensitive areas while realizing the economic development and energy benefits of the state's natural gas resources," the DEC said.

Under the recommendations, the DEC calculated that about 85% of the Marcellus Shale play in the Empire State would be accessible to natural gas extraction through fracking, but it would be on privately held land.

The decision to ban fracking in the New York City and Syracuse watersheds was a reversal from the 2009 draft SGEIS. The DEC said the watersheds "are unique in that they are the only unfiltered supplies of municipal water in the state and deserve special protection."

Other sources of drinking water would also be protected. The DEC said no permits would be issued for sites within 500 feet of a private water well or domestic spring, or for well pads within a 100-year floodplain.

DEC spokeswoman Emily DeSantis told NGI's Shale Daily on Friday that there would also be at least a three-year ban on issuing permits within 2,000 feet of a public drinking water supply well or reservoir. She said the ban would give the DEC time to evaluate its experience at that point and hold hearings before possibly allowing permitting in those areas.

The DEC said a third cemented well casing would be required in most cases to prevent the migration of gas into groundwater. Storage of flowback water would be required using watertight tanks within a secondary containment structure; open containment would be prohibited. Well sites would also be required to have stormwater controls.

Also on flowback, drillers need to have their disposal plans approved by the DEC. Unlike Ohio and Pennsylvania (see Shale Daily, May 20; April 20), municipal water treatment facilities would be permitted to accept flowback water after "full analysis and approvals under existing state and federal water laws and regulations."

On water withdrawals, operators would need a special permit to take 100,000 gallons per day or more in order to comply with a new law designed to prevent "over consumption" by large-scale users (see Shale Daily, June 20).

Air quality issues were also addressed, with the DEC recommending air pollution controls on engines used at well pads and requiring the use of existing pipelines when available instead of flaring gas.

Local governments would be notified by the DEC when they issue a fracking permit, but permit applicants must also certify proposed wells comply with local land use and zoning laws.

In a separate announcement Friday, Martens named 13 people who would initially serve on the High-Volume Hydraulic Fracturing Advisory Panel. Those members include:

The complete supplemental SGEIS on fracking is to be released on Friday (July 8) (see Shale Daily, July 1). The DEC said that since September 2009, its staff has spent about 10,250 hours updating the SGEIS, which now totals more than 900 pages and is more than 150 pages longer than the 2009 draft version.

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.

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 (see Shale Daily, Dec. 14, 2010).

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 former Gov. David 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 also ordered regulators to visit the site of a Chesapeake Energy Corp. well blowout, which occurred in April in northeast Pennsylvania (see Shale Daily, June 1; April 25).

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