Written by Chloe Marie – Research Fellow
The Global Shale Law Compendium series addresses legal developments and other issues related to the governance of shale oil and gas activities in various countries and regions of the world. In this article, we will focus to legal, policy, and governance issues related to shale gas development in the United States, and more specifically in the state of New York.
High-volume hydraulic fracturing for shale gas development has long been – and still is – a topic of much controversy in the State of New York. Ultimately, governmental concerns about the potential environmental and public health impacts of such technique caused the state to permanently ban shale gas development in June 2015 after years of public discussions. Years before the permanent ban was established, the New York Department of Environmental Conservation (NY DEC), responsible for regulating the development of oil and gas resources within the state, received some exploratory well drilling applications for shale gas development. Though these permit applications were filed in 2008 and 2009, DEC did not grant any permits prior to the commencement of the ban.
Hydraulic fracturing had been utilized in New York for conventional and tight gas reservoirs in accordance with the Generic Environmental Impact Statement (GEIS) for Oil, Gas and Solution Mining Regulatory Program promulgated by NY DEC in 1992. The use of high-volume methods for shale gas exploration and production purposes in other states raised questions about the sufficiency of the GEIS for modern shale development. Thus, in order to address this technique and its potential related impacts, NY DEC decided in 2008 to develop a Supplemental Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program (SGEIS) and to review the well permit issuance process for horizontal drilling and high-volume hydraulic fracturing. The purpose of the SGEIS was to identify and assess the effects of any actions taken by a state agency or local government on the environment under the State Environmental Quality Review Act (SEQRA).
In February 2009, NY DEC released the Final Scope of the Draft SGEIS and issued, in September 2009, the Draft SGEIS for public review. Public hearings were held in New York City, the Catskills, and the Southern Tier throughout October and November 2009.
Interestingly, on November 29, 2010, the New York State Assembly passed Senate Bill No. 8129 suspending hydraulic fracturing for the extraction of natural gas or oil until May 15, 2011, as well as suspending the issuance of new permits for such drilling. Former Governor David Paterson, however, vetoed the bill on December 13, 2010 and instead signed Executive Order No. 41 on the same day. This Executive Order declared that “there is a need for further study of this new [high-volume hydraulic fracturing] technology prior to deployment in New York State” and directed the Commissioner of Environmental Conservation to publish a Revised Draft SGEIS on or about June 1, 2011. The Executive Order further declared that no permits were to be approved before the SGEIS became final. On January 1, 2011, Governor Andrew Cuomo signed Executive Order No. 2 continuing Executive Order No. 41.
On September 7, 2011, NY DEC issued a Revised Draft SGEIS for public comment highlighting the development and changes of the high-volume hydraulic fracturing technique since the release of the 2009 Draft SGEIS. At around the same time, in October 2011, NY DEC also introduced a draft of the proposed hydraulic fracturing regulations. Some important aspects of this rule included a ban on the use of high-volume hydraulic fracturing in the New York City and Syracuse watersheds and within primary aquifers as well as more stringent regulatory procedures to obtain approvals to drill on private lands. With the issuance of the Revised Draft SGEIS and proposed regulations, it appeared that New York eventually would allow for the use of hydraulic fracturing in modern shale development. Approximately one year later, however, the regulatory process moved in a different direction.
In September 2012, NY DEC Commissioner, Joe Martens, asked the New York State Department of Health (NY DOH) to carry out a review of the Revised Draft SGEIS in order to further discuss the impacts of high-volume hydraulic fracturing on public health. In a Public Health Review study dated December 17, 2014, Acting NY DOH Commissioner Howard Zucker raised some concerns regarding the availability of scientific information on the relationship between high-volume hydraulic fracturing environmental impacts and public health. He stated that “the overall weight of evidence from the cumulative body of information contained in this Public Health Review demonstrates that there are significant uncertainties about the kinds of adverse health outcomes that may be associated with [high-volume hydraulic fracturing], the likelihood of the occurrence of adverse health outcomes, and the effectiveness of some of the mitigation measures in reducing or preventing environmental impacts which could adversely affect public health.” Therefore, the Commissioner recommended that high-volume hydraulic fracturing “should not proceed” in the State of New York.
Based upon the recommendation in the NY DOH Public Health Review, NY DEC, on May 13, 2015, published and presented to the public the Final SGEIS on the Oil, Gas and Solution Mining Regulatory Program for high-volume hydraulic fracturing. The Final SGEIS is divided into two parts: Volume 1 relating to the Final SGEIS itself and Volume 2 relating to the Response to Comments. The Final SGEIS also incorporates the NY DOH Public Health Review. In a Press Release dated the same day, Commissioner Martens declared that NY DEC “considered materials from numerous sources, including scientific studies, academic research and public comments, and evaluated the effectiveness of potential mitigation measures to protect New York’s valuable natural resources and the health of residents” before adding that he would utilize the Final SGEIS as the basis for preparing his formal Findings Statement.
NY DEC Commissioner Martens issued the Findings Statement in June 2015, concluding that “there are no feasible or prudent alternatives that would adequately avoid or minimize adverse environmental impacts and that address the scientific uncertainties and risks to public health from this activity.” Thus, he declared that “the Department’s chosen alternative to prohibit high-volume hydraulic fracturing is the best alternative based on the balance between protection of the environment and public health and economic and social considerations.” So long as this NY DEC determination remains in place, high-volume hydraulic fracturing cannot take place within New York.
Prior articles in the Global Shale Law Compendium series: