Several key supporters of shale development in New York say the state Department of Environmental Conservation’s (DEC) proposed rules governing high-volume hydraulic fracturing (fracking) are too restrictive and in their current form would drive operators to other states.

The calls for more liberal regulation come as the DEC ended its comment period last Wednesday on the revised supplemental general environmental impact statement (SGEIS) on fracking.

Thomas West, an attorney for The West Firm pllc in Albany, NY, which representing oil and gas companies in the state, told NGI that he assisted the Independent Oil & Gas Association of New York (IOGA) and various operators on submitting comments to the DEC. Many of the DEC’s proposals are “very unworkable,” he said.

“The agency has probably overreacted and gone too far in terms of some of the proposed mitigation measures,” West said, citing well setbacks, testing requirements and the prohibition of drilling in primary and principal aquifers as examples. “We think there are compromises they can adopt that will be just as safe and protective of the environment without making New York noncompetitive.”

In a letter to the DEC IOGA called the proposed regulations “restrictive, inequitable and unjustified.” Marcellus Shale Coalition (MSC) President Kathryn Klaber echoed that sentiment in a separate letter.

“The MSC has carefully reviewed the proposed [SGEIS rules] and determined that significant barriers to entry would discourage both operating and service companies from establishing significant operations in New York state,” Klaber said. “These barriers are created through increased regulatory burdens, uncertainty on the timing of permits and increased capital costs.”

Michael Doyle, executive director of the New York State Petroleum Council, a division of the American Petroleum Institute, called for an end to the de facto moratorium on fracking in the state.

“Ending the moratorium would allow New York to lead the way in the responsible development of shale oil and natural gas energy and fully attain the job creation potential of the Marcellus Shale,” Doyle said, adding that hundreds — perhaps thousands — of oil and gas wells have been drilled for several decades in the Jamestown Aquifer without any significant environmental impacts. “This end of the comment period should mark the beginning of job creation and economic growth through hydraulic fracturing.”

Dan Whitten, spokesman for America’s Natural Gas Alliance, told NGI that the organization was also hopeful New York would move forward and permit fracking.

“We hope that the state of New York will account for the many benefits natural gas can bring to its economy and the environment, and advance an appropriate regime that enables New Yorkers to take advantage of those benefits,” Whitten said. “In doing so, it can recognize attributes that natural gas brings, which the Obama administration clearly highlighted just this week in a paper on advancing our nation’s economic recovery [see related story].”

Hundreds of land and business owners across New York also submitted comments to the DEC before the deadline. The agency received a record 20,800 public comments by Jan. 9, but many more had not been counted yet. Although the SGEIS is to provide the framework for DEC’s fracking permit process, state lawmakers are reportedly considering separate measures extending the moratorium on fracking until June 1, 2013 and enacting “home rule” legislation that would give municipalities the power to ban fracking in their communities (see related story).

“It’s worse than a moratorium,” West said of the home rule bill, A3245. “A moratorium is just a temporary ban while you put regulations in place. But empowering a municipality goes well beyond that. It will have a very chilling, if not damning, effect on the investment in the state.”

West is representing Anschutz Exploration Corp. in its legal challenge against the Town of Dryden, one of two high-profile lawsuits in New York pitting operators against municipalities. The other lawsuit involves the Town of Middlefield (see NGI, Sept. 26, 2011; Sept. 19, 2011).

“If the legislature empowers municipalities to ban drilling, nobody in their right mind is going to invest in New York,” West said. “You can’t just turn over the reins to a five-member town board and say they can decide whether or not these resources should be developed. It’s not consistent with sound oil and gas law policy or with national security.”

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