NORTHRUP

December 31, 2012 Chairman Robert K. Sweeney Committee on Environmental Conservation Chairman Richard N. Gottfried Committee on Health Chairman Charles D. Lavine Assembly Administrative Regulations Review Commission Re: High Volume Hydraulic Fracturing (HVHF) regulations proposed by the Department of Environmental Conservation (DEC) Chairmen and Members of the Committees: Thank you for the opportunity to present testimony on the proposed regulations. While grateful to you for the opportunity to comment on the proposed regulations to your committees, I am commenting to the DEC under protest to their irrational, arbitrary and capricious issuance of these proposed regulations. I have been a private investor in the energy sector and in real estate development for over 30 years. I have been a general and limited partner in over twenty offshore drilling rigs. I have owned and operated oil and gas properties in Texas and New Mexico. I have been the general partner in suburban and urban land developments. I have challenged municipal zoning ordinances and have had such ordinances overturned at trial. I have won a regulatory takings case against a Texas town. I have owned and operated vehicles that run on natural gas, and have owned a company that converted vehicles to run on natural gas. I have served on the Governor of Texass Energy Advisory Board. I have reviewed the proposed regulations in some detail1 and would like to bring your attention to the following points. 1. The regulations have been proposed out of context of the dSGEIS. The DEC cannot issue drilling permits for HVHF wells under the proposed regulations, because the DEC has not complied with the State Administration Procedures Act (SAPA), which requires the DEC to first complete the draft Supplemental Generic Impact Statement (dSGEIS), which governs SEQRA reviews of HVHF well permits. The DEC failed to finalize the dSGEIS within a year from its
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http://tinyurl.com/FrackingRegulations 1

last hearing. Absent the guidance of a completed dSGEIS, the proposed regulations are invalid and unenforceable. Proposing a final draft, out of context of a completed dSGEIS, is irrational, arbitrary and capricious. The SGEIS cannot be invoked to address the shortcomings of the proposed regulations, since we do not have it in final form as a reference. 2. Few land uses are protected2 Only two protected land uses are listed in section 560.4 Setbacks of HVHF wells: inhabited dwellings, which is not defined in 560.2 or anywhere else, but which is defined in New York codes as residences, which does not include hospitals, hotels, etc. and places of assembly which likewise is not defined, but which is commonly considered as auditoriums, theatres, public restaurants, etc. in fire codes and zoning ordinances. This means the DEC proposes no setbacks for HVHF wells from gas stations, warehouses, office buildings, out-patient clinics, daycare centers, parks, cemeteries, barns, houses under construction or vineyards. 3. No protections for surface property rights3 While ECL 23 requires the DEC to protect the rights of landowners, there are no specific protections in the regulations for surface property rights owners, ie. landowners. There are no HVHF well setbacks proposed in the regulations from any property lines. The HVHF setbacks proposed for spacing units in 553 are for mineral rights, ie. subterranean rights, not surface rights. Since mineral and surface rights can be owned by different persons or entities, this means that wells can be drilled where the landowner has no interest in the well. And as previously mentioned, without regard to most surface uses the landowners barn, garage, corn field, etc. The lack of protections for surface rights are exacerbated under compulsory integration.4 4. No protections from gas field industrial infrastructure5 The setbacks for HVHF wells proposed in 560.4 are for the drilling rig only, not for the mud pits, the flowback ponds, the compressors, the gas processing plants, gathering systems or gas compression stations. Any of these hazardous industrial systems can be located next to any land use a house, school, power station or hospital because there is no setback proposed for anything but the drilling rig.
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http://www.scribd.com/doc/116960614/Response-to-Proposed-New-York-FrackingRegulations 3 http://www.scribd.com/doc/117527641/No-Protection-for-Surface-Property-Rights 4 http://www.scribd.com/doc/106647400/NY-Compulsory-Integration-Law 5 http://www.scribd.com/doc/117619711/No-Regulations-on-Gas-Infrastructure

5. No protection from air pollution6 556.2 would allow a gas well to vent or flare raw gas for over 168 hours, or seven days. Since there is no setback of the vent or flare from any land use, this means that a well could vent or flare next to a milking barn, winery, hotel or marina for 7 days. 6. No protection for state lakes, forests or parks.7 There are no prohibitions of HVHF wells or infrastructure for state parks or historic sites, although such protections are not uncommon in other states.8 There are no setbacks for HVHF wells or gas field infrastructure from state lakes, rivers, streams or forests. There is no prohibition for drilling HVHF laterals under any state-owned property which would include all major lakes and most rivers. This lack of protection in Section 52 and 190 would virtually guarantee that such resources would be contaminated by HVHF industrialization. 7. No protection for most state aquifers9 Much of Upstate New York depends on water from Principal Aquifers, which have no protections under 560.4, whereas Primary Aquifers are specifically protected. There is no scientific basis for such disparate treatment. Indeed, no scientific basis is cited by the DEC for any of these proposed regulations. 8. No scientific basis for proposed regulations10 The DEC does not cite any scientific studies in the revised regulatory impact statement as the basis of any of the proposed regulations, though it is required to do so by law. In fact, the DEC does not cite any basis for its proposals at all no studies, no statistics, no reports, nothing are mentioned in its comments on the proposed regulations. One might be left to conclude that these regulations were merely crafted out of bureaucratic expediency with most input from the industry the DEC purports to regulate.11 9. The DEC misconstrues ECL 23 ECL 23 empowers the DEC to regulate oil and gas activities. Yet the DEC states that is empowered to promote oil and gas activities, not regulate them in 550.1 (a) its policy statement.

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http://www.scribd.com/doc/117440914/Fracking-Air-Pollution http://www.scribd.com/doc/117565414/No-Fracking-State-Lands 8 http://www.scribd.com/doc/72545747/Worst-Fracking-Regs 9 http://www.scribd.com/doc/117412293/Fracking-New-York-Aquifers 10 http://www.scribd.com/doc/117952461/Proposed-Regs-Not-Based-on-Science 11 http://www.scribd.com/doc/98812091/Who-Writes-New-York-s-Fracking-Regulations 3

10. Drilling and fracking fluids are poorly controlled12 Open pits are allowed for drilling mud on HVHF wells, and any open pit for flowback, fracking fluids, or drilling mud can be filled to the brim without any freeboard requirement between the fluid level and the top. In fact, the DEC inexplicably removed the freeboard requirement in 560.6 from the September 2011 draft of the regulations! 11. Tasking DMR with environmental oversight is a regulatory aberration13 By making the Division of Mineral Resources responsible for the environmental oversight of the HVHF permits it issues, the DEC has virtually guaranteed that regulatory protections will be lax. The DMR cannot serve two masters the oil and gas industry it seeks to promote and the environment, landowners and general protect, which it is tasked to protect. Most states have an agency with separate, autonomous environmental oversight over oil and gas activities. New York has no such separate oversight. Nor does the state have any state tax on gas production to pay for such regulatory oversight14 since it will derive no direct revenue from the industry - a phenomenon among states: a tax haven for frackers.

In my opinion, the Governor has frittered away an opportunity to bring New Yorks regulatory regime into the 21st century. Given the opportunity to create a paragon of regulatory oversight, he has allowed the rule-making process to be compromised such that the state would be little more than a gas colony of corporations from Oklahoma, Texas and Colorado because that is what the lobbyists from those states have paid for to the State of New Yorks disgrace. James L. Northrup New Northrup Road Pipe Creek, Texas

http://tinyurl.com/FrackingRegulations

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http://www.scribd.com/doc/117698600/Frack-Fluid-Regulations http://www.scribd.com/doc/100132075/New-York-s-Nonexistent-EnvironmentalAgency 14 http://www.scribd.com/doc/63145742/New-York-State-Gas-Production-Tax

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