Testimony by New York State Senator Duane before the the New York State Department of Environmental Conservation Regarding the Draft Supplemental Generic Environmental Impact Statement on the Oil, Gas And Solution Mining Regulatory Program

November 10, 2009

My name is Thomas K. Duane and I represent New York State's 29th Senate District, in which more than 300,000 residents and countless businesses depend on clean and safe tap water. Thank you for the opportunity to present testimony before the New York State Department of Environmental Conservation (DEC) on the draft Supplemental Generic Environmental Impact Statement on Well Permit Issuance for Horizontal Drilling and High-Volume Hydraulic Fracturing to Develop the Marcellus Shale and Other Low-Permeability Gas Reservoirs (dSGEIS).

While I have many concerns regarding the dSGEIS, which analyzes the impacts of what is arguably the most significant encroachment of industry on our natural environment and greatest threat to our public health in decades, I will focus my testimony on a few key issues.

As you know, hydraulic fracturing is a process by which millions of gallons of water and a slurry of toxic chemicals, or "frac fluids," are pumped at high-pressure into horizontal wells to access bubbles of natural gas in dense mineral formations. While the dSGEIS demonstrates that the agency has studied the catastrophes associated with natural gas drilling around the nation, the proposed mitigation measures do not go far enough to ensure that New York will not suffer a similar fate. The document highlights potential impacts on water resources, including contamination by: stormwater runoff, surface spills and leaks, pit or surface impoundment failures, improper waste disposal, and well drilling and construction. Yet, DEC has determined that with a number of proposed mitigations,1,077 square miles, or approximately 70%, of the New York City watershed in the Catskills and Hudson River Valley could be developed for natural gas production. It is inconceivable and unacceptable that the dSGEIS does not include a ban on high-volume hydraulic fracturing in and around New York City's watershed and, crucially, all water supplies statewide.

The New York City Department of Environmental Protection (DEP) commissioned a Rapid Impact Assessment Report to study the potential environmental impacts of natural gas production in the City's watershed and found that even effective regulation and inter-agency coordination cannot eliminate the significant risk to our water supply. As you know, it is because of DEP's aggressive protection of New York City's watershed that since 1993, the U.S. Environmental Protection Agency has granted the City a Filtration Avoidance Determination (FAD) that exempts it from having to construct and operate a multi-billion dollar water filtration system, which we as taxpayers and ratepayers cannot afford, especially in this time of economic hardship. Steven W. Lawitts, Acting Commissioner of DEP, has said the loss of the FAD would result in a 30% increase in the price New York City residents pay for water and sewer service.

While DEP's exceptional oversight has kept our tap water clean and safe, advocates are concerned that hydraulic fracturing will result in contamination of our watershed that will render our tap water, with or without a filtration system, unfit to drink. The damage would be crippling to New York City, the primary economic engine of the State, and to those who live and work here. There is ample evidence linking this type of drilling to contaminated wells and streams in other states. We cannot accept this threat to public health; we must assume a no-risk policy and prohibit such drilling in this watershed.

The Chesapeake Energy Corporation's announcement that it will not drill for natural gas within New York City's watershed is a welcome commitment, but it is by no means sufficient to protect this watershed, let alone the State's other water supplies located in the Marcellus Shale formation. Voluntary measures by industry are no substitute for strong government regulation eliminating the very real risk of contamination to New York's drinking water.

Let me be clear: protecting the City's watershed is imperative, but other water supplies in and around the Marcellus Shale – including the Delaware River watershed, which serves a number of towns and major cities – would also be threatened by high-volume hydraulic fracturing. In states such as Texas, Colorado, and Pennsylvania, where such drilling has been permitted, there have been alarming reports of drinking water contaminated by frac fluids and newly-exposed underground toxins. To ensure that similar incidents do not contaminate drinking water in New York State, DEC must establish a no-risk policy that protects not only major watersheds, but all aquifers and even private wells.

I also object to the dSGEIS's apparent hasty dismissal of alternative actions concerning oil and gas resource development in New York State. Specifically, the dSGEIS deems phased-permitting "not practical or necessary," citing DEC's inability to predict the number of wells which will be drilled and its consequent inability to predict regional cumulative impacts. Many natural resources and environmental authorities suggest DEC could control for both of these unknowns by implementing a dynamic phased-permitting plan that accounts for unused permits and changing cumulative impacts. They argue that initiating drilling in the Marcellus Shale at a relatively slow and steady rate would serve to allay concerns that DEC does not have the staff and resources to properly review permit applications, inspect well sites, and oversee drilling operations. It would also enable DEC to ensure that existing wastewater treatment facilities have sufficient capacity to receive and process the enormous quantities of wastewater that will inevitably be produced by the industry. I urge DEC to reconsider this alternative.

I am also concerned about the fiscal impacts of drilling on local governments. DEC currently places responsibility for investigating complaints about water quality in private wells with county health departments. Such complaints will inevitably increase within the drilling area following the advent of high-volume hydraulic fracturing. However, unlike the State, local governments would not benefit from income tax revenue generated by the proposed action, making such investigations, in essence, an unfunded mandate.

Lastly, I am concerned that the dSGEIS does not explicitly define repercussions for natural gas drillers that commit infractions. The document goes only so far as saying that "observed leak...into a surface water body" will prompt DEC to "consider the need" to implement disciplinary measures. These measures should be clearly stated in the final SGEIS and drilling companies should be made fully aware of the consequences of the mismanagement of wells. In addition, DEC should consider using financial penalties imposed upon these companies to offset any costs associated with such drilling incurred by local governments.

I thank DEC for holding this hearing and I look forward to continuing to work with the agency to ensure that the proposed drilling for natural gas in the Marcellus Shale does not proceed without adequate regulatory protections for our precious natural resources.

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