On Friday, April 23, the New York State Department of Environmental Conservation (“NYSDEC”) announced that it would exclude the New York City and Syracuse drinking water watersheds from its Final Supplemental Generic Environmental Impact Statement (“FSGEIS”) concerning natural gas development in the Marcellus Shale. Unless and until NYSDEC creates a separate Generic Environmental Impact Statement applicable to the New York City and Syracuse watersheds, each permit application to drill for gas in these areas must be accompanied by a site-specific Environmental Impact Statement (“EIS”). Because an EIS can be lengthy, complicated, and costly—especially if contested in litigation—DEC’s position may discourage gas companies from drilling in these watersheds; some accounts have characterized NYSDEC’s decision as a de-facto ban on drilling in these areas. However, the regulatory limbo imposed on the New York City and Syracuse watershed areas is not permanent; according to the Associated Press, “[t]he DEC and the state Health Department will work with Syracuse, New York City and communities within the watersheds to develop special restrictions for drilling companies seeking permits in the watershed.”
NYSDEC’s decision reflects the competing demands it faces with respect to natural gas development in New York state. The New York City watershed supplies drinking water to over nine million people; the Syracuse watershed supplies roughly 200,000 people. Due to the high quality of this water, both cities are exempt from federal regulations requiring drinking water filtration. Environmentalists and city officials have consistently called for a state ban on natural gas development in the watershed areas in order to protect drinking water sources. However, NYSDEC Commissioner Alexander “Pete” Grannis has expressed concern that an outright ban on drilling in these areas, much of which is privately owned, could give rise to takings claims from property owners deprived of potentially lucrative leasing opportunities.
NYSDEC’s compromise, which was announced without an official written statement, may lower the temperature of the debate surrounding gas production in the Marcellus Shale. It remains to be seen whether the Department’s present action will ultimately result in a solution that is both politically and environmentally tenable.
