Appalachian Basin

Hydraulic Fracturing Yet Lives in New York

Simultaneously with a whole lot of political maneuvering apparently intended to confuse everyone, characteristic of New York State, the Cuomo Administration has released a set of revised regulations for natural gas development using “high-volume” hydraulic fracturing.  

The New York State Supplemental Generic Environmental Impact Statement (SGEIS) on hydraulic fracturing languishes but the Department of Environmental Conservation published, late last night, proposed hydraulic fracturing regulations along with a “Notice of Continuation under the State Administrative Procedure Act that extends the rulemaking process for ninety days.”  The publication also indicates “comments will be accepted on the revisions to the regulations from December 12, 2012 through 5:00 PM on January 11, 2013.”

It appears Cuomo is threading the needle very carefully from a political perspective and actually making allies of pros and antis in one respect; by getting them to agree this is no way to make policy.  It’s less like making sausage then teasing a starving man with pictures of steaks that are flashed before his eyes every few minutes.  Nevertheless, this latest step must be taken as a positive.  New York State has finally produced something to evaluate in the way of actual standards, based on voluminous input from all sides.

Individuals unfamiliar with New York ways often run away screaming “what’s is it with that state?”  but the Empire State goes to the beat of a different drummer.  Not many states, after all, refer to their lowest courts as Supreme Courts.  Moreover, the guy doing the drumming (I’m talking about state government as a whole) seems to be a Charlie Watts wannabe who’s old enough to be retired at least three times but keeps rockin’ the same old tunes with an occasional new twist.

New York’s environmental review statutes require major governmental actions be subject to a “hard look” at impacts that is supposed to precede action.  Defining the action is often difficult, though, and, as a matter of practicality, the development of regulations or laws subject to review typically proceeds apace with the environmental review, rather than after it.

That’s what is happening here.  DEC is releasing proposed regulations it’s still finalizing, even as it proceeds with the environmental review through the SGEIS.  It’s a back and forth thing born out of necessity in administering a review statute with major structural flaws that leave everyone wondering if they did it correctly.

It’s hard to say the procedure has, in this instance, been anything but a nightmare scenario demonstrating how not to produce regulations, but the product we’re seeing, as one hopes we’re nearing the end, isn’t too bad and the best news is that we’re now on a 90-day schedule.  Let’s take a look at some of the key features and lack of features.

First, despite all the hype resulting from some very obtuse language in the SGEIS that was intended to fudge the rules regarding local government involvement in decisions, the language of the regulations is pretty simple:

Section 560.3(e)(3)

The department shall provide or cause to be provided the applicant’s name, well name and number, and location coordinates of the well to the supervisor of the town or the mayor of the village or city, as the case may be, or any other point of contact designated, in a manner prescribed by the department, by the municipal governing board to the department for receipt of applications under this Part.

There is no particular provision for “home rule” here; just the normal notification to municipal governing bodies who may want to offer input on the application.  This is no different than most DEC applications.

Then, there are the setbacks, which are greater than previously suggested, and possibly difficult in a few instances, but certainly not impossible.

Section 560.4

(a)  No well pad or portion of a well pad may be located:

(1)  within 500 feet from a residential water well, domestic supply spring or water well or spring used as a water supply for livestock or crops;

(2)  within 500 feet from an inhabited dwelling or place of assembly;

(3)  within a primary aquifer and a 500-foot buffer from the boundary of a primary aquifer;

(4)  within a 100-year floodplain; and

(5)  within 2,000 feet of any public water supply (municipal or otherwise, or the boundaries of any public water supply reservoir, natural lake or man-made impoundment (except engineered impoundments constructed for fresh water storage associated with fracturing operations) .

(b)  All distances noted above are measured from the closest edge of the well pad.

Many leases include 500 feet setbacks similar to these, so these are workable.  They also represent a distinct improvement over some lower standards that currently apply (as low as 150 feet in some cases).  These have drawn the ire of our anti-gas friends as examples of what they perceive as the horrors of natural gas development, although setbacks, in practice, are typically more in line with the proposed standards.  Raising the required setbacks takes away that argument and is reasonable, although I’m sure our opponents will now raise the ante, as they always do.

Another popular concern of anti-gas advocates is the use of open pits for storing flowback, a practice we have long noted is now discontinued in our region and essentially ruled out by the SGEIS language.  Our opponents, of course, always seize on the exceptions rather than the rule, but the wording of the proposed regulations is both simple and direct.  It only allow pits as exceptions and only for cuttings that get buried on-site, which means they are non-hazardous.  Flowback fluids will be captured via a closed loop tank system, just as we have maintained all along.

Section 560.6(c)(7)

A closed-loop tank system must be used instead of a reserve pit to manage drilling fluids and cuttings for any of the following:

(i) horizontal drilling in the Marcellus Shale unless an acid rock drainage mitigation plan for on-site burial of such cuttings is approved by the department; and

(ii) any drilling requiring cuttings to be disposed of off-site.

So much for the arguments about “frack pits.”  They won’t have a role in New York State any more than they do in the Pennsylvania portion of our region along the Northern/Southern Tier.

Disclosure of hydraulic fracturing fluids is also addressed:

Section 560.3(d)

(1) With each application for a permit to drill, deepen, plug back or convert a well subject to this Part, the owner or operator, directly or through a service company and/or chemical supplier(s), shall provide the following information on a department-approved form, except paragraph (vii) which shall be provided as a separate attachment:

(i)  proposed volume of each product to be used in hydraulic fracturing;

(ii)  identification of each additive proposed for use, listed by product name and a brief description of its function,;

(iii)  a Safety Data Sheet or Material Safety Data Sheet, as appropriate, for each product to be used if the current version is not already on file with thedepartment;

(iv)  proposed percent by weight of base fluid, each additive and proppants, if used;

(v)  identification of all chemical constituents, by chemical names and associated CAS Numbers, to be intentionally added to the base fluid (which may be submitted in a format that does or does not correlate the chemical constituents to the respective products);

(vi)  the proposed actual or maximum concentration of each chemical constituent intentionally added to the base fluid, expressed as a percent by mass of the total volume of hydraulic fracturing fluid to be used;

(vii)  identification of the proposed hydraulic fracturing service company; and

(viii)  documentation, to the department’s satisfaction, utilizing existing data and studies, that proposed additives exhibit reduced aquatic toxicity and pose at least as low a potential risk to water resources and the environment as all known available alternatives; or documentation, to the department’s satisfaction, that available alternative products are not effective in achieving the desired results or economically feasible. The owner or operator must use proposed additives that satisfy the foregoing requirement.

(2)  The department will disclose to the public the information submitted pursuant to paragraph (1) of this subdivision except that owner or operators or other persons who supply information subject to paragraph (1) of this subdivision may request such records to be exempt from disclosure as trade secret as provided by Part 616 of this Title. Records determined by the department to be exempt from disclosure shall not be considered a well record for purposes of disclosure.

(3)  To the extent that information considered trade secret has already been submitted to the department, whether in connection with a prior application for a permit to drill, deepen, plug back or convert, or otherwise, the prior submission may be referenced in the information submitted pursuant to paragraph (1) of this subdivision, in lieu of submitting duplicative trade secret information.

(4)  Sharing of information among well owners, operators, service companies and chemical suppliers. Each involved well owner, operator, service company and/or chemical supplier shall supply accurate information to the entity submitting information pursuant to paragraph (1) of this subdivision to facilitate compliance with paragraph (1) of this subdivision. Nothing herein shall preclude agreements between or among the well owner, operator, service company and/or chemical supplier to preserve the confidentiality of information that is required to be submitted to the department. Nothing herein shall require the well owner, operator, service company and/or chemical supplier to disclose trade secret information to one another, as such information can be disclosed directly to the department, on the department-approved form, by any of the entities.

Once again, we can expect natural gas opponents to seize upon the exceptions, but these procedures are the same as used in other states and in almost every other case with respect to proprietary information. We addressed this in an earlier post but it’s worth noting something else as well.  It is this; these provisions are very similar to those proposed in the “Frac Act” endorsed by so many of our opponents. This is what that proposed legislation, flawed as it is, says, in fact (at page 554);

…the person using hydraulic fracturing shall immediately disclose the proprietary chemical formulas or the specific chemical identity of a trade secret chemical to the State, the Administrator, or that treating physician or nurse, regardless of the existence of a written statement of need or a confidentiality agreement.  The person using hydraulic fracturing may require a written statement of need and a confidentiality agreement as soon thereafter as circumstances permit.

The proposed New York State regulations on hydraulic fracturing, therefore, incorporates full disclosure in the same manner as our friends on the other side have requested.  They should be happy, right?  Well, let me wish myself good luck with that. Being a fractivist, of course, means never being happy.  But, I am ever hopeful.

The regulations also provide for recycling and waste disposal.  Here’s the relevant language:

Section 554.1(c)(1)

Prior to the issuance of a [well-drilling] permit [for any operation in which the probability exists that brine, salt water or other polluting fluids will be produced or obtained during drilling operations in sufficient quantities to be deleterious to the surrounding environment,] to drill, deepen, plug back or convert a well, or for any operation reported to the department on the Sundry Well Notice and Report form that requires pre-approval from the department the owner or operator must submit and receive approval for a plan for the environmentally safe and proper ultimate disposition and/or disposal of [such] used drilling mud, flowback water and production brine. [For purposes of this subdivision, drilling muds are not considered to be polluting fluids.] The owner or operator must state in its plan that it will maximize the reuse and/or recycling of used drilling mud, flowback water and production brine to the maximum extent feasible. Before [requesting] approving a plan for disposition and/or disposal of such fluids, the department will take into consideration the known geology of the area, the sensitivity of the surrounding environment to [the polluting] such fluids, and the history of any other drilling operations in the area. Depending on the method or methods of disposal chosen by the [applicant] owner or operator, a permit for discharge and/or disposal may be required by the department in addition to the [well-drilling] permit to drill, deepen, plug back or convert a well. An [applicant]owner or operator may also be required at the department’s discretion to submit an acceptable contingency plan, the use of which shall be required if the primary plan is unsafe or impracticable at the time of disposition or disposal.

This language clearly recognizes what’s happening in the field.  Gas companies are now routinely recycling up to 100% of their flowback and produced water, as we have discussed and illustrated here numerous times.  DEC is going to require what is essentially already best industry practice.

These are some of the most important aspects of the new regulations and they are practical.  It all makes you wonder; what took so long.  Well, New York politics involves a lot more heat than light but always some of both. That’s about the best explanation I can offer. I’ve been working with New York communities since the early 1970’s, almost as long as Charlie Watts has been pounding those drums. We’re both a lot older now (althougb he’s way older than me) but, otherwise, things are still the same. We’ve both lost a lot of our hair, however. It must be those hot lights and all those New York concerts and meetings.


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