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May 31 (Bloomberg) -- The federal government hasn’t adequately studied how natural gas drilling in the Delaware River Basin would affect 9 million water drinkers in New York, the state said in a lawsuit against the U.S.

A commission that oversees the river basin has proposed regulations that will allow a drilling procedure known as hydraulic fracturing, or fracking, at 15,000 to 18,000 gas wells without a full environmental review, New York Attorney General Eric Schneiderman said in an e-mailed statement. The attorney general filed a complaint today in federal court in Brooklyn, New York, seeking to halt the regulations until the commission complies with the National Environmental Policy Act’s requirement for a full review of all health and safety risks.

“The welfare of those living near the Delaware River Basin, as well as the millions of New Yorkers who rely on its pure drinking water each day, will not be ignored,” Schneiderman said. The U.S. should consider not authorizing development in the part of the river basin that includes New York City’s watershed, he said.

The Delaware River Basin Commission, an authority which oversees activities in the gas-rich area known as the Marcellus Shale, has a pending application from XTO Energy Inc., a unit of Exxon Mobil Corp., to explore in the area, and has refused to produce a full environmental impact assessment, according to Schneiderman’s complaint.

The Delaware River Basin covers 58 percent of the land area of New York City’s watershed west of the Hudson River, according to Schneiderman’s statement. The region targeted for exploration lie within the geographic formation known as the Marcellus Shale, and is protected by a 50 year-old agreement among the federal government and the states of New York, New Jersey and Delaware, according to the complaint.

Heavy Metals

Fracking could contaminate water supplies with radioactive materials, heavy metals, methane and other chemicals, according to the complaint.

New York City has spent almost $1.5 billion to protect the drinking water that flows from the watershed west of the Hudson, Schneiderman said in the complaint. The money has gone to buying land to serve as a buffer for pollutants, upgrading sewage plants and regulating human activities. If the city has to filter, as it already does with water coming from east of the Hudson, it would cost more than $10 billion initially, with annual maintenance costs exceeding $100 million, according to the complaint.

National Park Service

The lawsuit names as defendants Lisa P. Jackson, administrator of the Environmental Protection Agency, and Kenneth Salazar, secretary of the Interior Department. Other involved federal agencies include the U.S. Army Corps of Engineers, the National Park Service, the U.S. Fish & Wildlife Service and the Environmental Protection Agency.

Kate Kelly, an Interior Department spokeswoman, said the agency had no immediate comment.

Betsaida Alcantara, an EPA spokeswoman, didn’t immediately return a call for comment

A coalition that includes Anadarko Petroleum Corp., Chesapeake Energy Corp. and XTO Energy that supports drilling in the Marcellus Shale said in a statement that the lawsuit isn’t necessary, and will bring no environmental benefit.

“However, increasing the responsible development of clean-burning American natural gas will continue to create thousands of good-paying jobs while helping to drive down our nation’s dangerous dependence on energy from unstable and unfriendly regions of the world,” the Marcellus Shale Coalition said.

High-Pressure Jets

Fracking refers to a process that shoots high-pressure jets of water, sand and chemicals underground to crack open gas-rich rock formations.

Exxon Mobil Corp., the world’s largest company by market value, announced May 25 that it’s planning an advertising campaign to defend fracking, which landowners and environmental groups say is contaminating drinking water.

XTO Energy applied for gas exploration in a drainage area of the Upper Delaware River in May 2010, and public comments are scheduled for June, according to the complaint.

The company’s plan may harm Oquaga Creek, “a stream known for excellent trout fishing, within Broome County, New York,” according to the complaint.

Alan Jeffers, an Exxon spokesman, and Thomas Covington, a spokesman for XTO Energy, didn’t immediately return calls for comment.

Environmental Impact Assessments

The Delaware River Basin Commission stopped doing environmental impact assessments in 1980 because it lacked funds, and says it isn’t subject to federal law calling for such reviews, according to Schneiderman’s complaint.

More than 2,000 natural gas wells have been drilled in Pennsylvania, resulting in “hundreds of violations of water pollution laws,” Schneiderman said in the complaint, citing an April 19 blowout of a natural gas well owned by Chesapeake Energy.

The case is New York v. U.S. Army Corps of Engineers, 11-cv-2599, U.S District Court, Eastern District of New York (Brooklyn).

To contact the reporters on this story: Tiffany Kary in New York at; Chris Dolmetsch in New York at

To contact the editors responsible for this story: John Pickering at; Michael Hytha at

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