Shale Daily / NGI All News Access

New York Official Floats Drilling Clean-Up Fund

Proposed legislation to require natural gas operators to pay for the costs to remediate contamination caused by drilling wells is being floated by New York State Comptroller Thomas DiNapoli.

"Preventing accidents and contamination should always be our first priority," DiNapoli stated. "But it's impossible to eliminate all risk. If an accident does occur, the state needs to be ready with a rapid response and a reliable mechanism to hold polluters responsible."

The official noted that New York had begun to debate "the many serious issues related to the production of natural gas from the Marcellus Shale. The only current remedy for private citizens who suffer damages to their property from natural gas production is to enter into litigation, which has the potential to be costly, difficult and slow."

The legislation, which is to be submitted to the New York State Assembly this week, would enable the state to set up an industry-financed fund from which property owners could recover drilling-related damages. The program would apply to current vertical drilling operations as well as horizontal well operations, which generally use hydraulic fracturing (fracking) stimulation.

State regulators and the public currently are debating the use of fracking; the New York Department of Conservation in July recommended that the state require operators to disclose frack chemicals used and to ban the practice in all of the state's primary aquifers, the watersheds in New York City and Syracuse and all state-owned land (see Shale Daily, July 5).

The proposed New York Natural Gas Production Contamination Damage Recovery and Remediation Fund legislation would be formally introduced by representatives when the Assembly is back in session, DiNapoli said. The legislation is modeled after the New York State Environmental Protection and Spill Compensation Fund. If enacted, the bill would be administered by the comptroller's office, which would establish absolute liability for damages caused by gas production.

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