NEW YORK SETS RULES ON UPSTATE GAS DRILLING NEAR CITY'S WATER - NEW YORK TIMES

http://www.nytimes.com/2009/10/01/nyregion/01drill.html

After months of deliberations, state environmental regulators on Wednesday released long-awaited rules governing natural gas production in upstate New York, including provisions to oversee drilling operations near New York City’s water supplies.

The regulations, in a report requested last year by Gov. David A. Paterson, do not ban drilling near the watersheds, as many environmental advocates had urged. But the report sets strict rules on where wells can be drilled and requires companies to disclose the chemicals they use.

The prospect of gas drilling in upstate New York has stirred strong opposition from a coalition of environmental groups, city politicians and residents, who fear that expansive operations of this sort could contaminate the city’s drinking water. But it has gained firm supporters upstate who say the economic benefits of a new gas boom far outweigh any potential risks, especially given the weakness of the economy.

The gas industry has argued that vast gas reserves could be found in the Marcellus Shale basin, which extends for roughly 600 miles through Virginia, Ohio, Pennsylvania and New York.

The million-acre watershed supplies 15 million people, including 9 million New Yorkers. The Department of Environmental Conservation, which issued the preliminary guidelines, said that it found no reasonable basis for a drilling ban near the watershed, but that measures were necessary to allay concerns raised last year in public hearings.

Under the new rules, for example, drillers would be required to disclose the chemical fluids used for each well. Buffer zones would be created around reservoirs and aqueducts in the watershed. Wells drilled within a 1,000-foot corridor of underground tunnels that carry drinking water to New York City would require special approval, and in some cases, state inspectors would have to be present during some phases of operations.

The proposals will be open for public comment until Nov. 30, said Yancey Roy, a spokesman for the agency. State regulators will release their final report sometime next year, which will open the door for drilling permits to be issued.

Some critics of drilling said that they recognized that the regulators had made an effort to address some of their concerns and that drillers would have to comply with more stringent rules in New York than in other parts of the country. Still, they expressed some dissatisfaction.

“We need to have a zero-risk policy here, and it is not appropriate to allow drilling in such a unique and extraordinarily valuable resource,” said Kate Sinding, a senior attorney at the Natural Resources Defense Council. “The record in other states is so abysmal, and it doesn’t take much to do better than other states.”

About 8.5 percent of the Marcellus Shale within the state of New York is located under the New York City watershed, Ms. Sinding said.

The Manhattan Borough President, Scott M. Stringer, said the protections outlined did not go far enough and could expose the city to billions of dollars of expenses if it needed to invest in water filtration plants to counter contamination.

“A buffer zone is not a ban,” he said. “Quite frankly, a lot of these are half-baked measures that put the watershed at risk.”

Mr. Stringer said that he was asking that the public comment period be extended to at least 90 days and that he had secured a commitment from both Mr. Paterson and the state environmental department’s commissioner, Pete Grannis, that a hearing on the proposed rules would be held in New York City.

Geologists have long known about the Marcellus Shale and its abundant gas reserves, but until recently there was no way to extract the fuel in an economical way.

That changed several years ago when operators figured out a way to merge two technologies: horizontal drilling and hydraulic fracturing. Because wells have been drilled horizontally, sometimes for miles, operators can now gain access to pockets of gas that would have been unreachable. High-pressure water mixed with chemicals is then injected into the wells to break the shale and allow natural gas to flow out.

Some geologists estimate that the Marcellus basin holds an estimated 500 trillion cubic feet of gas, of which 50 trillion cubic feet could be recovered. That would be enough to meet the nation’s needs for about two years.

There are already about 13,000 active oil and gas wells in New York, about half of them already using hydraulic fracturing. In drilling through shale, a great deal more water is needed to crack the rocks. While a conventional well requires using about 80,000 to 100,000 gallons of water, shale rocks require anywhere between three million to five million gallons per well.

By JAD MOUAWAD. Mireya Navarro contributed reporting.

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