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'Considerable' Work Needed on New York Fracking Rules

New York Department of Environmental Conservation (DEC) Commissioner Joe Martens said the agency plans to maintain current staff levels during the upcoming fiscal year because the budget doesn't include funds to monitor new unconventional wells.

Testifying before a panel of state lawmakers on Tuesday on Gov. Andrew Cuomo's executive budget for fiscal year 2012-2013, Martens said "in light of the considerable work that remains before we finalize our regulatory framework, the executive budget does not include any funds for high-volume hydraulic fracturing [fracking]."

Martens said the agency had received more than 60,000 comments on its recommendations in a revised supplemental generic environmental impact statement (SGEIS) on fracking, and more than 6,000 people had attended public hearings on the practice.

"We will proceed cautiously and thoughtfully, relying on science to inform our decisions. The final result of our Marcellus Shale analysis will be better because of the many thoughtful comments we've received, along with the discussions that we've held with a large variety of stakeholders," Martens said. He added that more than 50 employees at the DEC were reviewing the comments, a process expected to take several months.

"Just like in any business, time is money," Cherie Messore, spokesperson for the Independent Oil and Gas Association of New York (IOGA), told NGI's Shale Daily on Tuesday. "This is giving more time to a process that has been going on now for a few years. So to allow for operators to plan sufficiently, we need to know that [fracking in New York] is going to happen. That way expenditures and budgeting can be done appropriately from the operator's standpoint that will allow them to do business."

John Holko, president of Lenape Energy Inc. and an IOGA board member, told NGI's Shale Daily that despite geologists' belief that New York's portion of the Marcellus Shale is mostly dry gas, energy companies were still interested in coming to the Empire State.

"Under the current economic conditions, dry gas isn't desirable right now," Holko said Tuesday. "That could change. Overall, dry gas is the most marketable and the easiest and most pervasive to use. But right at this moment, the economic conditions just don't make it as desirable."

According to various media reports, Martens told Assemblyman Robert Sweeney (D-Lindenhurst) that only a "limited" number of gas drilling permits would be approved by the DEC during the upcoming fiscal year, which begins April 1, because of staff limitations at the DEC. But the current moratorium on fracking in the state would have to be lifted first, and Martens reportedly described that scenario as speculative.

Sweeney is the primary sponsor of a bill to extend the moratorium on fracking until June 1, 2013 (see Shale Daily, Jan. 10).

Although the DEC has already recommended that fracking be banned in the watersheds of New York City and Syracuse (see Shale Daily, July 5, 2011), Martens told Assemblyman Kevin Cahill (D-Kingston) that the ban was not over fears of water contamination but renewal of the five-year Filtration Avoidance Determination (FAD) issued by the U.S. Environmental Protection Agency (EPA), currently under review. Currently, those watersheds qualify because the water is so pure.

"I think there is a significant risk if hydrofracking were allowed in those areas that the FAD might be denied and those two systems would then be required to filter [their water]," Martens said. "That's not so much contamination of water supplies [but] road construction activities, pad construction...It is runoff. There's a big emphasis on that.

"It's a $9 billion price tag if you have to filter the New York City system. It's a much smaller price tag for Syracuse, but significant nonetheless. So it's not worth the risk, in my opinion, of jeopardizing that FAD by allowing hydrofracking to occur."

Martens also told state Sen. Mark Grisanti (R-Buffalo) that he supported having the revenue generated by permit fees from oil and gas companies allocated to the DEC, specifically for the agency to hire additional staff and inspectors.

Assemblywoman Barbara Lifton (D-Ithaca), a longtime foe of fracking in New York, asked Martens if any publicly owned treatment works (POTW) in the state were currently allowed to accept and treat wastewater from fracking operations.

"It would have to be a sewage treatment plant with an approved pretreatment process with a permit from the EPA," Martens said. "There are a limited number of facilities that have treated wastes in the past that are probably every bit as difficult to treat as the wastewater from [fracking]. I think it can be done, but could your average POTW in New York State do it? I think that's highly unlikely."

Under Cuomo's proposed budget, the DEC would receive $872.9 million during this fiscal year, which is $167.7 million, or $16.1% less, than it received during the previous fiscal year. Martens said $434 million of the total would go toward the DEC's operations and to maintain its current staff level of 2,983.

The SGEIS is to provide the framework for DEC's fracking permit process. 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. Paterson requested the SGEIS because the original impact statement was completed in 1992, before technological changes in shale development. In the closing days of his term Paterson extended the SGEIS deadline until July 1, 2011 (see Shale Daily, Dec. 14, 2010).

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