The following comments are to be considered preliminary in nature because I would like to see the comment period extended by at least another 30 days in order to digest and assess the numerous proposed regulations in the 800+ page document. It is my understanding that similar requests made by not only by chairman Sweeney, but also by the various groups that presented testimony at the October 15th, 2009 public hearing. The various outstanding issues listed below will undoubtedly highlight the need for an extended comment period and for Commissioner Grannis and the staff at Bureau of Oil and Gas Regulations to receive and act on substantive suggestions that come from the public, various groups of interest, the legislature, and the executive branch.

I. Ban in the NYC Watershed

The dSGEIS states that 70% of the watershed is privately owned and that the mineral rights belong to the various landowners within the region. It was stated by Commissioner Grannis during the hearing that he “believed” that denying landowners the right to develop their land posed “constitutional” issues and that it might pose legal problems for the state if such a ban were to be imposed.

I believe that in a case where 8 million New York State residents’ potable water supply is placed in jeopardy, and where New York City could potentially lose its Federal waiver of a filtration plant, there must be more time to explore every legal avenue and precedent regarding the regulation and use of that land.

The area constitutes only 10% of the viable land which could potentially yield gas and it would be imprudent and premature to engage in such an invasive operation on such a large scale in such a sensitive area. There have been too many reports of spills, accidents involving injuries, contamination of well water, blow-outs, pit overflows and pipe leaks that would justify a ban. Just recently, New Mexico released an executive order to place a moratorium on gas drilling because of reports of ground water contamination and reports have come out of Texas that areas that are engaged in gas drilling activities have experienced unusual seismic activity relative to the dormant seismic history.

It is easy to be nonchalant and to conform to the proverb “accidents happen,” but NYC cannot afford any accident within the watershed. The costs to our health and fiscal well-being are too great and could not be sustained in the face of an accident. The gas companies already have a poor track record with the reclamation of land out in western NY and I highly doubt they would place any special bonding requirements on themselves in the watershed to help pay for the multi-billion dollar filtration plant that would have to be built if a careless mistake is made. Those reasons alone justify a ban in the NYC watershed.

II. Waste Water Infrastructure and Processing

An issue of great concern comes from research conducted by members of Assemblyman Sweeney’s staff, which exposed the fact that out of all the waste water treatment facilities listed as potential sources of disposal, only three confirmed that they could receive such a volume. Testimony from the Sierra Club revealed that one company out in Chautauqua County had waited for a year to find a facility that could process their spent fluids, and that on the second disposal trip the tanker trucks were turned away because it did not have the capacity.

This is one company! What will happen when operations hit full peak statewide? This is an issue that dates back to comments made at the first hearing almost a year ago and it has not been resolved. It is crucial that the DEC knows exactly where each company is going to be disposing its fluids in order to monitor and prevent the companies from dumping it in unauthorized areas.

I would also like to know more about injection wells and whether or not they are a safe option for disposal. How many wells does New York have? Can seismic activity disrupt these wells and cause leaks? These questions might be answered in the dSGEIS, but I have yet to review the entire document.

Certainty in this area is crucial because the risks posed to the environment are greatest once the fluids are brought to the surface. Universal procedures and clearly defined destinations for these fluids are a must. Without these, the proposed natural gas drilling operations cannot move forward in a responsible manner.

III. Staffing Concerns

All of the effort and hard work that the Commissioner and his staff have put into crafting these regulations will go to the way side if there is not an adequate number of staff members to oversee and enforce the regulations. The public hearing revealed that currently the DEC has 17 people that can process drilling permits and oversee operations, while Pennsylvania currently utilizes 92. It’s nice to know that the DEC will use their resources with the utmost efficiency and effectiveness and slow the permitting process if it is necessary, but the problem is in post-supervision. There has to be adequate staff to ensure that drill pad operators and the gas companies are following the plans and procedures laid out in the permit. This includes monitoring water withdrawals which are outside of the SRBC and DRBC’s jurisdiction.

Assemblyman O’Donnell asked the question of whether or not the revenues from the permits and fees are enough to cover the cost of the oversight. Commissioner Grannis stated that economic analysis was not involved in the scope of the dSGEIS and that staffing concerns are a budgetary issue.

What I want, and what I would assume the rest of the legislators want, is an idea of whether or not you need more staff to carry out the immense responsibility the department is creating for itself at the behest of the executive, legislature and the people. We need a concrete “yes” or “no” for a request of more staff resources so that we can plan a way to pay for it leading up to the 2010-2011 budget cycle. The state’s current fiscal crisis requires a prompt decision for proper preparation and campaign to get the required resources.

From the breadth and complexity of the document I find it hard to believe that the DEC’s regulatory vision and plan for the drilling operations can be fulfilled without more staff. I believe that an estimation of staff resources is necessary, and if the DEC is unable to provide their own estimation, that the Division of the Budget or State Comptroller be consulted to provide an estimate or some report accessible to legislators. Without this information the legislature will not be able to make substantive recommendations to help assist the department.

IV. Fracture Fluid Testing

I believe that the fracturing fluid should be tested by an independent source outside of the industry to verify their claims on the application. The independent source should be selected by the department in conjunction with the DOH and it should be paid for by the gas companies. Transparency and accountability is crucial in gaining the public’s trust if this project is to proceed and we cannot just rely on the industry’s assessment. The industry has every interest in maintaining costs; their bottom line is profit, not the people. The people are the state’s bottom line, and we must ensure them that their health and environment will be protected and that the chemicals are not carcinogenic.

V. Cumulative Impact Study

Assemblyman Sweeney and numerous environmental groups expressed disappointment over the lack of a cumulative impact study in the dSGEIS. Commissioner Grannis stated that one was not necessary because of the spacing bill that was passed during the waning days of the 2008 session. Horizontal drilling does pose less surface disruption in terms of the number of well pads that have to be constructed, but the peripheral operations such as diesel truck emissions, methane flaring, potential for vapor released from the lined (but open) pits, and the cumulative effects of water withdrawal from sources outside the SRBC and DRBC jurisdictions, all combine to create a footprint on the environment.

VI. FHA Financing and Gas drilling

My staff came across this HUD regulation which deals with gas drilling permits. According to the HUD Handbook 4150.2 pgs. 2-7 states that, “No existing dwelling may be located closer than 300 feet from an active or planned drilling site. Note that this applies to the site boundary, not to the actual well site.” A property with a gas or oil lease is therefore, not eligible for FHA financing.

This is one issue that was not brought up during any of the hearings and I know it is out of the scope of DEC but it should be duly noted. How might this affect adjacent property owners that will not benefit from drilling but might be within 300 feet of the site boundary?

VII. Conclusion

In conclusion, I would like to stress the importance of a ban in the NYC watershed. There are too many risks involved and no matter how safe the industry says horizontal drilling is the inevitability that a human error will occur is not acceptable in the unique case of the watershed. Please consider the concerns that I have raised because they are issues which are shared by many of the groups that have been involved in the process.

If you require a clarification of any of the issues or questions I have raised here, do not hesitate to contact my Albany office (518) 455-5828.

I am resolute in my conviction that Commissioner Grannis and his dedicated staff will do their best to make sure that the residents of New York State will be protected from any adverse environmental and health effects posed by gas drilling.