New York State sits atop what may be one of the world’s greatest supplies of natural gas, at a time when climate concerns have increased demand for it, when advanced technology has made it more accessible and when Albany is hungry for new economic opportunities. That’s why in a draft State Energy Report issued last month, Governor David Paterson said the upstate gas reserve “presents an opportunity for the State to unlock substantial economic value while helping to achieve a key energy policy objective of importance to the state’s energy security.”

But a broad coalition of upstate environmental groups, local community boards and elected officials from City Hall to Washington has emerged to resist plans to extract that subterranean fuel until key environmental questions are addressed. The reason? Some of the state’s underground treasure of natural gas is located under and around another precious resource: New York City’s water supply system.

Getting the gas could require intensive drilling near the watershed, and will produce millions of gallons of contaminated wastewater. As New York State finalizes its assessment of the potential environmental impact of natural gas drilling and finalizes the permitting process it will use, drilling companies are already leasing property upstate—and opponents are gathering stories of gas-retrieval projects in other states that may have created serious public health problems.

Underground treasure

Interest in natural gas has soared because it produces lower carbon emissions than oil and because it has become more feasible to unlock domestic gas deposits thousands of feet beneath the earth’s surface. A quarter of New York’s current energy needs are met by natural gas, mainly supplied by the Gulf Coast and Canada.

New York State sits on top of one of the largest shale formations in the United States, the Marcellus Shale, which contains large deposits of natural gas and extends northeast from West Virginia, through Pennsylvania to southwestern New York. Named for an exposed shale outcrop in Marcellus, N.Y., 15 miles southwest of Syracuse, the formation covers almost the entire mid-section of the Empire State. The quantity of recoverable natural gas in New York is not known with total certainty but it could be as much as 20 times what is currently produced annually in the United States, according to Gary Lash, a professor of structural geology at the State University of New York at Fredonia.

Recovering natural gas in the Marcellus Shale will require a process called hydraulic fracturing or “hydro-fracing” (pronounced frack-ing), the high-pressure injection of hundreds of thousands of gallons of water, sand, foaming, gel and acid into wells as deep as 10,000 feet below the surface. These wells cut horizontally through the Marcellus Shale, “fracturing” it and releasing gas to the surface.

The Marcellus Shale has incredible allure for gas companies that are accustomed to trial and error. Gas development in New York to date has had “a 20 percent success rate,” says Brett Chedzoy, a member of Cornell University Cooperative Extension’s Marcellus Shale research team. “The Marcellus Shale offers an almost 100 percent success rate anywhere that shale exists.”

In the state energy strategy released this summer, Paterson wrote that, “Natural gas extraction would create jobs, create wealth for upstate land-owners, and increase State revenue from taxes and land-owner leases and royalties.” He added that it might “spur economic development and job creation in economically depressed regions of the state” and “place downward pressure on natural gas prices, thereby potentially lowering the cost of energy for New Yorkers.”

Questions from elsewhere

But the practice raises a host of environmental concerns.

Critics of hydro-fracing have raised questions about whether the chemicals used in the drilling process will cause underground water contamination and how safely the water used for drilling can be disposed. A single drilling project might require 3.5 million gallons of fluid—the equivalent of running a shower for a year. Getting the gas out of the Marcellus Shale could involve hundreds of such projects.

According to the EPA, some of the chemicals found in “fracing fluid”, like isopropanol, hydrochloric acid, and formic acid are either carcinogenic or “may cause tissue or heritable genetic damage.” One problem is that gas drilling companies are not required to disclose the contents of “fracing fluid” because of a 2005 loophole in the Clean Water Act. A bill is moving through Congress to close that loophole.

Hydro-fracing has been linked to toxic leaks, spills and explosions in at least five states. In late 2008, approximately 1.6 million gallons of used frac-fluid leaked from a waste pit near the town of Parachute, Colo., soaking into the ground and eventually reaching the Colorado River. Waste pit leaks have also been reported in Utah and New Mexico. Explosions caused by compressed gas in areas where hydraulic fracturing is taking place have occurred in Ohio and, on New Year’s Day 2009, in Dimock, Penn. The company that is drilling in Dimock, Cabot Oil & Gas, recently met with officials in Sullivan County, N.Y. to discuss buying land for natural gas drilling. Cabot did not return a phone call requesting comment.

According to a February 2009 report released by Manhattan Borough President Scott Stringer, “seven states have experienced serious incidents of water contamination near hydraulic fracturing drilling sites: Alabama, Colorado, Montana, New Mexico, Ohio, Texas and Wyoming.” Several of these cases of water contamination involved dangerously high levels of benzene, a known carcinogen with links to blood disorders, respiratory tract irritation and increased incidence of leukemia.

In Wyoming, the EPA has begun to test drinking water wells near drilling sites, finding 11 of 39 wells to be contaminated, some with chemicals used directly in the hydro-fracing process.

It’s important to note that because regulators don’t have a complete inventory of what chemicals are used in fracing, they don’t know with total certainty what impact—if any—the process is having on water, and if the contamination they’ve found is the result of hydro-fracing or something else.

A liquid empire

New York City’s watershed encompasses 19 reservoirs and almost 2,000 square miles, extending 125 miles north and west of New York City, almost reaching the Pennsylvania border to the west and Connecticut to the east. The watershed, which supplies 1.4 billion gallons of water daily to 9 million people—almost half of the state’s residents— is composed of two major systems. The Croton System, with 12 reservoirs and three controlled lakes in Putnam and Westchester counties, supplies about 10 percent of the water consumed daily in New York City. The lion’s share of the city’s water supply comes from the six reservoirs within the Catskill/Delaware System located in Delaware, Greene, Schoharie, Sullivan and Ulster counties, all west of the Hudson River.

On federal orders, the city is building a $2 billion filtration plant in the Bronx to process Croton system water. But water from the far larger Catskill/Delaware System has maintained enough purity, according to federal regulators, to avoid filtration. In that system, New York City has entered into an ongoing series of watershed agreements with upstate communities designed to prevent runoff agricultural and industrial pollution in watershed areas. The city has also purchased or paid for conservation easements on more than 10 percent of its watershed, almost 120,000 acres, at a cost of $1.5 billion.

The effort to protect Cat-Del sometimes pits the city’s needs against upstate communities that have struggled to develop their economies. Nonetheless, the effort has been largely successful. In 2007, New York City received a federal waiver allowing it to utilize non-filtered Catskill/Delaware water until 2017, sparing the city the estimated $5 billion expense of filtering that system.

The gas reserves that have attracted so much attention in the last year are found underneath at least a portion of all five Delaware/Catskill System counties. Chedzoy says the Marcellus Shale does run directly under some of New York City’s water supply reservoirs. But he cautions that drilling companies likely will go after low-hanging fruit first, drilling as close as they can to existing pipelines not located near the watershed.

Problems with the process?

The debate about hydro-fracing in New York has been under way since early 2008, when more and more upstate residents were being approached by drilling companies looking to lease land at high prices. By June 2008, local environmental groups were organizing meetings where upstate residents could hear directly from environmental advocates in western states where drilling was already taking place.

At the same time, New York State government was already preparing for hydro-fracturing within the Marcellus Shale. In spring 2008, Assembly Member William Parment from Chautauqua introduced legislation that would allow the state Department of Environmental Conservation (DEC) to regulate the kind of wells that drilling in the shale would require. Backers said the bill was a move to protect public health. But environmental groups argued that the bill would truncate the permitting process for drilling companies.

During the debate over the bill, Bradley Field, the DEC’s Director of Mineral Resources, made a PowerPoint presentation to the legislature in which one slide read, “All oil and gas states surveyed. Not one instance of drinking water contamination in over one million frac jobs.” Environmental groups countered that there were, in fact, serious concerns about water quality in states like Wyoming.

The bill passed on the last day of the 2008 legislative session. At least 16 legislators voted against the bill, including New York City senators Eric Adams, Jose Serrano, Thomas Duane and Diane Savino. The governor in July 2008 signed the bill, but also issued a moratorium on drilling in the Marcellus Shale until the state completed an environmental impact assessment of hydraulic fracturing.

Paterson said that the assessment process would ensure “that concerns raised by residents who could be affected by drilling activities are heard and considered.” But the way in which the State DEC has handled public input to the assessment process has been the subject of criticism.

Both Stringer and the Pennsylvania-based Delaware Riverkeeper Network have pointed out that when the DEC held an initial round of public meetings as they prepared the scope of what would be included within the Environmental Impact Statement, the DEC “omitted the largest block of state residents who could be affected—residents of New York City.” No hearing was held in the five boroughs. Asked about this, Yancey Roy, a DEC spokesman told City Limits: “We held hearings in places where drilling would take place.”

The DEC said last week that they are on track to release the draft Impact Statement for public comment in late September. Catskill Mountainkeeper, working in concert with over 20 other environmental organizations, is urging the DEC to extend the period for public comment beyond the regular 30-day window. A major concern of environmentalists is how the state will assess the potential cumulative effect of years of drilling in the Marcellus Shale.

Ultimately, the state legislature will have to approve the DEC’s re-worked drilling regulation, and grapple with concerns over whether DEC has the resources to oversee such a massive extraction project. Says Brett Chedzoy, “the DEC is understaffed and underprepared but trying to get the best information available”.

Digging down

Despite the current moratorium on drilling permits in the Marcellus Shale, drilling companies have leased thousands of acres in anticipation of an updated application process. Just this month, Fortuna Energy and Chesapeake Energy—two of the largest drilling companies operating in New York State—offered competing bids of at least $5,500 per acre to a group of 600 property owners on the New York and Pennsylvania sides of the Marcellus Shale. The $192 million deal would involve 35,000 acres. Activists contend that tens of thousands of acres within the watershed have already been leased by drilling companies.

A Chesapeake official says the company already holds a million acres in New York state but adds that “the vast majority of our acreage is located in the southern tier of New York, far from the New York City watershed.”

“New York imports the vast amount of the natural gas it uses, and producing natural gas from the Marcellus Shale will help New York become more energy independent, produce royalty income for many farmers and landowners, and serve as an economic engine for the southern tier, where investment is needed,” said the spokesman, Matthew Sheppard, in a statement. “We will focus our drilling activities in the southern tier of New York, far outside of the New York City watershed. We are confident our drilling will have no adverse impact on any watershed. We have safeguards for containment and disposal of produced water and New York has a robust regulatory system.”

But environmental groups from New York City, the Catskills, northeast Pennsylvania, the central New York Finger Lakes region, and the Binghamton area in concert with national organizations like the Sierra Club and Natural Resources Defense Council are pushing the state to explain exactly where the tens of millions of gallons of fresh water needed for hydro-fracing will come from, and where the wastewater will ultimately go.

At the same time, legislators at the city, state and federal level are trying to throw legislative hurdles in front of the natural gas push.

The FRAC act—which would overturn a Bush-era exemption of hydraulic fracturing from the Safe Drinking Water Act and require public disclosure of the chemicals used in hydro-fracing—has been introduced in both houses of Congress. Senator Chuck Schumer and Catskills-area Congressman Maurice Hinchey are co- sponsors.

New York State Assemblymember James Brennan of Brooklyn has re-introduced legislation prohibiting natural gas drilling within the New York City watershed, or anywhere within 5 miles of its boundaries.

At the city level, the Department of Environmental Protection has raised concerns about the drilling. Community boards in Manhattan, Queens and the Bronx have held hearings on the question. City Councilman James Gennaro, chairman of the Council’s Environmental Protection Committee, earlier this year introduced a resolution calling for a total ban on “drilling for natural gas within the boundaries of the watershed of the New York City drinking water supply.” Stringer, in conjunction with environmental advocacy groups like the Natural Resources Defense Council and Riverkeeper, has also called for a ban on watershed drilling.

Given the broader environmental concern of climate change and the stark economic need of upstate counties, the question is not whether there will be hydro-frac drilling in the Marcellus Shale, but where and how that drilling will occur, says Chedzoy. “We can tap into this resource. We can benefit from it,” he says. “Is there a risk? Yes. Is there a justifiable risk? I can’t answer that.”

He notes that many of the communities who might profit from the jobs and tax money that drilling would bring drink the same water as city residents. “Nobody wants to see their water poisoned, their land destroyed, communities ruined,” Chedzoy adds. “A year ago it was all about the money. But now both sides are coming together.”

– Sarah Crean