NY-Marcellus update--JLCNY

BREAKING NEWS

On March 1, 2011 the New York Senate Environmental Conservation Committee approved the nomination of Joseph Martens as the Department of Environmental Conservation (“DEC”) commissioner. During the Committee meeting, Martens stated that DEC is hoping to complete the second draft SGEIS by June 1. The full Senate will vote on Martens confirmation on March 8, 2011.

Status of Draft Supplemental Generic Environmental Impact Statement:

On February 8, 2011 acting New York State Department of Environmental Conservation (“DEC”) Commissioner Joe Martens stated that he expects the SGEIS to be completed by June 2011. He said that while the State should proceed cautiously, it should not wait for the U.S. Environmental Protection Agency to complete its hydraulic fracturing study, which is projected to take two years. Martens is still awaiting confirmation by the New York Senate.

NYS Legislative Developments

The New York Assembly and Senate have considered several bills since the beginning of the 2011 session that could impact natural gas development. Our consultant is monitoring these bills and advocating our positions.

· On March 1, 2011 Senate Bill 03659 was introduced. The bill would require natural gas companies which use compulsory integration to pay integrated royalty owners the highest royalty in an existing lease in the spacing unit but no less than 18.75%.

· On February 25, 2011 Assembly Bill 05677 was introduced. The bill would prohibit hydraulic fracturing and horizontal drilling on land, or within one mile of land, under the jurisdiction of the Office of Parks Recreation and Historic Preservation.

· New York Assembly bill A05547 was introduced on February 23, 2011. The bill would establish a moratorium on hydraulic fracturing until 120 days after the U.S. Environmental Protection Agency (“EPA”) issues its report on the effects of hydraulic fracturing on water quality and public health.

· Assembly bill number A00375 prohibits the Office of Parks, Recreation, and Historic Preservation from leasing or extending any lease or contract for the extraction of natural gas for “a non-park purpose” on state parklands or historic sites.

· Assembly bill number A00300 establishes a moratorium on the acceptance, disposal, or processing of fluids used for hydraulic fracturing outside of New York until 120 days after the U.S. Environmental Protection Agency completes its study on hydraulic fracturing.

· Assembly bill A01265 prohibits the use of toxic substances in hydraulic fracturing fluids.

· Senate bill S00425 requires disclosure of hydraulic fracturing fluids.

· Senate bill S00786 establishes a natural gas and oil well security fund to help well owners and operators satisfy financial security requirements. Participants would be required to make an initial payment of $500 and subsequent payments of $10/well/year into the fund to be eligible for distributions.

· Senate bill S00893 and Assembly bill A02108 impose strict, joint and several liability on natural gas drillers for damages caused by high volume hydraulic fracturing. Damages include personal injury and wrongful death, property damage, loss of property value, and lost profits.

· Senate bill number S01234:

· prohibits drilling in the New York City and Delaware River watersheds as well as other source water areas;
· sets forth a 30-day right of rescission for landowners who enter into a lease and limits the terms of a lease to a maximum of 10 years, or five years if no drilling activity occurs;
· requires applicants for a well permit to assess impacts on biodiversity and list all expected air emissions, including greenhouse gases;
· mandates posting of a bond before any construction occurs;
· requires natural gas drillers to obtain a permit from the New York State Department of Environmental Conservation (“DEC”) for water withdrawals greater than 5,000 gallons/day or more than 1% of in stream flow;
· requires disclosure of hydraulic fracturing fluids used, storage in corrosion-proof tanks, and immediate reporting of spills;
· empowers DEC to prohibit fracturing fluids;
· classifies hydraulic fracturing material as hazardous waste;
· restricts noise and lighting;
· creates a presumption that contamination of individual drinking water wells in areas where natural gas drilling occurs is caused by drilling operations; and
· makes drillers, rather than landowners, liable if the site is designated as a brown field site due to drilling activities.

Please consider how important it is to your future that these bills be addressed with your interest in mind. And then consider how important it is that our political consultant continue to monitor such bills and advise us on them. And finally, please donate to the JLCNY so that we can continue to employ our consultant to "coach" us as we perform these most important efforts.

Other News:

On February 26, 2011 the New York Times published an article in which the newspaper claimed to be in possession of numerous documents from the U.S. Environmental Protection Agency (“EPA”), including confidential EPA and industry studies showing that wastewater from high volume hydraulic fracturing poses a significant threat to human health and the environment. That report sparked fears of environmental and health dangers by comparing the level of radioactivity in flow back water to federal drinking water standards. The article states that flow back water has been disposed of in Pennsylvania, West Virginia, and New York without adequate treatment, because facilities are not equipped to treat radioactivity and certain chemicals present in the wastewater. The article goes on to lay out a series of environmental and health impacts across the nation allegedly caused by natural gas drilling. The sources cited in the report and the severe criticisms of Pennsylvania’s regulations have been strongly opposed by former Pennsylvania Department of Environmental Protection chief John Hangar.

On February 20, 2011 the State University of New York at Cortland hosted a debate between two university professors concerning the possible risks posed by high-volume hydraulic fracturing in New York. Syracuse University professor and hydro-geologist, Donald Siegel, defended natural gas drilling and stated that it posed very little risk to water supplies. His opponent, Cornell University professor and engineer, Anthony Ingraffea, countered that the cumulative effects of water usage and disposal of flow back water could have a significant impact on health and safety. Groups present at the meeting included the Joint Landowners Coalition of Central New York, Friends of Natural Gas, NYPIRG, Sierra Club, Residents Opposing Unsafe Shale-Gas Extraction, Gas Drilling Awareness for Cortland County, New York Residents Against Drilling, and the Syracuse Peace Council.

On February 17, 2011 the New York Public Service Commission approved construction of a natural gas pipeline in Windsor, located in the southern tier of New York. Houston-based Laser Northeast Gathering Co. will construct the 33-mile pipeline from Susquehanna County, Pennsylvania, through Windsor to the Millennium Pipeline. The pipeline will initially serve as a gathering line for nine wells operated by Alta Resources in Pennsylvania.

Federal Developments

On February 26, 201 Massachusetts Representative Ed Markey sent a letter to the U.S. EPA demanding that it revise regulations for the treatment and disposal of flow back water from high volume hydraulic fracturing. Markey demanded that EPA require immediate testing of wastewater discharged from facilities that accept drilling waste into sources of drinking water. He also called on EPA to provide documents it has relating to radioactive materials in hydraulic fracturing wastewater. On February 28, 2011 Markey and Rep. Rush Holt (NJ) pressured Interior Secretary Ken Salazar for more information about the extent of present and future hydraulic fracturing operations on public lands. On March 1, 2011 Rep. Tim Murphy (PA) and Natural Gas Caucus co-chairman sent an e-mail pushing EPA to provide more information. These actions came after the New York Times reported on February 26, 2011 that drilling companies were disposing of wastewater at facilities unable to filter the water for radioactive byproducts. Rep. Maurice Hinchey (NY) also sent a letter to EPA asking the agency to accelerate its current investigation of the impacts of hydraulic fracturing on drinking water. Hinchey is also actively seeking to regulate drilling wastes under the Resource Conservation Recovery Act and sponsored the “FRAC Act” in 2009 to regulate hydraulic fracturing under the Safe Drinking Water Act.

On February 22, the EPA selected five possible sites for a retrospective study of drinking water contamination as part of its hydraulic fracturing study. The sites are located at Killdeer, ND; Wise and Denton counties, TX; Bradford and Susquehanna counties, PA; Wetzel County, WV; Greene and Washington counties, PA; and Las Animas County, CO. The EPA has also proposed four life-cycle studies to analyze the water use and disposal in Greene County, PA; Laramie County, WY; Denton County, TX; and Fort Berthold Indian Reservation, ND. All four case studies are scheduled to begin in mid-2011. EPA’s draft proposal will be reviewed by the Science Advisory Board on March 7-8, 2011.

On February 8, 2011 the U.S. Environmental Protection Agency submitted its draft hydraulic fracturing study plan to the agency’s Science Advisory Board. The proposed research includes a full assessment of water used in the hydraulic fracturing process from withdrawal to treatment and disposal. The SAB will review the plan March 7-8, 2011 with an opportunity for public comment. EPA will then revise the study plan and begin its research. Initial results are expected by the end of 2012 with a full report in 2014.

On February 2, 2011 U.S. Environmental Protection Agency (“EPA”) Administrator, Lisa Jackson, testified before the Senate Committee on Environment and Public Works. Jackson announced that EPA expects to complete its hydraulic fracturing study work plan within the next few months. Jackson also told the panel that hydraulic fracturing “is not an unregulated activity” and that federal regulation may not necessarily be needed. In Jackson’s words—“States are different, geology is different, the number of people and population density are different. There may be a need for a federal role. We simply don’t know…”


That's the update for now. Of course this is a very fast paced issue and we'll continue to work at it as best we can with our limited funds. We'll be sending out another update as events dictate a need.