Global Traditional Energy Resources
Overview
Although the Marcellus and Utica shale plays at the center of the shale gas development boom extend well into New York,1 and the State maintains an established regulatory program for oil and gas exploration and production operations,2 hydraulic fracturing had been the subject of a de facto moratorium in New York since 2008.3 This de facto moratorium turned into an outright ban in June of 2015.4 Most recently, in April of 2020, New York codified a permanent ban on hydraulic fracturing in the Fiscal 2021 State budget, prohibiting the Department of Environmental Conservation from approving permits that would authorize an applicant to drill, deepen, plug back or convert wells that use high-volume hydraulic fracturing as a means to complete or recomplete a well.5
Statutory and Regulatory Framework
The New York State Department of Environmental Conservation (DEC or the Department) is the state agency charged with implementing the oil and gas exploration and production regulatory program in the State.6 The DEC determined in 2008 that a Supplemental Generic Environmental Impact Statement (SGEIS) was necessary to assess the environmental impacts resulting from horizontal drilling and high-volume hydraulic fracturing (HVHF).7 While the DEC worked on the SGEIS, it did not authorize any drilling permit applications for horizontal wells using HVHF, resulting in a de facto moratorium.8 The DEC released an initial draft SGEIS in September 2009,9 and, following a large volume of public comments, performed an additional review of the environmental impacts associated with HVHF.10 The Department released a “Revised Draft SGEIS” in 2011, accompanied by proposed rules regarding HVHF that address well permitting, siting, construction and operation, recordkeeping, and waste management and reclamation.11 Significant comments were received on the Revised Draft SGEIS,12 and the DEC filed for a 90-day extension from its November 2012 deadline to develop regulations to allow State Department of Health (DOH) Commissioner Nirav Shah and his team to complete their assessment of the health effects of hydraulic fracturing.13 In the meantime, the DEC released revised proposed regulations for hydraulic fracturing in November 2012.14
In December 2014, the DOH finally concluded its study, releasing its report entitled “A Public Health Review of High-Volume Hydraulic Fracturing for Shale Gas Development.”15 The report recommended that HVHF not proceed in the State at this time because the available information was insufficient to assess the risks involved.16 Nevertheless, the report claimed that existing information was sufficient to conclude that HVHF has resulted in environmental impacts that are “potentially adverse to the public health.”17
Based on the DOH report and recommendation, the DEC published the final SGEIS in May 201518 and issued a Findings Statement banning HVHF in New York in June 2015.19 After analyzing additional scientific evidence regarding the potential significant adverse impacts of HVHF, the Final SGEIS explained that the DEC considered expanding the mitigation measures proposed in the draft SGEIS “to protect public health and the environment with a greater margin of safety.”20 DEC decided that even with the implementation of these mitigation measures, the significant adverse public health and environmental impacts could not be adequately avoided.21 Moreover, the SGEIS concluded that these measures would result in increased costs to industry and make a significant portion of the Marcellus Shale unavailable for HVHF operations, thereby impacting the potential economic benefits associated with HVHF in New York.22 In light of these considerations, the final SGEIS concluded that the benefits of HVHF do not outweigh its substantial risks to public health and the environment and, as a result, banning HVHF is the only reasonable action.23
Recent News and Developments
Delaware River Basin Commission Proposed Ban
On November 30, 2017, the Delaware River Basin Commission (“DRBC”) published a proposed rule that, if finalized, would prohibit “high-volume hydraulic fracturing” within the Delaware River Basin.24 The Delaware River Basin extends into four northeastern states and includes parts of eight counties in New York. Because New York has already banned HVHF, the DRBC’s ban is not expected to have any effect on the level of hydraulic fracturing activity in New York. Nonetheless, the DRBC’s proposed rule would also discourage the exportation of waters from the Delaware River Basin “to support hydraulic fracturing outside the Basin,” require an assessment of alternatives before allowing the importation of produced water into the Delaware River Basin, and require DRBC approval for produced water treatment within the Delaware River Basin. The DRBC has yet to finalize the proposed rules.
Last updated November 2020.
Links & Downloads
- New York to Ban Fracking in 2015, V&E Shale Insights – Tracking Fracking E-communication, December 17, 2014
- New York’s Department of Environmental Conservation Extends Rulemaking Process for Shale Gas Drilling Regulations, V&E Daily Fracking News, December 3, 2012
1 See Geography: Maps: Oil and Gas Related Exploration, Resources, and Production: Shale Gas and Oil Play, Lower 48 States, U.S. Energy Info. Admin. [“USEIA”] (June 30, 2016), https://www.eia.gov/maps/images/shale_gas_lower48.pdf.
2 6 NYCRR 550-559.
3 Jon Campbell, New York Plans to Prohibit Fracking, USA Today (Dec. 17, 2014), http://www.usatoday.com/story/money/business/2014/12/17/new-york-fracking/20538891/.
4 Home: Energy and Climate: Oil and Gas: High-Volume Hydraulic Fracturing in NYS, N.Y. State Dep’t of Envtl. Conserv. [“NYSDEC”] (last visited Sept. 21, 2016), http://www.dec.ny.gov/energy/75370.html.
5 FY 2021 Budget Highlights, Green Economy & Environment (Apr. 2, 2020), https://www.governor.ny.gov/fy-2021-new-york-state-budget/fy-2021-budget-highlights.
6 N.Y. Comp. Codes R. & Regs. tit. 6, § 550.1.
7 Bureau of Oil & Gas Reg., NYSDEC Div. of Mineral Res., Final Scope for Draft Supplemental Generic Environmental Impact Statement (DSGEIS) on the Oil, Gas and Solution Mining Regulatory Program 2 (Feb. 6, 2009), http://www.dec.ny.gov/docs/materials_minerals_pdf/finalscope.pdf.
8 Steve Hargreaves, New York Set to Lift Fracking Ban, CNNMoney (July 1, 2011), http://money.cnn.com/2011/07/01/news/economy/fracking_new_york/.
9 NYSDEC Div. of Mineral Res., Draft Supplemental Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program (Sept. 2009), ftp://ftp.dec.state.ny.us/dmn/download/OGdSGEISFull.pdf.
10 NYSDEC, supra note 4.
11 NYSDEC Div. of Mineral Res., Revised Draft Supplemental Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program (Sept. 2011), http://www.dec.ny.gov/data/dmn/rdsgeisfull0911.pdf.
12 NYSDEC, supra note 4.
13 Colin Sullivan, Hydraulic Fracturing: Eyeing an Endgame, N.Y. Governor to File for 90-Day Extension on Fracking Rule, EnergyWire (Nov. 29, 2012), http://www.eenews.net/stories/1059973059.
14 Associated Press, Revised ‘Fracking’ Regulations Released in NY, FuelFix (Nov. 30, 2012).
15 N.Y. Dept. of Health, A Public Health Review of High Volume Hydraulic Fracturing for Shale Gas Development (Dec. 2014), https://www.health.ny.gov/press/reports/docs/high_volume_hydraulic_fracturing.pdf.
16 Id. at 12.
17 Id. at 88.
18 See NYSDEC, supra note 4.
19 NYSDEC, Final Supplemental Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program (June 2015), http://www.dec.ny.gov/docs/materials_minerals_pdf/findingstatehvhf62015.pdf.
20 NYSDEC, Final Supplemental Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program, Vol. 1, Executive Summary 2 (May 2015), http://www.dec.ny.gov/energy/75370.html#2015.
21 See id. at Executive Summary 12 (“[T]he ever increasing collection of proposed mitigation measures demonstrates three essential weaknesses of the proposed program: (1) the effectiveness of the mitigation is uncertain; (2) the potential risk and impact from the proposed Action to the environment and public health cannot be quantified at this time, and (3) there are some significant adverse impacts that are simply unavoidable.”).
22 Id. at Executive Summary 2-3.
23 Id. at Executive Summary 2.
24 Press Release, DRBC, DRBC Publishes Revised Draft Regulations Addressing Hydraulic Fracturing Within the Delaware River Basin (Nov. 30, 2017), https://www.state.nj.us/drbc/home/newsroom/news/approved/20171130_newsrel_hydraulic-fracturing.html.