Energy Law Update: New York Proposes More Stringent Regulations for Marcellus Shale Drilling
On October 1, 2009, the State of New York released its long-awaited and heavily anticipated supplemental general environmental impact statement (SGEIS) related to the use of hydraulic fracing and the drilling of horizontal wells in New York for natural gas exploration. The extensive document which numbers in the hundreds of pages is now subject to a public comment period before final review and release by the state.
The primary factors driving the development of the SGEIS appear to be: (1) concerns regarding the amount of water which will be required in operations; (2) possible impacts to groundwater sources which may directly impact the water sources for New York City: and (3) the growing footprint of Marcellus sites.
New York's specific concerns regarding potential groundwater contamination from the fracing process and horizontal wells can be seen in the requirements regarding the identification and provision of notice to owners of drinking water wells and sampling of wells in some instances throughout the entire drilling process. For example, private residential drinking water wells within 1,000 feet of a proposed drill site must be tested prior to drilling and monitored during the duration of the project, assuming consent by the owner. If there is no residential well within 1,000 feet or the owner of a well does not consent to the sampling, then there is a review of residential water wells located within 2,000 feet of the well site.
New York will require the identification of the contents of frac fluid and, in some instances, the concentrations of the various elements of the fluid - highlighting continuing concerns regarding potential groundwater and surface water contamination. It has also developed a new "Pre Frac Checklist and Certification Form" to ensure technical compliance with the permit and provide information regarding the final well-bore construction.
As in Pennsylvania, New York will require operators to perform a stream flow analysis detailing water withdrawal plans. Wells located within the Delaware and Susquehanna River basins will be subject to additional protocols pursuant to their own river basin commission rules.
With regard to fracing related water contamination, the SGEIS specifically states that there are no known instances of contamination resulting from the fracing process in New York and that the possible contamination of water sources is not considered high. Also, the report clearly puts forth the facts that the development of the Marcellus shale is important to New York's economy and its ability to provide energy to its citizens.
It will be important for the industry to digest the contents of the report in full and providing comments will be key to protecting the industry's interests. The SGEIS is available in pdf form on the New York DEC website at
http://www.dec.ny.gov/energy/58440.html. The public comment period ends on November 30, 2009.
Armando Benincasa
Chase Tower - Eighth Floor
707 Virginia Street E.
Charleston, WV 25301
304.353.8147
armando.benincasa@steptoe-johnson.com
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