Shale Gas Perspectives - Gas Drilling in New York: To Be Or Not To Be? (Vol. I, No. 1)

A Periodic Blog on the Status of Marcellus Shale Development in the Southern Tier of New York--
and Other Interesting and Exciting Developments in the Law, Science, and Politics of Natural Gas
Development (Or Not) in the Empire State

By Kenneth S. Kamlet and the Other Oil & Gas Lawyers at Hinman, Howard & Kattell, LLP, Binghamton, New York
Gas Drilling in New York: To Be Or Not To Be?  (Vol. I, No. 1)

February 14, 2013 – This is the morning after the day before….  The day before, February 13th, was to be the date by which the final Supplemental Generic Environmental Impact Statement (the SGEIS) on High-Volume Hydraulic Fracturing (HVHF) would need to be issued in order for related regulations to be issued by February 27th.  The assumption was that issuance of the regulations would be required to allow the New York State Department of Environmental Protection (DEC) to begin issuing gas drilling permits for HVHF.

Hold the presses!  In a news release on February 12th, DEC Commissioner Joe Martens issued an important clarification:

 “The previously proposed high-volume hydraulic fracturing regulations cannot be finalized until the SGEIS is  complete.  However, this does not mean that the issuance of permits  for high-volume hydraulic fracturing would be  delayed.”

It all depends on a Public Health Review being overseen by the New York State Department of Health (DOH).  That review was initiated in September by DOH Commissioner Nirav Shah, MD, MPH, at the request of DEC.  The focus of that review, assisted by three outside expert researchers retained by DOH, is “whether the final draft SGEIS adequately identifies potential public health impacts of HVHF and whether additional mitigation measures are needed  beyond those already proposed in the draft SGEIS.”¹

Continuing with his clarification, Commissioner Martens explained:

 “If the DOH Public Health Review finds that the SGEIS has adequately addressed health concerns, and I adopt the  SGEIS on that basis, DEC can accept and process high-volume hydraulic fracturing permit applications 10 days after  issuance of the SGEIS.  The regulations simply codify the program requirements.”

This, in fact, is the basis on which vertical natural gas drilling has been permitted by DOH in the past under the Oil, Gas and Solution Mining Law (OGSML), which also provides the legal authority for HVHF.

Commissioner Martens continued:

 “If, on the other hand, the DOH review finds that there is a public health concern that has not been assessed in the  SGEIS or properly mitigated, we would not proceed, as I have stated in the past."

“In either event, the science, not emotion, will determine the outcome.”

(What about the politics?)

Dr. Shah, in his remarks (DOH Letter) emphasized that “[t]he time to ensure the impacts on public health are properly considered is before a state permits drilling” and that the approach of “other states” which “began serious health reviews only after proceeding with widespread HVHF… is not the right approach for New York to take if we are serious that public health is the paramount question in making the HVHF decision.”

How does one study the impacts of HVHF on public health before such drilling is allowed?  Only by assessing the health impacts of such drilling in other states and reviewing other studies.  But, what if other studies are not yet complete, adverse impacts on human health are hard to find, and New York’s regulations are significantly more stringent than in other places?  Do you continue to delay the issuance of drilling leases in New York until (all) other studies are completed?  Do you allow, as Commissioner Martens seems willing to entertain, a limited number of drilling leases on a pilot basis, subject to stringent permit conditions and restrictions?  What level of risk is acceptable?  Zero?  One-in-a-million?  Are the potential economic and other benefits of efficiently tapping deep-shale natural gas reserves significant enough that they justify some level of public health risk—perhaps the level of risk associated with the construction of a skyscraper like the Empire State Building, or a bridge like the Brooklyn Bridge, or a tunnel like the Holland Tunnel?  Or, the risk of driving a car on the Long Island Expressway?

There is a difference between reasonable caution and reversing the Industrial Revolution.  And there is a difference between a calculated risk and “paralysis by analysis.”

Dr. Shah wisely suggests that DOH and its outside experts consider “the first comprehensive studies of HVHF health impacts at either the state or federal level.”  The only problem is that there are only three of them (does this suggest that such health effects are not very prevalent?), none of them will be completed in the near future, and it seems questionable that they will be of much value in quantifying the magnitude of public health impacts to be expected in New York or of cost-effective mitigation measures.  Dr. Shah and his team “will be in Pennsylvania and Washington in the coming days for first-hand briefings on these [three] studies and their progress, which will assist in informing the New York review.”  He anticipates “delivering the completed Public Health Review to [Commissioner Martens] within a few weeks, along with [his] recommendations.”

What are the three studies Dr. Shah is pinning his hopes on?

  •  The U.S. EPA hydraulic fracturing study.  This study was commissioned by Congress in 2009.  It consists of 18  studies assessing the impacts of shale gas wells on public drinking water.  A 278-page interim report (reflecting  research progress as of September 2012) was released by EPA in late December 2012.  Final conclusions will not  come until after a draft report is released for public comments sometime in 2014.
  • The Geisinger Health Systems study.  This study will analyze health records for asthma and other respiratory  diseases, accidents and injuries, and birth outcomes in areas where shale gas is being developed in Pennsylvania.   Some preliminary results are expected to be released this year, but other aspects of the research “will unfold over  five, 10 or 15 years.”  Geisinger Health System announced on February 18th that it had been awarded a $1 million  grant from the Degenstein Foundation to look at detailed health histories of hundreds of thousands of patients who  live near wells and other facilities that are producing natural gas from the Marcellus shale formation.
  •  The University of Pennsylvania study.  This recently announced study of HVHF health impacts will be led by  researchers from Penn, in collaboration with scientists from Columbia, Johns Hopkins and the University of North  Carolina.  The research team plans to study reports of nausea, headaches and breathing difficulties from people who  live near natural gas drilling sites, compressor stations or wastewater pits.  The first project included a survey  conducted on the residents in the Marcellus Shale regions of Pennsylvania to deduce whether their health symptoms  were connected to local gas drilling.  Results of this survey project are expected to be out this month, but follow-up  studies are contingent on the receipt of federal funding.

New York Governor Andrew Cuomo told reporters February 13th that he would not rush Commissioner Shah to meet an “arbitrary” deadline and he reiterated his call for a decision based on “facts and information” and not “emotion.”
Meanwhile, New York State’s environmental review of HVHF surpassed the four-year mark last year in what one commentator called an “unimaginably lengthy and tiresome process.”²

¹Feb. 12, 2013 Letter from DOH Commissioner Nirav Shah to DEC Commissioner Joe Martens ("DOH Letter").

²Frank Bifera and Yvonne Hennessey of Hiscock & Barclay, LLP, "Finally Ready to Drill: NY Shale Development-Part 1," Law 360 (#406731).

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