Oil and Gas Lawyer Blog
The New York State Department of Environmental Conservation (DEC) has been engaged in a comprehensive review of the potential environmental impacts of development of the Marcellus Shale in New York since 2008. The DEC is the regulatory agency in New York responsible for issuing drilling permits and regulating oil and gas exploration and production. The DEC had previously studied the environmental impacts of hydraulic fracturing in 1992, at which time it issued a Generic Environmental Impact Statement recommending certain safeguards in that practice. In 2009, the DEC issued for public comment a “Draft Supplemental Generic Impact Statement” analyzing the impact of hydraulic fracturing of horizontal Marcellus wells. As a result of comments received, the DEC has issued a revision of that draft report, which will be finalized later this year and again issued for public comment. During this study, New York has imposed a moratorium on issuance of any permits for horizontal wells in the Marcellus Shale.
The Marcellus extends over a huge area from West
Virginia through Pennsylvania and covers a substantial part of New York
State. Potential Marcellus reserves in New York are huge, and
exploration companies have leased huge areas in New York for
exploration. New York landowners have watched impatiently as wells have
been drilled in Pennsylvania, while environmental activists in New York
have opposed any drilling in that state.
The most recent version of the New York DEC’s study
and recommendations is several hundred pages and provides a thorough
study of the potential impacts of drilling Marcellus wells on the
environment, including impacts on groundwater, surface water, air
quality and wildlife. The report proposes many revisions to DEC’s
existing regulations concerning the construction of well pads, the
drilling and casing of horizontal wells, the handling and disposal of
frac fluids and chemicals, the disposal of returned frac water and drill cuttings, the use of best available technology to reduce emissions from equipment during drilling and completion operations, and the protection of groundwater and surface water. The report discusses the current
state of technologies for use of fluids other than fresh water for
hydraulic fracturing and for the recycling of frac water. The authors
also discuss recent incidents in Pennsylvania of groundwater and surface water contamination from drillsites and their cause. There is a
comprehensive summary of the geology of shale formations and water
resources in New York.
Some of the report’s conclusions:
“[I]t is highly unlikely that groundwater contamination would occur by fluids escaping from the wellbore for hydraulic fracturing. … [N]o significant adverse impact to water resources is likely to occur due to underground vertical migration of fracturing fluids through the shale formations.”
Groundwater contamination by migration of methane from other formations encountered in drilling is a danger that must be addressed by proper well construction requirements – proper casing and cementing. The report notes that naturally occurring methane seeps into groundwater in New York, and that “methane contamination of groundwater is often mistakenly attributed to or blamed on natural gas well drilling and hydraulic fracturing. There are a number of other, more common, reasons that well water can display sudden changes in quality and quantity. Seasonal variations in recharge, stress on the aquifer from usage demand, and mechanical failures are some factors that could lead to degradation of well water…. The migration of methane can contaminate well water supplies if well construction practices designed to prevent gas migration are not adhered to.”
At peak development activity, drilling in the Marcellus in New York may result in 2,462 wells in a year and peak annual fresh water usage of 9 billion gallons. Total daily fresh water withdrawal in New York is 10.3 billion gallons, or 3.8 trillion gallons annually. “Based on this calculation, at peak activity high-volume hydraulic fracturing would result in increase demand for fresh water in New York of 0.24%.”
To mitigate potential adverse impacts of Marcellus development, the DEC recommends numerous measures, including:
No high-volume hydraulic fracturing (HVHF) operations in the New York City and Syracuse Watersheds. New York City and Syracuse rely on surface waters from a watershed in New York State and consume that water without treatment. The report concludes that significant drilling activity in the watershed, even without spills, could “result in the affected municipalities incurring substantial costs to filter their drinking water supply.”
No HVHF operations within the area of designated “primary aquifers.” These aquifers are the primary source of drinking water for many public drinking water supplies. Also, HVHF operations within the area of other “principal aquifers” will be prohibited for two years without special permits.
No HVHF operations on designated State lands with significant wildlife habitat.
No HVHF operations within designated floodplains or within 500 feet of private water wells.
A requirement for an intermediate string of casing in all HVHF wells, fully cemented to the surface.
All liquid and solid wastes generated in connection with HVHF operations would be tracked under a tracking system similar to that now required for medical waste.
Flowback water must be stored in watertight tanks, not in earthen pits, and must be removed from the drillsite within a specified time. The operator must file a plan for disposing of the flowback water and production brine before the well permit is issued.
Limiting venting of gas from any well pad to 5 mmcf per year. Limiting flaring of gas from any well pad to 120 mmcf per year.
Requiring at least two vacuum trucks to be on location “on standby” during the flowback phase of fracturing, in case a spill occurs.
Sampling and testing of all residential water wells within 1,000 feet of a location prior to commencement of operations, and at three months, six months and one year after hydraulic fracturing operations are completed.
It will be interesting to see if New York ever approves high-volume hydraulic fracturing in the Marcellus. Lifting of the moratorium still appears to be at least months away. The report discusses the alternative of making the moratorium permanent, and rejects it. It concludes that the benefits of increased gas production outweigh the environmental risks, and that “most of the potential significant adverse impacts … can be fully mitigated by the measures outlined” in the report. “a prohibition would also deny owners of mineral interests an opportunity to realize the benefit of mineral rights ownership.”