State’s Proposed Framework for Natural Gas Exploration Lacks the Balance Needed to be a Formula for Growth and Environmental Protection

Albany – The Independent Oil & Gas Association of New York (IOGA of NY) today will deliver its formal comments to the state’s Department of Environmental Conservation (DEC), calling the agency’s proposed regulations and permit guidelines restrictive, inequitable and unjustified.

IOGA of NY represents more than 400 business and individuals employing more than 4,500 people working in roles such as scientists, engineers, geologists and energy experts.

“In its current form, the draft Supplemental Generic Environmental Impact Statement (SGEIS) imposes permit guidelines that fail to strike a balance between the future exploration of New York’s vast natural gas reserves and the appropriate, necessary protection of our environmental resources,” said Brad Gill, IOGA of NY’s executive director.

“IOGA of NY’s members have the experience and technological competency, as do other experts in the field, to leverage the state’s abundant energy resources and be part of Governor Cuomo’s formula to stimulate the economy and increase New York’s job base. However, under the proposed framework, world class companies that are contemplating investment in New York see the ‘Open for Business’ sign as attractive, but the fine print is neither welcoming nor reasonable,” Gill said.

IOGA of NY contends that the SGEIS and its accompanying regulations will not result in greater environmental protection. Rather, they will set an unreasonable bar for oil and natural gas developers prepared to bring jobs and opportunity to Upstate New York and will make development economically unattractive.

In brief, IOGA of NY’s extensive and thorough comments include the following specific concerns and recommendations:

• Reduces available surface exploration opportunities in New York State by approximately 50 percent.

The regulatory framework will hinder the selection of land and layout of drilling locations, rendering roughly 50 percent of known and desirable parcels within the Southern Tier unavailable for exploration. This would affect economic development opportunities for energy companies, including small companies that currently develop gas in New York, the businesses and suppliers that support them, other small businesses, as well as landowners and regional governments.

IOGA of NY calculates lost royalty and lease bonus income of $21 billion in four Southern Tier counties (Broome, Chemung, Steuben and Tioga). Potential state and local tax revenues would be decreased by approximately $5.8 billion ($4.4 billion in ad valorem taxes; and $1.4 billion in personal income taxes).

• Imposes arbitrary standards on energy companies.
DEC’s proposed permitting standards will make New York uncompetitive with neighboring states.

Example: Proposed requirements for controlling naturally occurring storm water are unnecessarily excessive, burdensome and costly to energy exploration companies. These and other mitigation requirements are being unfairly applied and will discourage investment by increasing the cost of drilling a well by up to $1 million.

• Activities and actions are contemplated under unrealistic scenarios and extreme conditions.
The SGEIS assessment of environmental impacts, in particular those baseline assumptions associated with rate of development, air emissions and water usage, exceed realistic and reasonable modeling, expectations and performance. Additionally, in some cases, the considered events are in conflict with existing state law. In other cases, the actions and requirements are pre-empted by federal authority.

Example: DEC bases its air emissions modeling on the assumption that on-site diesel trucks will idle constantly. However, state Environmental Conservation Law already limits this activity to five consecutive minutes when the vehicles are stationary.

• Disregards role of other regulators or laws.
The proposed mitigation measures and regulatory proposals seek to implement minimum flow requirements on all water withdrawals exclusively for the exploration of natural gas. The DEC should continue to honor the interstate compacts of the Susquehanna River Basin Commission and the Delaware River Basin Commission, of which New York is a member.

“In its present form, the SGEIS and its associated regulations are too restrictive and inhibit economic growth,” said Gill. “IOGA of New York remains committed to seeking a positive energy, environmental and economic future for all New Yorkers.”

Important documents associated with IOGA of NY’s comments on the DEC’s draft SGEIS can be found below:

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