Regs or Rigs?

Reluctant Regulator

The oil and gas industry in New York State is only barely regulated.

The Division of Mineral Resources (DMN) of the Department of Environmental Conservation is using regulations written largely in 1972, shortly after it was created. The only new regulations since then were written in 1986, dealing with the unusually high gas pressure found in the Bass Island Trend in westernmost New York. There were also revisions in 1985 in response to the oil and gas pollution of many water wells in western New York. But no new generally applicable regulations have been written into law in forty years.

The existing Generic Environmental Impact Statement (GEIS) and the work-in-progress Supplemental GEIS are only guidance documents, and their recommendations are unenforceable unless codified into regulations.

The GEIS finalized in 1992 was never promulgated into regulations. The IOGCC/EPA review of DEC oil and gas regulatory programs faulted the DEC for this:

“DMN rules require substantial upgrading to reflect current statutory directives, program policies, and state-of-the-art improvement in E&P waste management. Some of these areas requiring improvement are discussed in the GEIS …” (Finding I.1).

Subsequently, regulations were proposed and public workshops were held in October of 1997, but nothing was finalized. These proposed regulations were revised in 2000, but again failed to make it into the code book.

(See TALES OF ALBANY for the story of this paper’s attempt to obtain a copy of those proposals.)

Back in the 1980s, the DMN was required to write the GEIS by passage of the State Environmental Quality Review Act in 1978. In 2008, the act setting the size of drilling units for the Marcellus shale was passed without a SGEIS. At the time, the DMN assured the state legislature that

“adequate state regulatory programs [are] already in place.”

The DMN undertook writing the SGEIS only after Governor Paterson demanded it, imposing an informal moratorium until it was completed.

The SEQR Act provides that a government agency can attach conditions to a permitted action. For example, to accommodate a particular problem. Since 1986, the DMN has issued no regulations applicable to the gas industry statewide but instead attached a growing list of such conditions to each and every drilling permit issued for individual wells.

From the public’s perspective, regulations are much better than permit conditions for overseeing the oil and gas industry. Preliminary regulations are reviewed in public hearings before they are adopted; permit conditions are not. Final regulations are all published in New York State Codes, Rules, and Regulations. Again, permit conditions are not. Existing regulations can only be changed with public review – not so, with permit conditions. Industry and the DMN may prefer permit conditions for these very reasons.

On the DEC website, scattered permit conditions are posted, but nothing like a comprehensive list. With permit conditions, the public can not be sure what is being required of industry, nor can we judge how successful the DMN has been in protecting our environment.

State regulation is vitally important. State statute preempts local governments from any regulation of the operation of the oil and gas industry under Environmental Conservation Law Article 23, Section 0303(2). Most shocking of all, federal statutes exempt the oil and gas industry from federal regulation by part or all of numerous statutes including the Clean Air Act, National Environmental Policy Act, Safe Drinking Water Act, Resource Conservation & Recovery Act, Comprehensive Environmental Response, Compensation, & Liability (Superfund) Act, and Emergency Planning & Community Right-to-Know Act. Therefore, state regulation is virtually all that’s left to protect us from the oil and gas industry — and that is the way the industry wants it: a letter of Septermber 2nd from the Independent Oil and Gas Association of New York to the DEC requests that the status quo continue without new regulations.

How effective has the DMN been with this hybrid application of older regulations and newer permit conditions? No one knows, at least not outside of the DMN and industry. Although both claim an excellent environmental record, neither presents data either to support those claims or to refute the many public complaints.

The DMN publishes an annual report of several dozen pages. Nowhere within that sea of statistics is even a mention of incidents of oil and gas pollution that year. The DMN has records of responses to “non-routine incidents,” but attempts to obtain copies under the Freedom of Information Law (FOIL) have been rejected because the records are “on paper in dead storage and impractical to retrieve,” according to the Office of the General Council. By contrast, the DMN maintains searchable databases, accessible on the internet, for wells, formations, fields, production, companies, and transfers. (Ironically, this Risk-Based Data Management System was financed by DOE through the Ground Water Protection Council to protect and conserve underground sources of drinking water.) While the most recent annual report (2009) cites $40,000 in fines — in an industry that grosses a hundred million in New York — it lists neither what incidents caused these fines nor which companies were responsible.

The DEC maintains a database of all reports to its spill hotline. Since 1978, there have been over 350,000 reports. The DMN has never issued a compilation of incidents caused by the oil and gas industry. An environmental consulting firm, Toxics Targeting, has done a search of those spill reports and found 270, and that search did not include the early years, 1978 to 1985. There are more than a dozen reports of aquifers polluted by oil or gas since 1985 – when regulations were last revised – even though the DMN insists this has never occurred.

On October 28th, the DEC finally released proposed regulations to codify the SGEIS — there was no mention of them in the initial draft of 2009. (DEC is holding hearings on these proposed regulations before finalizing the SGEIS on which they are based.) These new regulations should have encompassed the guidelines of the earlier GEIS as well. Exactly when the regulations will be finalized is unstated. But unless regulations are finalized before the rigs begin to drill, as it has been, so it will continue to be: we may never see those necessary regulations, and will be left with scant protection against the industry.