When it comes to hydrofracking, Governor Cuomo is in trouble, and he knows it. In January, the Department of Environmental Conservation (DEC) received more than 66,700 public comments on the environmental review (SGEIS) and proposed regulations for the controversial natural gas extraction technique, high-volume horizontal hydraulic fracturing (HVHHF).
This record-breaking public rebuke largely panned the entire process— by a margin of 10 to 1—as incomplete, improper and unwise. Aside from having to wade through tens of thousands of comments, some of which are lengthy and technical, the DEC has a long list of obligations it must attend to before it can finalize the new regulations.
Among the outstanding deficiencies, the DEC must still:
• conduct a cumulative impact analysis of the 65,000 projected gas wells in a full build out scenario,
• redraft its socioeconomic analysis to reflect the true costs of drilling borne by host communities,
• initiate a health risk assessment for public exposure to fracking operations, and
• devise a comprehensive plan for disposal of the projected billions of gallons of wastewater and drill cuttings.
And it’s not just the public asking this of the Cuomo administration — the federal Environmental Protection Agency, in its own comments to the DEC, requested the same critical analysis before any further steps toward permitting are taken.
How does the governor respond? His office has expressed a firm commitment to finalize the entire process in the spring of 2012, which is only a few weeks away. While it seems inconceivable that any substantive progress can be made on any of these issues with this impossible deadline, the governor is driven by commitments to his original goal of establishing a robust HVHHF program in New York—which is consistent with his narrative as a bipartisan, economic leader and presidential candidate in 2016.
Cuomo’s political identity on hydrofracking hinges on finding a timely compromise between advancing drilling and protecting the environment, even though he now fully realizes that there is an irreconcilable conflict between these two goals. In this context, what makes this rush forward even more galling is that the current glut of natural gas on the market will make drilling uneconomical in New York for years to come.
In the height of the 2007-2008 leasing craze, gas was worth $10.79 per thousand cubic feet at the wellhead. Today the price has plummeted to below $2.00 and may take several years to recover in value as shale gas states with even weaker environmental standards continue to drill. Gas prices have to be in the neighborhood of $5-6 per thousand cubic feet for a gas well in New York to break even on the projected drilling costs. So why advance a half-baked regulatory program now, if market forces will keep drilling to a minimum anyway? Why not take this time to conduct the necessary studies?
The cynical explanation is that many of the gas leases signed in 2007 are expiring, and in order for the gas companies to force extensions of these agreements they have to demonstrate some significant action — such as the acquisition of a permit to drill or the clearing of a well pad. It is these early leases that have the most value to the drillers because they come with low royalty rates and per-acre bonuses. An accelerated finalization of the SGEIS and issuance of permits could preserve what many have deemed as a mass scam of thousands of landowners who signed away their mineral rights for very little in return.
Industry pressure on the Cuomo administration may be driving the train on the expedited schedule, but the fallout from advancing a regulatory program will substantially harm New York’s environment and shortchange its apparent beneficiaries. As a governor who values his image as a progressive, that must be giving Cuomo some political heartburn.
The conventional wisdom is that the governor must approve some form of drilling in New York or fail to advance on the national stage, where “drill baby drill” is still the mantra. But Cuomo still could emerge as that rare politician who realizes that the tenuous future of our fragile planet relies on our ability to embrace renewable and efficiency technologies —leaving behind our extractive past. Rejection of hydrofracking in New York in favor of a strong renewable energy program could be a powerful springboard to make that case.
There also seems to be some acknowledgement from DEC staff that the issue of HVHHF will end up in the courts sooner or later, so the move to finalize the SGEIS in the spring is only the next step in what could be a drawn out process. If the fate of fracking shifts to the courts, the pressure will be off the governor’s office. The litigation phase of the SGEIS may yield stronger adjudicated mandates—for further DEC study, stronger mitigations and possible prohibitions—but, depending upon judicial temperament, it could also abruptly begin New York’s premature path to drilling. The Sierra Club Atlantic Chapter is gearing up to meet that challenge if the DEC does indeed move forward with fracking. Please consider contributing to the Chapter’s drilling litigation fund.
The good news is that the Cuomo Administration has rejected earlier intentions to fund new fracking regulatory infrastructure through the budget process and the current 2012-13 executive proposal is devoid of the staffing increases and funding mechanisms required to advance HVHHF. Without these expenditures, which could mean hundreds of new staff and hundreds of millions of dollars in infrastructure costs, drilling cannot substantially advance. While this is a relief, there are other concerning provisions to the executive budget that could end the current reprieve.
The emperor’s new prose
Based upon the guidance of the Spending and Government Efficiency Commission, the proposed 2012-13 Executive Budget contains a 130-word paragraph, replicated hundreds of times throughout every appropriations section, granting transfer authority to the governor to shift unlimited funds from one agency to another and to grant and extend contracts with private firms for goods and services.
The Atlantic Chapter is gravely concerned that this language gives unilateral power to the executive office and largely transforms the current state budget process into a meaningless exercise, where the governor will have the authority to move limitless funds between any and all state agencies after the Legislature has approved the budget.
Clearly, it is hard to conceive that the Senate and Assembly will in the end grant this power to the governor —but the underlining forcefulness and saturation of this language throughout the Executive Budget proposal suggests that some semblance of this authority to streamline government operations will remain after the final budget negotiations.
While the governor maintains this new authority will be used to responsibly consolidate agency redundancies and provide timely funding solutions to unanticipated financial gaps to essential operations, we fear that it could also lead to the removal or the de-funding of crucial environmental programs that may be unpopular with shortsighted business or industrial interests. Even worse, it could allow the governor to construct a $100 million fracking program out of thin air without the Legislature’s consent. In concert with other organizations, the Sierra Club is asking the Legislature to reject this transfer authority and work with the SAGE Commission recommendations—within the budget process—to achieve transparent government
efficiency without compromising basic democratic principles.
Atlantic Chapter’s legislative priorities for 2012
Hydraulic Fracturing Prohibition Bill (A.7218-A Colton/S.4220-A Avella): This bill prohibits the use of hydraulic fracturing in the extraction of oil and gas in NYS until the Legislature determines the practice can be conducted safely. This bill also prohibits the disposal of drilling wastes in publicly-owned treatment works.
One Year Moratorium on Hydrofracking (A.7400-A Sweeney/S.6261 Ball): While the DEC is currently studying the environmental impacts associated with fracking, there is no guarantee that the Division of Mineral Resources will not press ahead with permitting by the end of 2012. This bill will suspend all permitting until June 1, giving one legislative session for lawmakers to review the final findings of the SGEIS.
Classifying Fracking Waste as Hazardous (A.7013 Sweeney/S.4616 Avella): Even though fracking chemicals arrive at the drilling site as regulated hazardous materials, federal and state exemptions allow drillers to treat the same drilling wastes leaving the site as standard industrial waste. This bill will update current regulations so that all waste from natural gas drilling that meets the definition of hazardous waste in New York law will be subject to all generation, transportation, treatment, storage and disposal laws and regulations. This bill has been especially pressing as an increasing waste stream from Pennsylvania is already coming into New York.
Affirming Local Protections Over Natural Gas Development (A.3245 Lifton/S.5830 Seward) (not same as): This bill clarifies that local governments retain the right to enact and enforce zoning laws of general applicability with respect to land use within their jurisdiction when confronted with the negative impacts from oil and gas development. The burden of oil and gas development is an unfunded mandate on upstate communities if they are not allowed to use the most basic land-use planning tools to protect unique local assets.
New York Solar Industry Development and Jobs Act of 2012 (A.9149 Englebright): This bill will enable the rapid and sustainable development of a robust solar power industry, creating a scalable, diverse and competitive solar energy market. The program includes targets to achieve at least 5,000 megawatts (MW) of solar PV capacity in the state by 2025, with interim targets of at least 500 MW by 2015 and 1,500 MW by 2020.
Global Warming Pollution Control Act (S.2742-B Avella/A5346 Sweeney): This bill requires an 80% reduction of greenhouse gas emissions from all sources by 2050, as recommended by the Intergovernmental Panel on Climate Change. If enacted, it will be the strongest carbon cap legislation in the country.
Clean Water Protection/Flood Protection Act (A.3374 Sweeney/S.4617 Avella) (not same as): Hundreds of wetlands are at risk of destruction in New York because they are not protected under state or federal laws. This bill would close a regulatory gap created by the Supreme Court’s 2001 SWANCC decision, giving New York regulatory authority over wetlands of one acre or more.