New York Delays Fracking Decision to Review Effect on Health

New York Governor Andrew Cuomo’s administration is delaying a final decision on fracking to study its effects on health.

The state in 2010 stopped gas drilling by hydraulic fracturing so regulators could conduct an environmental review and develop rules. Cuomo this year said he expected a decision by the environmental conservation department by about September.

Yesterday, department Commissioner Joseph Martens said Health Commissioner Nirav Shah will analyze the practice. Environmental groups pressed the state to use outside analysts for such a review, an idea that Martens said he rejected because they would probably be biased.

“I want to make sure that we have done the most thorough review possible, especially when it comes to public health concerns,” Martens said in a statement e-mailed yesterday. “In addition, I want to ensure that the department has the most legally defensible review so that when the department issues its final determination on this matter, protracted litigation is avoided.”

Cuomo, a 54-year-old Democrat who has been mentioned as a potential presidential candidate in 2016, has been under pressure from energy companies and some localities to allow drilling to encourage the type of economic development seen in fracking states from Wyoming to Pennsylvania. New York’s unemployment rate was 9.1 percent in August, above the national average of 8.1 percent.

Price Slide

It may already be too late for New York to cash in on the boom that led natural-gas companies to spend $20 billion on leases, drilling rigs and royalty payments in Pennsylvania from 2008 to 2010, and the $5 billion in additional economic output that Ohio is forecast to get by 2014.

Since New York began developing gas-drilling rules in July 2008, natural gas prices have plunged by about 80 percent. Talisman Inc. (TLM), a Calgary-based company that has about 250,000 acres under lease in New York, has said it’s unlikely to be an active driller in the state until prices rebound.

The state doesn’t have much longer to decide. It must rule by the end of November or risk reopening the public-comment period by requesting an extension, according to Tom West, an industry lobbyist in Albany.

“I’m sure they don’t want to do that,” West said in a telephone interview yesterday.

Marcellus Shale

About 80,000 messages were sent to the conservation department during the last public-comment period as environmental groups staged protests.

Fracking, in which millions of gallons of chemically treated water and sand are forced underground to break up shale rock and free trapped gas, has been blamed for damaging water sources. The federal Environmental Protection Agency is studying the effects on drinking water.

New York sits on the northern edge of the Marcellus Shale, which may hold enough natural gas to supply the U.S. for two decades, according to Terry Engelder, a geosciences professor at Pennsylvania State University.

Fracking already has been banned in more than 20 New York towns, according to Karen Edelstein, a geographic information- systems consultant in Ithaca. Anschutz Exploration Corp. and Cooperstown Holstein Corp., a dairy farm, have appealed decisions by New York judges that upheld bans on oil and gas drilling in two towns.

Cuomo has said local governments should maintain the right to block drilling.

To contact the reporter on this story: Freeman Klopott in Albany, New York, at fklopott@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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