Cuomo Says N.Y. Will Probably Miss Deadline for Fracking Rules

Governor Andrew Cuomo said New York will probably miss a Nov. 29 deadline to issue regulations on hydraulic fracturing for natural gas, restarting a public review that may delay drilling for months.

The state, which has been studying fracking for more than four years, issued a moratorium in 2010 so regulators could conduct an environmental survey and develop rules. In September, the Cuomo administration said Health Commissioner Nirav Shah would further analyze the issue with the help of an outside panel, whose members were chosen last week.

“We want a proper process,” Cuomo said today on Albany radio station Talk 1300. “We want it as expeditiously as possible. I don’t see how we get it done by next week.”

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 municipalities in the state’s Southern Tier to allow drilling. They say it would encourage the type of economic development seen in states from Wyoming to Pennsylvania. Environmental groups and residents opposed to fracking sent 80,000 messages to the Environmental Conservation Department during the last comment period.

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.

Prices Plunge

Since New York began developing rules in July 2008, natural-gas prices have plunged by about 70 percent. Talisman Energy 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.

Fracking, in which millions of gallons of chemically treated water and sand are forced underground to break up shale and free trapped gas, has been linked to groundwater contamination in Pennsylvania, high ozone levels in Wyoming and to headaches, sore throats and difficulty breathing for people living close to wells in Colorado. 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 contain 490 trillion cubic feet of gas, enough to supply the U.S. for two decades, according to Terry Engelder, professor of geosciences at Pennsylvania State University. The U.S. Energy Department said the formation may hold 141 trillion cubic feet, enough to meet U.S. demand for about six years.

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 two bans on oil and gas drilling.

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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