Extraction of natural gas from New York State’s Marcellus shale formation came closer to reality last week when the New York State Department of Environmental Conservation (“NYSDEC”) issued a preliminary revised Draft of its Supplemental Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program (the “Revised dSGEIS”). This Revised dSGEIS was issued nearly two years (and 13,000 public comments) after NYSDEC had published an initial draft Supplemental Generic Environmental Impact Statement on September 30, 2009 (“the 2009 dSGEIS”). The Revised dSGEIS provides NYSDEC’s latest thinking on the requirements that it will impose to mitigate the potential environmental impacts of high-volume hydraulic fracturing (also known as hydrofracking) in the Marcellus and Utica shales. If and when NYSDEC’s recommendations are finalized in a Final SGEIS, nearly 85% of New York State’s shale reserves would become eligible for natural gas extraction. This alert discusses the Revised dSGEIS and DEC’s likely path forward.
NYSDEC may be ready to issue permits as soon as 2012
The Revised dSGEIS is called “preliminary” because it does not include several sections (e.g., socioeconomics) that are being prepared by outside contractors. These are expected to be available by the end of July.
Once NYSDEC has deemed the Revised dSGEIS complete, the agency will initiate a 60-day public comment period. In a June 30, 2011 press release announcing the Revised dSGEIS, NYSDEC stated that it expects the public comment period to commence in August 2011. See June 30, 2011, NYSDEC Press Release, available at: http://www.dec.ny.gov/
Subsequently, NYSDEC will issue a Final SGEIS in which it will “address the comments and include summaries of the substantive comments received on both the 2009 dSGEIS and the Revised dSGEIS, along with the Department’s Responses.” See Revised dSGEIS, § 1.4.4, page 1-6. After the SGEIS is finalized, NYSDEC intends to promulgate regulations codifying its requirements, although it will begin issuing permits in advance of proposing and finalizing those regulations. Most observers do not expect the Final SGEIS to be issued until early 2012.
In addition, NYSDEC will create a High-Volume Hydraulic Fracturing Advisory Panel (“Panel”) comprised of outside environmental and industry experts and local government representatives. The Panel will be tasked with creating plans for “(1) oversight, monitoring, and enforcement; (2) measures to minimize socioeconomic and other impacts on local governments and communities; (3) a fee structure for drilling development; and (4) a mechanism for the funding of infrastructure improvements.” See June 30, 2011, NYSDEC Press Release, supra.
Prohibited areas and activities requiring site-specific assessments
The Revised dSGEIS would prohibit hydrofracking in specified areas in the State. The prohibited areas include:
- Any proposed well pad within the New York City and Syracuse watersheds;
- Any proposed well pad within a 4,000-foot buffer around the New York City and Syracuse watersheds;
- Any proposed well pad within a primary aquifer (subject to reconsideration two years after issuance of the first permit for high-volume hydraulic fracturing);
- Any proposed well pad within a 2,000-foot buffer around primary aquifers (subject to reconsideration two years after issuance of the first permit for high-volume hydraulic fracturing);
- Any proposed well pad within 2,000 feet of public water supply wells and reservoirs (subject to reconsideration three years after issuance of the first permit for high-volume hydraulic fracturing);
- Any proposed well pad within 500 feet of private drinking water wells or domestic use springs, unless waived by the owner; and
- Any proposed well pad within a 100-year floodplain.
Revised dSGEIS, Executive Summary, page ES-5. See also § 3.2.5, page 3-15.
Mandatory mitigation measures
The Revised dSGEIS notes that while many of the potential impacts resulting from hydrofracturing activities are mitigated through other existing regulatory programs, specific mitigation measures are warranted. The Revised dSGEIS sets forth a number of new measures including:
- Enhanced air pollution controls;
- Enhanced habitat conservation controls;
- Mandatory disclosure requirements for all chemicals, constituents, products, and/or additives used in the high-volume fracturing process, subject to appropriate protections for proprietary information; and
- Applicants will be required to have NYSDEC-approved plans for disposing of flowback water and production brine.
Nixon Peabody Marcellus Shale team
Nixon Peabody has assembled a team of energy, environmental, real estate, construction, and litigation lawyers; environmental scientists and engineers; and policy advisors to assist natural gas industry clients as they prepare for the opening of New York State’s Marcellus shale to development.