Thursday, September 27, 2012

November 29 deadline looms for final NY fracking policy Cuomo administration may file for 90-day extension

While Governor Andrew Cuomo refuses to say when or whether New York will begin permitting shale gas wells, the answer lies in a little-known fact: his administration faces a Nov. 29 legal deadline to finalize a decision.

An obscure provision of a technically-dense law provides the most concrete clues about when the public can expect Shale Gas policy in New York. The law is called the State Administrative Procedures Act (SAPA). Several lawyers have called my attention to Section 202, which spells out how administrative agencies are required to go about rulemaking. Specifically, the provision states that regulations have to be finalized one year from the last public hearing on the issue under review unless an extension is filed.

It’s a fact that has gained little attention beyond the circle of lawyers who have been following the issue closely as they develop strategy in support or against fracking in New York.

Helen Slottje, an attorney with the Community Environmental Defense Council, told me she is expecting the policy to be released on or about Nov. 29. This is precisely one year from the date of the last public hearing on the state’s review of fracking policy and, in Slottje’s view, a politically opportune time to release a controversial policy decision, because it’s “a time when most people have a ton of other things to do, the elections are over, and the legislature is not in session.”

The DEC also has the option of filing for a 90-day extension. That would make the deadline March 1, or thereabouts.

The DEC began its formal review of shale gas policy under the David Paterson administration in summer of 2008 through a document called the Supplemental Generic Environmental Impact Statement (or SGEIS). Originally, the SGEIS was a vehicle to update permitting guidelines for shale gas wells and an amendment to regulations dating to 1992 governing conventional well development. But Cuomo’s administration, wary of legal challenges to derail the shale gas industry’s advancement into New York, began a formal rulemaking process – folded into the environmental review -- to update regulations. Public hearings scheduled for the SGEIS also satisfied the requirements for the rulemaking process, thereby subjecting the entire policy package to the SAPA deadline. If the DEC misses the Nov. 29 deadline without filing an extension, the agency could face a do-over of the review --- including the public hearings that have produced more than 80,000 public comments and critiques that have already delayed the process for years.

The scope of the review was originally environmental, but health advocates have also gotten involved by posing questions about the short and long-term impact on public health from all aspects of shale gas development – not just fracking. Fear of law suits is thematic in the agency’s response. Last week, DEC Commissioner Joseph Martens announced that, because of those questions, the policy proposal will now be evaluated by the Health Department, which will assemble an independent panel, to “ensure the strongest possible legal position for the Department given the near certainty of litigation, whether the Department permits hydrofracking or not.”

Several lawyers questioned whether the state can complete the health review with due diligence before the Nov. 29 deadline.

“They have, of course, been clear that they won’t issue the final regulations until the health review is complete,” said Kate Sinding, a senior attorney for the National Resources Defense Council – one of the agencies that pushed for the health review. “Whether they try to shoehorn that in between now and November 29th … or opt to extend the deadline by 90 days, which they can legally do, we don’t know.” She doubted the agency could make the Nov. 29th deadline while acting in good faith to complete the health review. “It seems unlikely that they could do what needs to be done to accomplish the objectives of a real Health Impact Assessment in such an abbreviated timeframe.”

Tom West, a lawyer and lobbyist who represents the industry, said he didn’t expect the review to be complete before the first of the year. In that case, West said the agency “can let it (the rulemaking application) lapse, republish with a 30 day public comment period that gets them a 90 day extension, or re-propose the rulemaking if there have been substantive changes, which effectively starts the process over.”

Chris Denton, a lease attorney in Elmira, predicted the policy review was drawing to a close after more than four years. Denton said he believes the Cuomo administration has quietly factored the Nov. 29 deadline into its overall strategy. “Cuomo’s not going to miss this deadline,” Denton said. “It sends the wrong message.”

While the pending policy package is a central component to a tactical fight to delay or expedite shale gas development in New York, there are other factors. The price of gas has fallen with a market glut. With that, political pressure has eased along with the pace of aggressive prospecting, exploration, and lucrative lease offers that marked the 2008 land rush.

Cuomo also faces the uncertainty of whether Democrats, who have generally opposed a rush to begin permitting gas wells in favor of more study, will control the Legislature after elections, or whether it will remain split. The anti-fracking movement has been keeping pressure high by effectively challenging the credibility of the DEC, and specifically the agency’s claim that it has a spotless record regulating the gas industry. This week, Walter Hang brought to light more records of spills and abandonment – ample evidence, he says, that the DEC is ill-equipped to handle conventional shale gas development, much less the more intense and wide-spread operations of a shale gas play and the legacy it may leave the next generation.

As president of a data base firm called Toxic Targeting and formerly a community organizer with New York Public Interest Research Group, Hang is a long-time government watchdog and industry antagonist. The story with his relationship with the DEC is told in Under the Surface, and this week’s developments are a continuation of that battle. Hang’s company tracks corporate pollution through government records, and this week he released annual reports and other information that show 4,800 known abandoned wells, and a like number yet to be discovered in woods, backyards, playgrounds and under buildings. Unplugged or improperly plugged wells can cause explosions and risks to water supplies by providing a pathway for methane to move into enclosed spaces and for hydrocarbons and other toxic pollutants to migrate into the water table.

The problem is obscured by lack of reporting requirements and enforcement. When claims of water contamination are reported, the DEC Mineral Resources Division, the lead investigative agency, often leaves it up to the industry to settle with property owners who face a high burden of proof and experienced industry legal teams. Claims of liability from explosions face the same problem. Some of these cases were picked up by local health officials frustrated with the DEC’s denial of problems. As previously reported in this blog and in Under the Surface, William T. Boria, a water resources specialist at the Chautauqua County Health Department, tracked more than 140 complaints related to water pollution or gas migration associated with a boom in nearby conventional drilling operations (prior to shale gas development). In a 2004 memo summarizing the issue, he concluded “Those complaints that were recorded are probably just a fraction of the actual problems that occurred.” County health officials tabulated information on 53 of the cases from 1983 to 2008 on a spreadsheet, including methane migration, brine pollution, and at least one in which a home had to be evacuated after the water well exploded. “A representative I spoke with from the Division of Minerals [of the DEC] insists that the potential for drinking water contamination by oil and gas drilling is almost non-existent,” Boria wrote in his memo to a party whose name was redacted. “However, this department has investigated numerous complaints of potential contamination problems resulting from oil and gas drilling.” (Pennsylvania has similar problems. According to a briefing by the Department of Environmental Protection to Pennsylvania state’s Oil and Gas Technical Advisory Board, a group of state government–appointed industry representatives that advises the agency on technical and policy matters, methane migration from gas drilling, had “caused or contributed to” at least six explosions that killed four people and injured three others over the course of the decade preceding full-scale Marcellus development. The threat of explosions had forced 20 families from their homes, sometimes for months. At least 25 other families have had to deal with the shut-off of utility service or the installation of venting systems in their homes. At least 60 water wells -- including three municipal supplies-- had been contaminated.)

In addition to the orphan wells in New York, Hang most recently uncovered agency documentation that showed vegetation killed by leaking waste pits, brine leaking from rusted storage tanks, and crude oil contaminating residential wells and streams.

“Governor Cuomo can talk all he wants about good science,” Hang said. “This data shows that the DEC does not enforce the law.”

Questions persist whether the agency has the manpower to enforce regulations once they are drafted. In 2010, DEC Commissioner Peter Grannis was fired by Larry Schwartz, Paterson’s secretary (and now Cuomo’s secretary) after a memo by Grannis was leaked that suggested the DEC, decimated by cuts, would lack the ability to effectively regulate.


  1. yes, keep extending the deadline or we're all dead!!

  2. Actually DEC oil and gas regulations date mostly from 1972, not 1992. DEC was created about 1972. The only changes in O&G regs since then were revisions in NYCRR 6, 550 and 551, and addition of 559, which deals with the Bass Island trend in westernmost NYS. Not a single regulation resulted from the GEIS of 1992.

    1. Thanks for the clarification. O&G industry MO is a throwback to pre-regulatory era, with little in the way of modernization of the rules (until now). We see a similar pattern on the federal level, where the indusry is exempt from rules that apply to other industry.