Federal officials have won permission from a district judge to intervene in a New York lawsuit that would compel a full environmental review of the impact of natural gas drilling in the Delaware River Basin before proposed regulations for Marcellus Shale development are completed.

New York Attorney General Eric T. Schneiderman in May sued 10 federal agencies, including the U.S. Army Corps of Engineers, to require the Delaware River Basin Commission (DRBC) to conduct an environmental review before proposing regulations that, if enacted, would allow water from the basin to be used for shale gas development (see Shale Daily, Dec. 10, 2010). Representatives of the Army Corps and the governors of the four states served by the basin — New York, New Jersey, Delaware and Pennsylvania — are members of the DRBC.

Early this month the federal government asked that the lawsuit, filed in U.S. District Court for the Eastern District of New York, be dismissed (see Shale Daily, Aug. 4). Federal officials argued that New York could not prove injury and did not have the right to sue federal agencies.

In his ruling Wednesday U.S. District Judge Nicholas G. Garaufis agreed. The United States may intervene because of “constitutional issues,” he wrote. “It’s regulatory. It’s statutory. It’s quite a mix of arguments.”

Industry groups also may file briefs while they seek more formal status to intervene, said the judge. The American Petroleum Institute, the Independent Petroleum Association of America and the U.S. Oil & Gas Association asked to intervene to support the federal government’s contention that New York authorities could not prove injurious to their members. Gas development in New York could be halted “for many years to come,” they said in court papers.

“Very substantial natural gas development activity is anticipated in the basin once new rules are issued by DRBC,” the industry groups’ stated in their briefs. The National Park Service and the U.S. Fish and Wildlife Service, among the 10 groups sued by the New York attorney general, have in the past supported New York’s positions on gas drilling, which makes the trade groups’ participation even more important to protect companies and their investments, said the briefs.

A separate lawsuit was filed last week against the DRBC in the New York district court by a coalition of environmental groups (see Shale Daily, Aug. 8). That case will be consolidated with the New York attorney general case, the judge ruled. Meanwhile, the Damascus Citizens for Sustainability also was expected to file a lawsuit to delay DRBC’s rulemaking process.