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New York State Proposes Rules for Marcellus Drillers

Exploration and production (E&P) companies that want to drill the gas-rich Marcellus Shale in New York State would have to disclose the contents of hydraulic fracturing (hydrofracing) fluid they would use, and test water wells in drilling areas before beginning to drill, according to draft rules released last Wednesday by the state's Department of Environmental Conservation (DEC).

This past summer landowners protested the DEC's moratorium on gas drilling in the Marcellus, which is expected to remain in effect until the DEC completes its review of environmental impacts of deep horizontal drilling and hydrofracing (see NGI, Aug. 31; July 28, 2008).

The DEC's Supplemental Generic Environmental Impact Statement (SGEIS) addresses the range of potential impacts of shale gas development using horizontal drilling and high-volume hydrofracing and outlines safety and mitigation measures that operators would have to follow to obtain permits. Gov. David A. Paterson directed DEC to prepare the SGEIS.

Prior to hydrofracing a well, operators would have to complete a "pre-frac checklist and certification form" to ensure technical compliance with the permit and to provide information regarding final well-bore construction and hydrofracing operations.

Disclosure of the chemicals in hydrofrac fluids has become a point of contention in the gas patch as oilfield service companies claim that the composition of fluids is proprietary information and some E&P companies call for disclosure in order to allay concerns about hydrofracing practices (see NGI, Sept. 28). Following release of the SGEIS, the American Petroleum Institute noted that DEC "has previously noted there was 'no record of any documented instance of groundwater contamination caused by hydraulic fracturing for gas well development in New York, despite the use of this technology in thousands of wells across the state during the past 50 or more years.'"

Under the DEC proposal, before drilling operators would have to test private water wells within 1,000 feet of the drill site to provide baseline information and allow for ongoing monitoring. If there are no wells within 1,000 feet, the survey area would extend to 2,000 feet.

Manhattan Borough President Scott Stringer criticized the proposed rules for not doing enough to protect New York City's water supply. "Today the state Department of Environmental Conservation made a serious mistake by failing to ban drilling for natural gas in the upstate watershed that supplies New York City's drinking water," he said. The state's mitigation proposals are half measures; they are not adequate for protecting the health of eight million New Yorkers. With a special permit, the state would allow drilling within 1,000 of water tunnels. Toxic wastewater could be kept near our water supply for up to seven days. Buffer zones around reservoirs fail to exclude drilling in the larger area designated as New York City's watershed."

Independent Oil & Gas Association of New York (IOGA) Executive Director Brad Gill said the association is reviewing the draft "and remains optimistic that the state DEC has found a balance that continues to protect New York's environment and allows responsible exploration for natural gas in the Marcellus Shale. Oil and gas producers have an outstanding record of environmental and operational safety in New York. A regulatory structure that is tough, but fair will allow this state to realize this tremendous economic opportunity."

According to the draft, companies would have to meet more stringent requirements to withdraw water for their operations. Not only would they have to follow Susquehanna River Basin Commission and Delaware River Basin Commission protocols where applicable, they also would have to complete a more stringent and protective stream flow analysis in regards to water withdrawal plans -- whether inside or outside the Susquehanna or Delaware basins.

Before beginning to drill, all operators also would have to prepare plans for mitigating greenhouse gas emissions, visual and noise impacts. If a drilling company has not reached a road-use agreement with the pertinent local government, a trucking plan containing the estimated amount of trucking, approach for avoiding peak traffic hours, appropriate off-road parking/staging areas, and routes would be required.

During drilling and afterward state inspectors would have to be present when operators begin cementing well-bore casings. More stringent drilling and casing requirements would have to be met, and special requirements would be imposed to expeditiously remove fluids from on-site reserve pits or well pad tanks. Operators storing water flowing back from wells onsite would have to use steel tanks; those storing flowback water from multiple wells in a centralized location would have to use a double-liner system. Centralized flowback facilities would be prohibited within the boundaries of public water supplies (including the New York City Watershed).

A new "drilling and production waste tracking" process (similar to the process for medical waste) would be used to monitor disposal. Full analysis and approvals under state water laws and regulations would be required before a water treatment facility could accept flowback from drilling operations.

The SGEIS contains a number of mitigation measures aimed at protecting the New York City Watershed, defining buffer zones around reservoirs and other water bodies. Wells proposed within a 1,000-foot corridor of water tunnels or aqueducts would require special approvals -- including a site-specific environmental impact statement and review by the DEC.

New York Rep. Maurice Hinchey, a Democrat, has advocated federal regulation of hydrofracing activities. He said he welcomed the DEC draft.

"New York may soon see an extensive level of natural gas drilling, and it's imperative that we take every step possible to ensure the protection of the environment from the potentially harmful practice of hydraulic fracturing," he said. "We cannot afford to make a mistake that could result in irreparable damage being done to our drinking water supplies and the overall environment. Given that the draft report released today is 800 pages long, it will take some time to read the full document and get a full grasp of what the DEC is proposing."

The SGEIS, available on the DEC website, expands on the Generic Environmental Impact Statement, adopted in 1992, which has prescribed the requirements to drill thousands of oil and gas wells in the state. DEC will be announcing times and locations for a series of public information sessions. It also has a web page dedicated to the Marcellus Shale. The public comment period on the draft will be open until Nov. 30.

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