Shortly after taking office, the incoming administration of Governor-elect Andrew Cuomo and his choice for Commissioner of the Department of Environmental Conservation (“DEC”) will have to address a controversial issue that has significant implications for the State’s economy, energy use and the environment. The issue is the use of high-volume hydraulic fracturing, (also known as “hydro-fracking” or simply “fracking”), an emerging technique for drilling underground wells to recover natural gas.
High-volume hydro-fracking involves the high-pressure injection of a mixture of water, sand and a cocktail of chemicals to release gas deposits from underground shale. The method is considered efficient and cost-effective but has raised concerns about the release of chemicals to groundwater and the potential for adverse effects on drinking water sources. This is a significant issue because of efforts by the oil and gas industry to withdraw natural gas from huge deposits in the Marcellus Shale, an underground formation which underlies parts of southern and western New York State, as well as Pennsylvania and West Virginia. Drilling a well to recover natural gas from underground deposits in New York requires a permit from DEC.
Low-volume hydraulic fracturing has been in use for many years and DEC created a permit program in the early 1990’s. In order to comply with the requirements of the State Environmental Quality Review Act (“SEQR”), DEC issued a Generic Environmental Impact Statement (“GEIS”) in connection with the permitting program in 1992. The advent of high-volume hydro-fracking and its potential for use in the Marcellus Shale caused a considerable increase in well permit applications but, at the same time, brought about significant objections from environmental advocacy and community groups. In 2008, Governor Paterson directed DEC to update the GEIS “to ensure that any new technologies deployed in New York State are first thoroughly analyzed and regulated to ensure that all environmental and public health impacts are mitigated or avoided.” DEC issued a draft Supplemental GEIS and accepted public comments during 2009–there were over 13,000 written comments.
The controversy has been particularly concentrated on the use of horizontal high-volume wells. These wells are considered more efficient, but potentially create greater environmental risk than vertical wells. The issue intensified to the point that the State Legislature passed a moratorium, prohibiting DEC from issuing new drilling permits for hydro-fracking until May 15, 2011.
On December 13, Governor Paterson vetoed the legislation and issued an Executive Order instituting a moratorium on permits for horizontal wells. The length of the moratorium is indefinite, but it cannot expire before July 1, 2011. DEC may continue to issue permits for vertical wells during this period. The Executive Order directs DEC to complete review of the public comments and revise the draft Supplemental GEIS by June 1, 2011, accept public comment on the revised draft for a minimum of 30 days and then “report to the Governor.” Under the Executive Order, no permits for horizontal wells may be issued until after issuance of Final Supplemental GEIS.
The Executive Order has been criticized by oil and gas industry representatives because of the extended moratorium. At the same time, it has been criticized by environmental advocacy organizations because of the exemption for vertical wells. With Governor Paterson leaving office January 1, the issue will be left to Governor-elect Cuomo and his new management team at DEC to address. Will the new Governor rescind or modify the Executive Order, allow it to continue in effect, or take a completely different direction?
We will continue to monitor developments on this issue.