Shale Daily / NGI All News Access

Critics Hit Shrinkage of New York's Permitting Staff

The former chief of the New York Department of Conservation (DEC), whose ouster in October was criticized by producers and environmental groups alike, told state lawmakers last week that massive cutbacks in commission staff have become a "shell game" that didn't take into account the consequences for stakeholders.

Alexander "Pete" Grannis was fired in October by outgoing Gov. David Paterson after an unsigned memo on DEC stationery was leaked that criticized sweeping staff cuts (see Shale Daily, Oct. 27). Paterson's office had instructed the DEC to cut 209 workers by the end of this year. If the staff cuts occur, the DEC will have lost 849 full-time employees since April 2008, when it had 3,775 full-time staff members. Grannis has denied that he leaked the memo.

Testifying before the New York Assembly Environmental Conservation Committee earlier this month, Grannis, himself a former Democratic assemblyman from Manhattan, said decisions about DEC staff reductions "were made by people who had never worked in the agency."

Grannis was appointed DEC chief in 2007 by former Gov. Eliot Spitzer.

"The risk is backsliding on the gains we've made in the last decade, on clean water, clean air, cleaning up land, and working out a much more collegial relationship with the regulated community we deal with," Grannis said.

His testimony was echoed by several producers, including John Holko, president of Lenape Resources and a board member of the Independent Oil and Gas Association of New York (IOGA of NY). He said the DEC needs more staff, not less, to adequately administer permitting and enforcement.

"IOGA of NY believes the state could, and should, generate enough in permit fee revenue to immediately retain existing field inspectors and employ dozens of new inspectors if permitting and drilling is expedited and allowed in the Marcellus Shale formation," Holko said.

"Proposed staff reductions at DEC simply cannot be allowed to occur, because additional loss of regulators will have an adverse effect on the economy, our reputation as an industry, and our acceptance."

In any case, permitting new gas wells in the Marcellus Shale has been on hold since 2008, pending the completion of the Supplemental Generic Environmental Impact Statement (SGEIS), which would guide the permitting process going forward. A final version of the revised document, which has been under review since July 2008, is scheduled to be completed in May.

Although he is no longer in charge of the DEC, Grannis told the committee that the review would be completed correctly.

"In this case we have the advantage of being able to say we're not going to move ahead until we've got it right," Grannis said. "We can't do as much work with a lot fewer people...The work will continue but it will take longer to complete that task."

Acting Commissioner Peter Iwanowicz also testified that staff cuts would impact DEC's regulatory oversight. However, he agreed that the reductions were necessary because of state budget problems.

"It is important for us to keep in mind that our decisions going forward must be made in the context of the state's overall financial condition," Iwanowicz said. In agreement with Grannis, he said the SGEIS review wouldn't be impacted by layoffs.

If drilling in the Marcellus Shale is expanded, DEC would need more resources to monitor the process and issue drilling permits, Iwanowicz told the committee.

"We'll be able to issue permits and monitor the drilling with the amount of resources we have," Iwanowicz said. "We'd like to have more resources and staff to be able to do that. If we don't, then we anticipate less drilling will happen."

Budget and staffing decisions have to take into account the state's overall financial condition, noted Iwanowicz. New York faces a $315 million shortfall or more in the current fiscal year and a projected $9.2 billion deficit for the fiscal year that begins April 1.

"The reality is that New York simply will not be able to continue delivering the same level of services," he said.

Another reality faces producers beginning Jan. 1. Following the Nov. 2 election, Gov.-elect Andrew Cuomo signaled that he may not approve the use of hydraulic fracturing (hydrofracking) in the Marcellus Shale until "bona fide studies" indicate that it can be done safely.

"If it were safe, if the watersheds were protected and it would create jobs, great," Cuomo, a Democrat, said during an interview with the John Gambling Show on the radio station WOR. "But you need the facts. And we don't have the facts...We have a lot of emotion, but we don't have the facts. And I would not do anything until the facts are determined by bona fide studies."

The exploration community also faces scrutiny from Attorney General-elect Eric Schneiderman, a Democrat who defeated gas drilling supporter Dan Donovan. Schneiderman earlier this month said he would file a lawsuit to stop drillers from hydrofracking wells until the "process is proven safe." He also vowed to go after energy companies that don't comply with the state's laws.

"As attorney general I will build on the strong Cuomo environmental record and ensure that the office's environmental bureau remains active and engaged to investigate and protect our water supply," Schneiderman stated. "Neither the state nor the federal government has determined that hydrofracking is a safe practice, and I will sue to make sure that no drilling takes place until those determinations have been made."

Environmental groups also have indicated that they may challenge a revamped SGEIS if it recommends that gas drilling be allowed. Defending the SGEIS likely would fall to the attorney general's office.

"If the DEC comes out with the SGEIS, it's a state document," said attorney Scott Kurkoski, who represents the Joint Landowners Coalition of New York. "If that state document is attacked, it will be his job to defend it...His stance is somewhat concerning, but the residents of the state put a lot of trust in the attorney general, and whoever is in that position will have to fulfill those duties."

Landowners also are revving up protests across the state. A petition containing more than 3,000 signatures that asks for a moratorium on gas drilling in New York's Afton, Coventry and Bainbridge areas was delivered to the Chenango County, NY, Board of Supervisors earlier this month.

According to R.C. Woodford, who is the board's clerk, the petition asked individuals to agree that gas drilling should be prohibited because of "the great harm it would cause to our environment, our health and our property," and to protest gas leases allegedly obtained "by the gas companies' dishonesty, either by telling lies, lies by omission, deceit and/or coercion to get people to sign contracts."

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