NY Official: Highly Unlikely to Issue Fracking Permits in 2011

NEW YORK (Dow Jones Newswires), July 1, 2011

New York State environmental authorities have determined that hydraulic fracturing can be safe, but the first permits to apply the controversial drilling technique won't likely be issued this year, the state's top environmental official said Friday.

Joe Martens, commissioner for the state's Department of Environmental Conservation, said that with strict regulation, "we believe high-volume fracturing can be done safely in New York."

Hydraulic fracturing, also known as fracking, involves injecting high volumes of water mixed with chemicals into tight rock formations, in order to crack them and release the oil and gas trapped within.

Martens was presenting a study of the environmental impact for high-volume fracturing commissioned by the state government that recommends that fracking be allowed on private lands, but not near public aquifers nor the New York City and Syracuse watersheds.

DEC, however, won't issue permits until the report, unveiled Friday, goes through its comment period and is finalized. "It's impossible to predict" when first permits will be issued," Martens said. "It is highly unlikely that it would be this year." DEC will issue regulations codifying the recommendations of the report once the review process is over, Martens said.

New York state's embrace of fracking comes amid national controversy over the issue. Proponents say the technique, perfected in the last decade by independent U.S. oil companies, is an economic boon for state coffers and local populations, and has unleashed an unprecedented supply of natural gas. Opponents say fracking can pollute aquifers and surface waters, constituting a serious danger to public health, allegations the oil industry denies.

New York, which straddles the giant Marcellus Shale natural gas field, has huge gas potential, but fierce opposition to the practice and the uncertainty caused by the controversy has kept it off limits to oil producers. Opposition hasn't been limited to New York. The New Jersey legislature voted on Wednesday to ban fracking in its state, though it isn't a key drilling area. Even in places traditionally comfortable with the tradeoffs associated with energy production, such as Texas, oversight has increased. The U.S. Environmental Protection Agency is currently doing its own study, primarily on the potential effects of fracking on drinking water and groundwater.

Catskills Citizens For Safe Energy, an advocacy organization that opposes fracking, said in a statement on its website that "no one" can say with certainty that chemicals injected into the ground "won't present a threat to our drinking supplies in the years and decades to come." The state's recommendations will protect some drinking water supplies, but not others, the organization said.

With the recommendations issued by DEC, more than 80% of the Marcellus Shale resources present in the state will be within the reach of energy companies, Martens said.

Martens said after a close examination of contamination incidents in neighboring Pennsylvania, which also sits atop the Marcellus Shale, New York environmental authorities "have been able to isolate what the problems were."

New York state officials will require that oil companies put a long piece of pipe--known as "intermediate casing"--separating the drill pipe from the surrounding rock formation in order to keep shallow natural gas found during the drilling process from migrating into nearby aquifers or drinking wells. Authorities will also seek to ensure that wells are properly cemented, as poor cementing jobs were implicated in a number of cases where "people ended up with gas in their wells," Martens said.

The state will also require rigorous equipment tests and better storm-water controls, and will seek to have its staff conduct diligent oversight, Martens said.

Martens acknowledged, however, that the state has "limited staff right now" to enforce the strict regime it envisions. That could create a backlog in permitting. "We will only review those applications that we have the staff capacity to handle," he said.

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