Friday, July 8, 2011

Expanded Natural Gas Development on New York's Horizon?

Following the discovery of techniques to extract natural gas from the enormous Marcellus Shale that underlies New York, Pennsylvania, West Virginia, Ohio, and small portions of other states in the area, states overlying the shale have taken very different approaches to developing this resource, which contains large quantities of natural gas.  (Geology professors in the region estimate that companies could recover 50 trillion cubic feet of gas from the shale.)  In 2008, companies drilled just 195 Marcellus wells in Pennsylvania, and by 2010 the number had exploded to 1,386 Marcellus wells.  New York, in contrast, has not yet allowed the temptation to "drill for dollars" to overcome its concerns about the environmental impacts of shale development. After several years of review, though, it appears that New York may soon be ready to jump into the gas bonanza. 

In 1992, New York's Department of Environmental Conservation completed a Generic Environmental Impact Statement under its State Environmental Quality Review Act.  This statement addressed the potential impacts of oil and gas well development in the state and concluded that issuing a standard permit to drill did not have a significant environmental impact, except in certain locations near parks, agriculture, and water.  As applications for a new type of gas extraction in shales emerged, however--extraction that often would require both vertical and horizontal drilling and large quantities of water--the Department in 2008 determined that the 1992 GEIS did not adequately address this new drilling and "high-volume" hydraulic fracturing technique.  So the DEC published a draft Supplemental Generic Environmental Impact Statement, which described the additional impacts of this technique and placed applications for horizontal drilling and high-volume fracturing on hold while reviewing these impacts.  Several additional actions solidified delays of high-volume hydraulic fracturing in New York.  New York's Assembly and Senate passed a temporary moratorium on new hydraulic fracturing for natural gas, which then-Governor Paterson did not sign.  Governor Paterson did, however, place a moratorium on high-volume horizontal hydraulic fracturing, which lasted through at least July 1, 2011. 

On July 1, the DEC issued an executive summary of its preliminary revised Draft Supplemental Generic Environmental Impact Statement (SGEIS) for high-volume hydraulic fracturing.  Under this revised statement, high-volume hydraulic fracturing will not be permitted in New York's unfiltered water supply watersheds, "reforestation areas, wildlife management areas, state parks, and 'primary' aquifers," and certain other "setback and buffer areas."  As the executive summary reminds readers, natural gas drilling also already was prohibited in "Forest Preserve land in the Adirondacks and Catskills" because of Article XIV, Section 1 of the New York State Constitution, which provides: "The lands of the state, now owned or hereafter acquired, constituting the forest preserve as now fixed by law, shall be forever kept as wild forest lands." 

Under the preliminary revised SGEIS, in the parts of New York where high-volume fracturing will be allowed, site-specific environmental review will be required for gas wells that are drilled within a certain distance of water resources, for shallow wells, and for wells that require water withdrawals that are inconsistent with certain passby flows.  The revised SGEIS, according to the recently released executive summary, also proposes to require disclosure of all chemical additives anticipated to be used in fracturing to the DEC, and the DEC reports that it will continue to disclose to the public the chemical additives used in fracturing, with the exception of those that are trade secrets.  It appears that the DEC will not disclose the chemicals used in each well but rather will continue to publish a general list of fracturing chemicals used throughout New York; this is not entirely clear from the preliminary revised SGEIS, however.  The DEC also proposes to require better casing of gas wells to prevent gas and other substances that flow from the well from mixing with other underground substances, including water; secondary containment structures to catch spills when fracturing chemicals are transferred; approved plans for flowback (wastewater) disposal from fracturing prior to commencing the fracturing operation; a "greenhouse gas emission impacts mitigation plan"; and "Best Management Practices for surface disturbance," among other mitigation measures.

The New York Times reported last week that Governor Cuomo will support fracturing in New York, although few other reports have confirmed this.  From the recent DEC developments, however, it appears that the state is continuing to move slowly toward allowing high-volume hydraulic fracturing--with regulatory controls that exceed those applied to other gas wells in the state. 

-Hannah Wiseman

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