New Jersey officials have told the Delaware River Basin Commission (DRBC) that the state might withhold its dues to the organization if it doesn't enact rules governing hydraulic fracturing (fracking) within the Delaware River Basin by its next meeting in September.

New Jersey Department of Environmental Protection (NJDEP) spokesman Larry Ragonese confirmed that John Plonski -- NJDEP's assistant commissioner for water resources management and the state's representative to the DRBC -- had warned the organization at two previous meetings that New Jersey was reserving the right to review its quarterly payment to the DRBC if fracking regulations were not adopted by the Sept. 21 meeting.

"We're not at war in any way with the DRBC," Ragonese told NGI's Shale Daily on Monday. "In fact, our dialogue with them is wide open and we have regular discussions with them on these issues. It's kind of a push on our part. It's not a flat out ultimatum; it's just a little bit of an encouragement. We have been encouraging them to adopt rules that would protect the water supply and the environment in the Delaware River Basin."

Ragonese said the NJDEP was still calling for the DRBC to implement what is essentially a fracking pilot program, where the DRBC would enact fracking rules and have ultimate oversight in the approval process for natural gas wells in the river basin. But the DRBC would permit no more than 30 wells pads and 300 wells within the first two years of the new rules (see Shale Daily, April 20). NJDEP Commissioner Bob Martin presented the idea to the DRBC on April 15.

"We remain dues paying members," Ragonese said. "The DRBC is important to the [NJDEP], and the rules they enact will be important to us. We really would like the rules in place to protect our environment. We don't want this to be some open ended process where there are no rules and it goes on for years. Government gets criticized on a regular basis for not moving quickly or expeditiously."

The DRBC is led by the governors of Delaware, New Jersey, New York and Pennsylvania. The commander of the U.S. Army Corps of Engineers' North Atlantic division is also a commission member.

According to the compact creating the DRBC, New Jersey and Pennsylvania are to each contribute 25% of the organization's budget, which comes out to $893,000 apiece. New York is to contribute 17.5% ($626,000), Delaware 12.5% ($447,000) and the federal government the remaining 20% ($715,000).

DRBC spokeswoman Katherine O'Hara told NGI's Shale Daily that the federal government has only paid its share once -- in 2009 -- since 1996, and the resulting shortfall now officially totals more than $8.5 million. She said New York has also decided to only contribute $355,000 -- about 57% -- of its share for the current fiscal year (FY).

"Next year obviously remains to be seen, but we don't anticipate any additional funding from New York for this fiscal year," O'Hara said Monday, adding that Pennsylvania, Delaware and New Jersey have paid their dues in full.

The expense budget for the DRBC for FY 2012 totals $5,660,900.

Ragonese said New Jersey pays its dues quarterly. Asked if the state intends to either delay or outright cancel its next payment to the DRBC if rules aren't enacted, he said, "It would depend. I can't answer that question at this point. If the DRBC told us they needed another month or two, that they needed additional facts and information, we would of course consider that."

Jeff Tittel, chapter director for the New Jersey Sierra Club, said New Jersey's actions amounted to extortion.

"It's a threat and it undercuts due process," Tittel told NGI's Shale Daily on Monday. "[The NJDEP] is more interested in appeasing the gas drillers in Pennsylvania than protecting the water supply for the people in New Jersey."

Tittel said his group fears that the DRBC is being pushed to enact the NJDEP's 30-pad/300-well proposal -- which he called "relatively weak" -- or perhaps a similar one, and was critical of such a plan being enacted before the results of a fracking study being performed by the U.S. Environmental Protection Agency (EPA) are released (see Shale Daily, Feb. 22).

"They want to have these rules in place before the EPA study is done," Tittel said. "They want to pass rules and permit first and then do the science later. That doesn't make any sense. It's much harder to fix a rule after it's already been adopted than it is before it's adopted. They're rushing into this before we really know all of the science and the potential impacts."

Ragonese dismissed the NJDEP's critics on the issue.

"It's always interesting how people would like to misconstrue what we're doing," Ragonese said. "Some opponents to fracking have come out and criticized us saying we're just trying to get these rules in place so we can encourage fracking because we're in partners with industry."

Last year the DRBC voted to impose a moratorium on new well pad permits in the 13,539-square-mile basin, and in December proposed amending regulations over wastewater, well pad siting and water sources for natural gas development (see Shale Daily, March 4; Dec. 10, 2010). The new rules being considered are expected to allow drilling to resume, but under more oversight.

The DRBC received thousands of public comments on the proposed rule changes (see Shale Daily, April 18).

New York State Attorney General Eric Schneiderman filed suit against the federal agencies represented at the DRBC on May 31 for not conducting an environmental impact study on new shale gas drilling in the basin (see Shale Daily, June 1). The lawsuit was filed in U.S. District Court for the New York Eastern District.

The New Jersey legislature passed a bill on June 29 that bans fracking in the state (see Shale Daily, July 5), a symbolic move in a state with no current or planned drilling. It remains unclear if Republican Gov. Chris Christie will sign the bill or return it to the legislature for changes, namely a five-year ban instead of a permanent one (see Shale Daily, July 6).