Posted By James J. Periconi, Esq. on December 19, 2011
We’ve discussed proposals from the State and Federal governments for the regulation of high-volume horizontal hydraulic fracturing of shale for natural gas (i.e., “fracking”), but there is another level of authority that has something to say about fracking operations in New York State – the Delaware River Basin Commission. This post will discuss the proposed amendments to the Commission’s Water Quality Regulations which would regulate fracking in the Delaware River Basin, as well as the New York State Attorney General’s lawsuit regarding the Commission’s proposed regulations.
What is the Delaware River Basin Commission?
The Delaware River begins in Schoharie County, New York and flows south along the border between Pennsylvania and New Jersey and eventually empties into the Delaware Bay. It provides much of the (unfiltered) drinking water supply for New York City, parts of New Jersey, and the Philadelphia region, as well as parts of Delaware. In New York, the Delaware River Basin is underlain by the Marcellus Shale Formation, and thus, is a prime area for fracking operations. Given the concern over the association of fracking with contamination of aquifers and drinking water wells, regulation of fracking in this area takes on some importance.
Since at least the early 1900s, there has been much fighting between New York/New York City, New Jersey, Pennsylvania, and Delaware over the apportionment of the water from the Delaware River. Unable to resolve the issue of “equitable apportionment” through litigation (including multiple cases before the Supreme Court of the United States), the states eventually settled their dispute through an interstate compact.
This interstate compact, signed by President John F. Kennedy in 1961, created the Delaware River Basin Commission (“DRBC”), which is a federal governmental agency comprised of the four state governors and a federal representative appointed by the President. According to the DRBC website, the purpose of the DRBC is to bring the Delaware River under collective and balanced control, and to ensure fair usage by the states; to this end, the DRBC conducts programs related to water quality protection, water supply allocation and water conservation, regulatory review and permitting, watershed planning, drought management, flood mitigation and loss reduction, and recreational activities (e.g., fishing and boating).
The DRBC has promulgated Water Quality Regulations that apply specifically to the Delaware River. It is under these Water Quality Regulations which the DRBC has proposed new regulations to place limitations on natural gas development projects within the Delaware River Basin.
DRBC Proposed Fracking Regulations
On December 9, 2010, the DRBC published draft regulations that would apply to “natural gas development projects” as defined by the regulations, including fracking operations. After accepting public comments over an extended comment period, the DRBC revised its proposed draft regulations (published on November 8, 2011). The DRBC originally planned to vote on these revised proposed amendments on October 21, 2011, but postponed the vote for one month. On November 21, 2011, the DRBC again postponed its vote on the revised amendments, stating that it needed more time to study the issues. At this time, no vote by the DRBC to adopt these proposed regulations has been scheduled.
These proposed fracking regulations (available here) are to be incorporated into the DRBC’s Water Quality Regulations as Article 7.
The new Article 7 fracking regulations would provide the following: the purpose, authority and scope of the rule (section 7.1); definitions (section 7.2); administrative processes (section 7.3); water sources and conditions of bulk water use and management approvals for natural gas development projects (section 7.4); the protection of high value water resource landscapes and DRBC-designated Special Protection Waters through mandatory Natural Gas Development Plans for lease holdings of 3,200 acres or more and for all project sponsors who intend to develop more than five well pads (section 7.5); and the transfer, treatment and discharge of wastewater generated by natural gas development activities (section 7.6).
In order to maintain regulatory efficiency and to curb any confusion, the DRBC will rely on the oil and gas program of the state in which a natural gas well is located to regulate the construction and operation activities of the natural gas well and well pad. If a state or federal regulatory requirement is more stringent than a DRBC requirement, the more stringent (i.e., state or federal) regulation will apply.
While the DRBC’s fracking regulations are an important addition to the regulatory framework, what do they really add to the conversation on fracking in New York? It is clear that New York State’s own regulations will be what regulates the construction and operational activities of fracking in New York. And the EPA is attempting to publish its own regulations regarding produced and flowback wastewater issues. So what, if anything, do the DRBC fracking regulations add?
The proposed fracking regulations would apply to “all natural gas development projects [whether singular or interconnected] including the construction or use of production, exploratory or other natural gas wells in the [Delaware River] Basin regardless of the target geologic formation, and to water withdrawals, well pad and related activities, and wastewater management activities comprising part of, associated with or serving such projects.”
Thus, the new fracking provisions in the DRBC Water Quality Regulations do address some issues not otherwise covered by either the State or Federal agencies, such as:
• Regulating freshwater withdrawal from the Delaware River Basin and requiring bulk water use and management approvals.
• Requiring Natural Gas Development Plans for the protection of “high-value water resource landscapes and special protection waters.”
• Requiring financial assurances.
Moreover, the DRBC regulations apply not only to fracking (i.e., high-volume, horizontal hydraulic fracturing), but all types of natural gas development, and they cover construction of all wells, even exploratory wells; these issues are not otherwise addressed both any governmental agencies.
But the DRBC’s proposed regulations are also very limited in scope: they would only apply to the lands within the DRBC’s jurisdiction — leaving out a good part of the total Marcellus Shale formation – and would only address matters that may affect the water resources of the Delaware River.
New York State Sued DRBC for Environmental Review
On May 31, 2011, the New York State Attorney General filed a lawsuit against the DRBC for its failure to commit to a full environmental review of the proposed regulations. Like under SEQRA (discussed in our previous blog ), the National Environmental Policy Act (“NEPA”) requires any federal governmental action, including regulation, that will “significantly affect the environment” to perform an environmental review. The DRBC, being a federal agency, has not undertaken an environmental assessment of an environmental impact statement which would analyze the impact of its proposed regulations on human health and the environment.
Indeed, Attorney General Eric Schneiderman stated that the November 8, 2011 revised DRBC regulations still fail the federal mandate that requires the DRBC to take a “hard look” at the environmental impacts of allowing fracking in the Delaware River Basin:
“By issuing these modified draft regulations, the federal government continues to ignore New Yorkers’ concerns about the impact fracking may have on our environment, health and homes. Though modified, these regulations still lack the benefit of a full environmental impact study, which is required by law and dictated by common sense. Without it, the federal government does not have a complete understanding of the health and safety risks fracking poses, even as it stands to open up the Delaware River Basin to thousands of new gas wells. These regulations are both inadequate and illegal, and I will continue to use the full authority of my office to require that the federal government meet its clear legal obligation to fully study the environmental impacts of fracking in the Basin.”
As for the DRBC’s postponement of its November 21, 2011 vote on the proposed fracking regulations, Attorney General Schneiderman stated:
“This delay further demonstrates that the proposed regulations for fracking in the Delaware River Basin are not ready to see the light of day. Without a full, fair and open review of the potential risks of fracking in the Basin, the public will continue to question the federal government’s ability to protect public health and environment. . . .”
As the controversy in New York State has mainly focused on the DEC’s environmental review and proposed fracking regulations, the DRBC’s proposed regulations have been relegated to the background. Nevertheless, these regulations are important to whether fracking will be allowed in New York State – and if so, in what form – and based on the sheer volume of public comments received by DRBC over the past ten months (approximately 18 hours of oral comments and 69,000 written comments), we would not be surprised to see litigation challenging the DRBC’s regulations, if adopted. Also, because the DRBC is an interstate, federal agency, legal challenges to the DRBC’s proposed fracking regulations could come from any one of the four affected states.
As part of our “Fracking NY” blog series, we will keep you updated on any developments regarding the DRBC’s proposed Water Quality Regulation amendments, including developments with the New York Attorney General’s lawsuit.
Our next post in the Fracking NY blog series will highlight some of the litigation to-date surrounding fracking in New York, and the possible litigation we expect to see in the future.