Natural Gas

[sumisu]

Chesapeake won't drill in NYC watershed

By MARY ESCH, Associated Press Writer Mary Esch, Associated

Press Writer – 1 hr 42 mins ago

http://news.yahoo.com/s/ap/20091028/ap_on_bi_ge/us_gas_drilling_ny

ALBANY, N.Y. – Chesapeake Energy, one of the nation's largest natural gas producers, said Wednesday it won't drill in the New York City watershed in upstate New York because of opposition from politicians and environmental groups.

The announcement came hours before the first of four public hearings on the state Department of Environmental Conservation's new gas-drilling regulations, which critics call insufficient to protect the city's water supply.

"We have made the business decision not to drill in the New York City watershed," Chesapeake spokeswoman Maribeth Anderson said.

Concern over drilling in the Catskills region that provides water to the city's eight million residents has become a "needless distraction from the larger issues" of gas development in the state, she said.

Anderson said Oklahoma City-based Chesapeake is the only leaseholder in the 1 million-acre region, which includes a corner of the gas-rich Marcellus Shale formation. It's an area of forests, lakes and streams.

Earthjustice, an environmental group, welcomed the news from Chesapeake but said the decision needs to be backed up by a state ban on drilling in the watershed to ensure permanent protection.

The new rules, released Sept. 30 for a 60-day comment period, were drafted as a supplement to existing state regulations on oil and gas exploration in response to concerns about gas extraction from deep shale formations using horizontal drilling and hydraulic fracturing. In that process, millions of gallons of water combined with chemicals are injected after a well is drilled, fracturing the shale to release the gas.

Hydraulic fracturing, or "fracking," is widely used in the Marcellus Shale formation, a layer of rock about 6,000 feet below ground that extends from southern New York, across Pennsylvania, into eastern Ohio and West Virginia.

Environmentalists and residents worry about accidents that could result in contamination of water supplies by chemicals added to the fracking water or brought up from the shale thousands of feet underground.

Although hydraulic fracturing is generally safe, the technique has been blamed for a number of water pollution cases around the country.

New York's 804-page report spelling out the regulations describes the substantial economic benefits of natural gas development in the Marcellus Shale as well as the potential adverse effects. It outlines requirements designed to protect water resources, air quality, wetlands, roads, and community character, among other things.

Permits to drill in the Marcellus region of New York have been held up for about 18 months while the generic impact statement, which will substitute for individual environmental impact statements, was produced.

K&L Gates, a law firm representing Halliburton and other energy companies, calls the proposed regulations "the most stringent requirements on horizontal drilling and high-volume fracturing activities of any state."

The proposed regulations could be modified after the public comment period. A spokesman for New York Mayor Michael Bloomberg said the administration was still evaluating the proposal and formulating a public comment.