With the Appalachian Basin's Marcellus Shale drawing more interest from producers, the New York State Department of Environmental Conservation (DEC) on Friday initiated a public process to review its oil and natural gas regulations to include rules for horizontal gas drilling activities.

At the direction of Gov. David A. Paterson (see Daily GPI, July 24), DEC has begun work on a supplement to the department's generic environmental impact statement (GEIS), which guides the environmental review of New York's oil, gas and solution mining regulatory program. Specifically, the supplement would address the potential environmental impacts of horizontal gas drilling in the Marcellus Shale formation, which stretches from West Virginia to New York. Horizontal drilling has been used routinely in tight gas formations like the Marcellus Shale for about eight years; the GEIS was issued in 1992, DEC noted.

While the supplemental GEIS is considered, any entity that applies for a drilling permit for horizontal drilling in the Marcellus Shale and opts to proceed with its permit application would be required to undertake an individual, site-specific environmental review, the DEC said. The review would have to take into account the same issues being considered in the supplemental GEIS process and would have to be consistent with the requirements of State Environmental Quality Review Act and the state Environmental Conservation Law. Four drilling applications have been filed by companies at this point, DEC said.

"New York State is committed to working with the public and local governments to make sure that if drilling in the Marcellus Shale goes forward, it happens in the most environmentally responsible way possible," DEC Commissioner Pete Grannis said.

The supplemental GEIS would address potential adverse impacts resulting primarily from the large volumes of water needed to hydraulically fracture the shale. These potential impacts relate to both the sources of water and any additives used to facilitate fracturing, and the recovery, handling and disposal of water during and after drilling concludes, the DEC stated. In its review, DEC also plans to evaluate the "full range of other environmental impacts that may result from this drilling activity."

By the end of this summer, DEC expects to make a draft scoping document made available for public review and comment. To that end, DEC is planning a series of public hearings beginning in September across the Southern Tier of the state and in the Catskills. A draft Supplemental GEIS is expected to be ready for public review by early next year, DEC said.

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