BREAKING NEWS: NY fracking policy faces do-over... DEC likely to reopen rulemaking process to public

New York officials crafting policy to regulate shale gas drilling amid unanswered health concerns will likely re-open the process to public hearings, essentially guaranteeing more momentum for the movement that has effectively stalled the industry’s advancement into the Empire State for more than four years.

Emily DeSantis, a spokeswoman for the Department of Environmental Conservation, said late this afternoon that agency officials expect to begin a new rulemaking process rather than try to meet a Nov. 29 deadline to complete a regulatory overhaul. The news comes a week after DEC Commissioner Joseph Martens announced that the agency will turn part of the review over to the Department of Health Commissioner Nirav Shah to address persistent questions about how shale gas development and high volume hydraulic fracturing will affect public health in communities where it is allowed.

“Given that DEC has said no regulations or final decision will be issued until the completion of Dr. Shah's review, should high-volume hydraulic fracturing move forward, it is expected that a new rulemaking process would be undertaken,” DEC spokeswoman Emily DeSantis said. That process would include at least one public hearing although DeSantis said no timeframes had been made.

DeSantis was responding to my question about whether the DEC would meet a deadline of Nov. 29 to issue policy that would allow permitting to begin. The deadline, outlined in the State Administrative Procedures Act, mandates that new rules must be finalized within 365 days after the final public hearing, or the state must file for an extension.

The rulemaking process was folded into hearings held last year to assess the environmental impacts of shale gas development. Drafts of that report, called the Supplemental Environmental Impact Statement (SGEIS), have undergone several revisions amid intense public criticism. Since the review began in the summer of 2008, more than 80,000 comments have been submitted.

Technically, the rulemaking process, which will produce regulations to govern shale gas development, is different from the SGEIS, designed as a guideline for permitting. While permitting conditions are ultimately left up to the discretion of DEC officials, regulations are set in black and white, and therefore carry more clout for enforcement.

While the SGEIS has been evolving since 2008 along with the state’s position on shale gas, the rulemaking process began only last year. The public hearings held for the SGEIS also applied to the rulemaking process, which made it subject to the SAPA deadline.

Update added 10:35 p.m.

Attorneys from environmental groups pushing for a more comprehensive review of health impacts were encouraged by the latest indication that the DEC will not begin permitting wells before more vetting and evaluation of concerns. Industry representative, meanwhile, were hopeful that the process would not cause long delays.

Deborah Goldberg, an attorney with Earthjustice, said news that the DEC was considering a new rule making process was “hugely important” to the overall debate. Because of the focus on the environmental review, “the rulemaking didn’t get the attention it needed,” she said. Ideally, she added, the state wouldn’t restart the rulemaking process until the SGIES had been finalized. “Then the public would have the benefit of DEC’s environmental analysis before it offers comment on the regulations designed to prevent and mitigate impacts. DEC would know what should be put into regulations and might save itself some litigation.”

Kate Sinding, a senior attorney with the NRDC, had a similar response. “This is reassuring, suggesting that DOH is not going to rush its review… This also provides the opportunity for the agencies to solicit the input of concerned stakeholders in the particular context of health impacts.”

Both NRDC and Earthjustice are among well-heeled environmental agencies that have taken up the policy debate over fracking in New York as signature environmental campaigns with national ramifications. The issue of fracking and renewed interest in onshore drilling in general have raised the profile of domestic energy use and production, along with unanswered questions about air and water pollution, and skepticism related to industry’s exemptions from federal clean water and clean air regulation and hazardous waste disposal laws. Fracking has enabled large scale energy extraction in places where it has never traditionally occurred. Even in Texas, the Fort Worth area is experiencing drilling-related tensions as the build out of the industry encompasses urban settings.

Martens has left no doubt that his DEC is working under the threat of lawsuits. The health department review was a recently-added component, in part “to ensure the strongest possible legal position for the Department given the near certainty of litigation,” Martens said in a statement last week.

The process will not get any easier. If the debate is reopened for public hearings, the state would be required again to formally respond to comments – an exhaustive process that has previously overwhelmed DEC staff due to the sheer number of responses. Public hearings have also been draws for activists with placards, props, and enthusiasm befitting pep rallies and political conventions.

Given the health and environmental stakes, Goldberg and Sinding are encouraged. “Democracy takes time – and that’s a good thing,” Goldberg said. “The more careful we are, the more information we have, the better chance we have to protect our air, water, and quality of life.”

Several Industry representatives expressed varying degrees of confidence that the process would not be delayed much longer. “The failure to complete the rule-making in a time or starting a new one should not be an impediment to moving forward in New York if and when—hopefully sometime in my lifetime—they finally finish the process,” industry attorney Tom West told GNS reporter Jon Campell today.

The news didn't shake the faith of New York State Petroleum Council Executive Director Karen Moreau that the Cuomo administration was competently handling the review. “Certainly any hint at delay is something that doesn’t help the state’s economic picture, but as far as whether or not this is going to affect the ultimate outcome, I can’t say that,” Moreau told Campbell. “We feel very confident that the process is going to unfold as it should, the health review will be done and a determination will be made at that point.”

On a final note, the policy decisions and industry reaction must be considered in the context of a glut in the natural gas market that has reduced prices, lowered the amounts of lease payments and royalties to landowners, and eased political pressure to move quickly in New York. Natural gas prices move in cycles with demand, so that could change.