E2 Law Blog : Environmental Lawyers & Attorneys : Greenberg Traurig Law Firm : Climate Change, Energy Legislation

 From K.B. Battaglini of GT Houston: 

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From William Hurst of GT Albany:

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with Mark Glaser, GT Albany

Last week was an active week for those following regulation of Marcellus Shale natural gas development.

On December 11, New York Governor David Paterson vetoed AB 1143 / SB 8129, that would have banned all new permits for natural gas wells to be stimulated by hydraulic fracturing until May.  Instead, he issued an Executive Order establishing a moratorium on new horizontal, high-volume, hydraulic fracturing until July 1, 2011.  His counsel's statement is here.

Update:  The Governor's veto message was released on December 14.

On December 9, the Delaware River Basin Commission published its long-awaited draft natural gas well pad regulations.  It did so against the advice of New Jersey DEP Commissioner Bob Martin stated in a letter of December 7 and over the objection of New York Governor Paterson stated in a letter of December 6.  New York voted against release of the draft regulations at the Commission meeting of December 8.  Comments on the draft are due by March 16, 2011, and the Commission plans three public hearings in February.

On December 8, the Delaware River Basin Commission also adopted a resolution drastically curtailing, and possibly terminating, planned January hearings on natural gas exploratory wells -- that is wells intended for investigation and not production.  Most of the issues to have been addressed in that hearing are now to be considered in the pending rulemaking.  This resolution also avoided having the hearing address the adequacy of Pennsylvania state regulatory program, an issue that opponents of natural gas development had advanced in expert reports filed in the proceeding.  The Commission Chair's instructions to the hearing officer of December 3 reflect the difficulty of that issue.

The DRBC draft regulations would govern a number of issues, such as bonding and setbacks, also regulated by Pennsylvania and New York.  If adopted, they would impose different rules for identical natural gas development in different watersheds, including different watersheds within the same state.  The December 10 Philadelphia Inquirer quoted Commission Executive Director Carol Collier as analogizing this distinction to the regulations administered in the New Jersey Pinelands by the Pinelands Commission.  Those are quite explicitly land use regulation.  Whether the Interstate Compact Commissions intend to regulate each wave of land development, or just to focus on the current natural gas "boom," remains to be seen.

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 On November 29, the New York Assembly passed A1143B/S08129B which had previously passed the Senate.  Governor Paterson is reported to be prepared to sign the bill, although the New York Times blog reports that industry groups are still pushing for a veto.  The bill, if signed, would impose a moratorium on new permits for natural gas wells that use hydraulic fracturing until May 15, 2011. 

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The New York Times recently covered the ongoing dispute over drilling for natural gas in the Delaware River Basin, an area not only subject to the jurisdiction of state environmental agencies but also an interstate compact agency known as the Delaware River Basin Commission. At the Commission's regular September 15 meeting, the DRBC Executive Director announced that draft regulations for natural gas wells expected by "end of Summer" would be delayed until "mid-October."  The Commission will not consider new production wells for approval until those regulations are adopted after a public review process.

However, at the same meeting, the Commission considered a request by opponents of natural gas development to stop construction of exploratory or "science" wells currently under way. The Executive Director's determination subjecting exploratory wells other than certain grandfathered wells to DRBC approval is the subject of a contested hearing, but that hearing may not take place until after the grandfathered wells, or several of them, are complete.  On September 15, the Commission voted not to stop construction of the grandfathered wells.  Until those wells are completed and analyzed, the gas production companies cannot decide whether to proceed with production wells in the area, and so if they are permitted, natural gas development can remain on track despite the "moratorium" currently in place until the Commission adopts regulations.

The request for a "supersedeas" filed by the opponents, Damascus Citizens for Sustainability, the Delaware Riverkeeper, and the Delaware Riverkeeper Network may be found here. The responses of the drilling proponents, Northern Wayne Property Owners' Alliance and Newfield Appalachia PA, LLC, may be found here and here.

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From Heather Behnke, GT Albany

New York Department of Environmental Conservation  Commissioner, Alexander "Pete" Grannis, told a conference in Albany on April 15 that DEC would take until late summer or early fall to complete its review of nearly 14,000 comments on the Marcellus Shale study  DEC has determined to conduct before lifting a drilling moratorium.  According to a DEC staffer who also spoke at the conference, no action will be taken on the 58 pending permit applications or any new permit applications until the DEC completes its review and issues a Final Supplemental Generic Environmental Impact Study. Then, those permit applications would have to be amended to meet the requirements of the SGEIS.  Meanwhile, drilling and investment are going forward in Pennsylvania, so the money is all going there--instead of New York.

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