IOGA of NY to Deliver Testimony at Tuesday's DEC Hearings

Burdensome drilling permit requirements and regulations are unnecessary and arbitrary.

HAMBURG, NY (11/29/2011)(readMedia)-- As proposed, draft regulations and permit guidelines governing oil and natural gas development are arbitrary and will limit any real opportunity for Upstate communities to truly prosper, the Independent Oil & Gas Association of New York (IOGA of NY) said today.

IOGA of NY, which represents more than 400 individuals and businesses employing nearly 5,000 people, said the draft Supplemental Generic Environmental Impact Statement (SGEIS) and companion regulations single out the industry and are based on unrealistic worst-case scenarios.

Brad Gill, IOGA of NY's executive director, will submit initial comments at Tuesday's DEC hearing in Loch Sheldrake, Sullivan County. Formal, detailed comments will be submitted before the DEC's Dec. 12 deadline.

"Your agency has repeatedly and correctly demonstrated that the DEC is well-equipped to regulate our industry effectively and in a manner that is economical, too," Gill said. "Upstate New York might still benefit from this opportunity for a new prosperity, provided these proposals are moderated to make them practicable. Without moderation, these well-intended but unnecessarily burdensome requirements will prove to be a regulatory monument to lost opportunity."

Gill will add that the Marcellus Shale could be taken out of play for prospective companies, especially smaller developers who operate on tighter margins. The impact will be felt not only by drilling firms, but will ripple throughout local communities and businesses that won't enjoy the benefit of Upstate's natural gas reserves.

"We are simply looking for a reasonable bar for industry that protects the state's natural resources, invites business and economic opportunity and achieves the state's goal of creating jobs while safely harvesting oil and natural gas," Gill said. "The proposed regulatory regime, as drafted, is unworkable and impractical."

Similarly, Gill asserted that the SGEIS accepts an overly pessimistic view of potential risks by applying sweeping, worst-case scenarios to form baseline assumptions regarding normal operations. One example, in Chapter 6, pertains to air emissions. The DEC bases its modeling on an assumption that on-site diesel trucks would idle constantly, when state conservation law already prohibits diesel engines from idling for more than five consecutive minutes when not in operation.

IOGA offered the following preliminary comments to the DEC:

  • Prohibitions and setbacks: Would hinder the selection and layout of spacing units, rendering vast tracts unavailable for development and resulting in millions of lost investment dollars and production revenue from existing leases. Additionally, landowners would lose royalty payments, municipalities and the state will lose tax revenue (ad valorem, sales and income taxes), and companies supporting the industry will suffer from lack of business;
  • Stormwater general permit requirements: Singles out the oil and gas industry and includes requirements that will increase the cost of drilling and completion unnecessarily, deterring investment in New York;
  • Air emissions: Proposed mitigation requirements conflict with existing and/or proposed U.S. Environmental Protection Agency (EPA) air quality regulations. These measures have not been shown to be beneficial and do not recognize the need for equipment to move freely among states without state-specific requirements; and
  • Water Withdrawals: Proposed requirements would unfairly apply only to oil and gas extraction, disregarding the role of two separate water basin commissions in regulating withdrawal and ignoring the fact that drilling would only increase the state's water demand by less than one percent.

Gill said IOGA of NY and its members recognize the challenges in developing a regulatory framework that protects the environment and allows for responsible development.

"Billions of dollars in economic impact to New York and its citizens are at stake. And these benefits do not come at the expense of environmental protection," Gill said. "With more than one million wells safely hydraulically fractured in the United States, the nation's oil and natural gas industry has a stellar record of safety and compliance with required environmental standards."

Download a copy of Brad Gill's testimony here.

IOGA of NY, representing more than 400 individuals and companies engaged in the oil and natural gas industry, promotes the common interests of its members who represent all industry sectors. IOGA of NY members are committed to operating safely, efficiently and with great care and stewardship on behalf of the state's natural resources. IOGA of NY and its members strive to educate the public about the positive impacts the oil and gas industry has had – and will continue to have – on New York's economy and quality of life.