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New York Can Allow Fracking After It Gets the Rules Right

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Aug. 29 (Bloomberg) -- New York Governor Andrew Cuomo is expected to soon lift the state’s moratorium on natural-gas drilling, in place since 2010, at least for some counties.

That would be welcome news. Extracting gas from the Marcellus shale using horizontal drilling and hydraulic fracturing can create jobs, lower energy prices and lessen the U.S.’s reliance on (dirtier) coal and oil to generate electricity and heat.

In announcing the decision, rumored to be coming in September, Cuomo, a Democrat, will probably unveil new rules for drilling. Here is where the rest of the country will want to pay attention. As it makes a fresh start in the gas business, New York has the opportunity to be a model for all states that want to reap the economic benefits of the natural-gas boom without endangering the air and water.

One underlying aspect of these regulations -- which will cover everything from drilling and well construction to wastewater disposal -- is especially important to get right, and that is transparency. The state needs to not only demand clean operating procedures but also require that all companies involved with drilling let the public know what they are doing and when, and what chemicals they are using to do it.

Much concern has been voiced by neighbors of drilling operations about the chemicals used in the fracking process. To break up the rock and allow the gas within to escape, drilling companies pump huge quantities of water, sand and a proprietary mixture of chemicals at high pressure into the well. There is reason to worry that -- despite the great depth at which wells are fracked, often more than a mile below the surface -- some of this mixture might make its way into drinking water, especially if it is spilled after it comes back up through the wellhead to the surface. The public needs to know what these chemicals are.

States where natural gas is being extracted have been getting on board the frack-chemical disclosure bandwagon. In the past two years, more than a dozen have created or tightened their regulations. As states have taken action, the drilling industry has generally reduced its resistance to transparency.

The best rules -- those in Ohio and Pennsylvania, for example -- require disclosure both of chemicals that the U.S. Occupational Safety and Health Administration considers hazardous to workers and of all other chemicals intentionally used in frack fluids. Although state rules generally limit who can see chemical information that companies consider proprietary, the best ones define such limitations narrowly. And they make sure regulators and doctors have access to all the details they need to do their jobs.

Ideally, this level of transparency should extend beyond the fracking mixtures to include all substances put below ground, such as those used in “spudding” (starting to drill) a new well, new drilling in old wells (which can involve injections of corrosion inhibitors and bacteria-killing agents) and plugging a spent well. John Kasich, the Republican governor of Ohio, recently proposed that his state require such “spud-to-plug” disclosure. The Ohio legislature unfortunately rejected the idea, but did at least demand disclosure of all substances used in drilling the first few hundred feet of a well.

Disclosure should also be required for above-ground pollution. That means wastewater, which is often held in open pits, from which pollutants can get into the air. Regulators and the public should know how much wastewater each well produces, where it is held or transported and how it is ultimately disposed of.

Total openness is not a new concept; the secretary of Energy’s Shale Gas Production Subcommittee has called for it, and for the information to be posted on a public website. Such a requirement might at first raise hackles among gas drillers, yet it is in the industry’s interest to keep its operations open to scrutiny so that undue public resistance doesn’t get in the way of responsible drilling.

Although we like the idea of lifting the New York moratorium on gas drilling, there’s no reason to hurry. With the price of natural gas still only about $2.60 a thousand cubic feet, an opening now would not cause a rush to drill. Companies will be more inclined to wait for the price to rise to about $5, as is expected over the next few years. That will allow plenty of time to get New York’s regulations right.

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Today’s highlights: the editors on using the Strategic Petroleum Reserve to hold down gasoline prices; Margaret Carlson on Mitt Romney’s odd sense of humor; Clive Crook on the foreign policy Romney won’t adopt; Jonathan Mahler on how the Red Sox and Dodgers ended a baseball era; John Paul Rollert on Paul Ryan, the salesman who never takes no for an answer.

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