Source : Joseph Spector | Albany Bureau | December 11, 2010

http://www.pressconnects.com/article/20101211/NEWS01/101211002/Paterson+vetoes+gas+drilling+moratorium++but+orders+temporary+ban

ALBANY – Gov. David Paterson on Saturday vetoed a bill to temporarily ban natural-gas drilling in New York, but issued an executive order to prohibit the hydraulic fracturing process until at least July 1.

In doing so, Paterson sought to find a middle ground between environmentalists concerned about the potential harm of the so-called hydrofracking and business groups critical that the moratorium bill would impact all gas drilling in the state.

Both sides praised Paterson for his decision – a rare sign of agreement in the contentious battle over natural-gas drilling.

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The executive order requires the state Department of Environmental Conservation to continue its review of the effects of hydraulic fracturing in the Marcellus Shale, a formation that stretches across the Southern Tier.

The order would essentially ban high-volume, horizontal hydraulic fracturing until at least July 1, the outgoing Democratic governor said.

“We in government must always focus on protecting the well-being of those whom we represent and serve, but we also have an obligation to look to the future and protect the long-term interests for our state and its residents,” Paterson, who leaves office at month’s end, said.

Permits for hydrofracking cannot be issued until the DEC completes its Supplemental Generic Environmental Impact Statement, which isn’t expected until sometime next year. As a result, Paterson has expressed doubt in recent weeks about the need for the moratorium bill, saying the state essentially has had one since the review process started in 2008.

But the Assembly passed the moratorium bill last month after the Senate did so in August, forcing it to Paterson’s desk. He had until Monday to act.

The bill would have established a moratorium until May 15, but Paterson said it would have also applied to the more conventional, low-volume, vertical oil and gas wells.

Environmental groups applauded Paterson’s decision, saying he set a national precedent and provided a “timeout on horizontal wells for fracking for natural gas.”

Still, the groups cautioned that the state Legislature’s moratorium bill was stronger and urged incoming Gov. Andrew Cuomo to take an aggressive stance on the issue. Cuomo has said that drilling should only be allowed if it is deemed safe.

“Governor Paterson has signaled that he understands fracking is a dangerous process that poses serious health and environmental threats,” a coalition of environmental groups said in a statement.

“The moratorium makes New York the first state to insist on protecting the health and safety of its citizens and drinking water, before allowing drilling to proceed.” Assemblywoman Donna Lupardo, D-Endwell, Broome County, said Paterson struck the right balance in his decision.

“I voted against the moratorium bill for the very reasons that he vetoed it,” Lupardo said in a statement. “The May 15th moratorium deadline was pointless given the current pace of the DEC’s review of horizontal hydraulic fracturing and that the bill would have inadvertently suspended the issuance of new permits for vertical wells.”

State Sen.-elect Tom O’Mara, R-Big Flats, said he supported Paterson’s veto.

“Governor Paterson’s veto is the right decision, and I credit him for recognizing that the proposed moratorium was flawed, unreasonable and unnecessary,” O’Mara said in a prepared statement. “It unnecessarily jeopardized jobs, revenues, and future economic opportunities for thousands of Southern Tier landowners, farmers and workers.

“The future of the Marcellus Shale natural gas industry is already undergoing a careful, deliberate, multi-year review by New York’s regulatory and scientific experts, and that’s where this future deserves to be determined. The Department of Environmental Conservation is being given ample time to ensure that environmental safety will remain the overriding priority for the industry moving forward.”

The hydrofracking process uses a cocktail of chemicals and water to blast into the shale and access the gas underneath. Environmental groups have raised concerns about the impact that type of drilling would have on groundwater, in particular, and said the bill would have at least slowed the review process.

But Paterson said the bill, while well intended, would have a negative impact on the economy and prohibit drilling that “causes no demonstrated environmental harm, in order to effectuate a moratorium that is principally symbolic.”

He added, “Symbols can have great importance, but particularly in our current terrible economic straits, I cannot agree to put individuals out of work for a symbolic act.”

Business groups agreed, calling Paterson’s veto a “courageous” act. Brad Gill, executive director Independent Oil and Gas Association, said, “We are grateful to Governor Paterson for his courage and clear-headed judgment.”

The group estimated that the moratorium passed by the Legislature would have imperiled 300 companies in New York already drilling, along with 5,000 employees.

“This bill would have had far-reaching consequences to the state’s oil and natural gas industry, and to the communities in which our member companies work,” Gill said.

Paterson said his budget office estimated that the bill would reduce state revenues from the loss of permit fees and tax revenue amid the state’s own fiscal troubles.

But Senate Democratic Leader John Sampson, D-Brooklyn, ripped Paterson for vetoing the bill, saying the governor “caved” to the oil and gas companies. He warned that the executive order is too limited and pointed to the oil spill in the Gulf of Mexico this year as a reason to move cautiously with any drilling.

He claimed much of the state, including the Southern Tier, Hudson Valley and New York City, draws its drinking water from areas that will not fully be protected by the governor’s order.

“Allowing the special interest influence of the few to outweigh the public safety interests of so many is disappointing,” Sampson said.

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