The New York State Department of Environmental Conservation (DEC) undertook its final official step in imposing a total ban on gas drilling using the method of high-volume hydraulic fracturing (HVHF) through its issuance this week of its “Findings Statement” pursuant to New York’s State Environmental Quality Review Act (“SEQRA”).  This week’s action was a fait accompli following the announcement at the New York Governor’s cabinet meeting in late 2014 that New York would ban HVHF and the subsequent release of DEC’s Final Generic Environmental Impact Statement (SGEIS). The Findings Statement breaks no new ground, continuing to base the total ban on somewhat vague assertions of unquantified public health risk and numerous statements of “possible” impacts.  In this article, we focus on DEC’s primary reasoning underlying the ban that could be subject to legal challenge.

The Findings Statement starts by quickly summarizing the numerous mitigation measures previously detailed in the SGEIS and then dismisses them summarily as inadequate to eliminate all potential for impacts due to accidental releases or human error.  Applying this stringent threshold to other activities that require permits would logically lead to the conclusion that no activity posing a risk of environmental harm should ever be permitted in New York State.  This virtually impossible-to-meet standard could be the subject of a legal challenge to DEC’s ban – assuming one is filed, with such challenge focused on the widespread use of HVHF throughout the rest of the country, and EPA’s recent study showing that HVHF does not pose systemic risks to water quality.

Another interesting aspect of the Findings Statement is DEC’s definition of HVHF as the “stimulation of a well using 300,000 or more gallons of water as the base fluid for hydraulic fracturing for all stages of well completion, regardless of whether the well is vertical or directional.”  As a threshold matter that would mean that a well stimulation method that does not use water would not be subject to the ban. Further, while the 300,000 gallon threshold is well below the current amount of water typically used in the HVHF process, the technology is always changing and there could come a time when much less water is required. In such a case again, the ban would not be applicable. Given this threshold, DEC’s must have premised the ban on HVHF primarily on impacts related to the amount of water used in the process and the associated  impacts on water supplies, and from fracking wastewater (treatment and storage), and truck trips to bring water to HVHF pads.  However, the agency attempted to broaden the scope of impacts beyond water usage in noting that HVHF well pads are larger than conventional well pads (though less numerous) and could bring drilling to areas that were not drilled conventionally.   That premise, however, does not necessarily hold up given that New York is a water rich state with estimated HVHF water usage projected to represent below 0.25 percent of water consumed in the state.  While DEC focuses on lack of disposal options, recycling waste water and out of state disposal remain available.  Thus, the attempted connection between the gallonage threshold and water impacts seems tenuous.

The Findings Statement otherwise takes a kitchen sink approach in concluding that HVHF would result or may result in unacceptable environmental impacts.  That scattershot approach broadens the rationale but also broadens the areas to be defended by DEC in any potential challenge.  For instance, the Findings Statement notes that, while HVHF would result in fewer well pads than conventional drilling, the impacts would be more “intense.”  However, the Findings Statement does not specify what that intensity is except for noting that the HVHF well pads are 50% larger.  DEC observes that HVHF would generate greater amounts of drill cuttings but again fails to specify how these additional cuttings would result in impacts that justify a blanket ban on the activity.  Further, the “intensity” of the activity is somewhat undercut in other portions of the Findings Statement concluding that the economic benefits of HVHF would not be as great as expected because the level of activity is expected to be modest in light of the earlier proposed restrictions.  It is hard to understand how the activity would be so intensive to industrialize upstate New York, yet also result in minimal economic development perspective, simultaneously.

One section of the Findings Statement that may have a more universal application is the section that focuses on potential impacts from accessory infrastructure, such as natural gas pipelines and compressor stations, which DEC found also could result in “potential” adverse impacts on wetlands, state-owned forests and animal habitat.  One can be sure that future opponents of projects related to such accessory infrastructure are sure to rely on these Findings to bolster their arguments, which could hinder attempts to increase the supply of natural gas to underserved parts of the state.

DEC’s SEQRA Findings unsurprisingly build upon the case made in its SGFEIS that HVHF is an unproven and risky technology that is likely to result in significant adverse impacts that outweigh its benefits.  Like the FEIS, the Findings rely heavily on “possible” risks and a concern that mitigation measures “may” not adequately address those impacts.  It remains to be said whether the mere risk of potential impact and application of a very stringent standard for deeming mitigation measures sufficient would be deemed enough to support New York’s ban on HVHF should industry choose to challenge the States’ action.