Bloomberg News

New York Will Probably Restart Review Process on Fracking

October 01, 2012

New York Will Probably Restart Review Process on Gas Fracking

Andrew Cuomo, a 54-year-old Democrat who has been mentioned as a potential presidential candidate in 2016, has been under pressure from energy companies and some localities to allow drilling to encourage the type of economic development seen in fracking states from Wyoming to Pennsylvania. Photographer: Matthew Staver/Bloomberg

New York will probably miss a deadline to develop fracking regulations, requiring the state to begin all over again and delaying indefinitely a decision on whether to allow the natural-gas drilling, officials said.

Governor Andrew Cuomo’s administration has until Nov. 29 to decide if it will allow hydraulic fracturing and to develop regulations. Missing the deadline would require the state to draft new rules and reopen a window for public comment.

On Sept. 20, Department of Environmental Conservation Commissioner Joseph Martens said a final decision on allowing fracking would be delayed to allow a review by Health Commissioner Nirav Shah. In a telephone interview today, Martens said it’s not clear how long that will take.

“We are working with the Department of Health right now on questions like the scope of the health review, and we haven’t made any decisions on whether or not we’ll meet the deadline for the regulations,” Martens said today. “If we complete the process, we’ll finalize the regulations. It really depends on the timetable for the health review.”

In an earlier e-mailed statement, Emily DeSantis, a DEC spokeswoman, said it’s probable that the health review will cause the state to miss the Nov. 29 deadline.

Under Pressure

New York has been studying fracking for more than four years and issued a moratorium in 2010. Cuomo, a 54-year-old Democrat who has been mentioned as a potential presidential candidate in 2016, has been under pressure from energy companies and some localities to allow drilling to encourage the type of economic development seen in fracking states from Wyoming to Pennsylvania. About 80,000 messages were sent to the DEC during the last comment period as environmental groups staged protests.

It may already be too late for New York to cash in on the boom that led natural-gas companies to spend $20 billion on leases, drilling rigs and royalty payments in Pennsylvania from 2008 to 2010, and the $5 billion in additional economic output that Ohio is forecast to get by 2014.

Since New York began developing gas-drilling rules in July 2008, natural-gas prices have plunged by about 80 percent. Talisman Energy Inc., (TLM) a Calgary-based company that has about 250,000 acres under lease in New York, has said it’s unlikely to be an active driller in the state until prices rebound.

Marcellus Shale

Fracking, in which millions of gallons of chemically treated water and sand are forced underground to break up shale and free trapped gas, has been blamed for damaging water sources. The federal Environmental Protection Agency is studying the effects on drinking water.

New York sits on the northern edge of the Marcellus Shale, which may contain 490 trillion cubic feet of gas, enough to supply the U.S. for two decades, according to Terry Engelder, professor of geosciences at Pennsylvania State University in University Park. The U.S. Energy Department said the formation may hold 141 trillion cubic feet, enough to meet U.S. demand for about six years.

Fracking already has been banned in more than 20 New York towns, according to Karen Edelstein, a geographic information- systems consultant in Ithaca. Anschutz Exploration Corp. and Cooperstown Holstein Corp., a dairy farm, have appealed decisions by New York judges that upheld two bans on oil and gas drilling.

Cuomo has said local governments should maintain the right to block drilling.

To contact the reporters on this story: Freeman Klopott in Albany, New York, at fklopott@bloomberg.net; Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net


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