Delaware River Basin Commission Proposes Draft Drilling Regulations

By:  Pamela S. Goodwin, Esq., Saul Ewing, LLP

Until Pennsylvania and New York develop standards and regulations protective of the Delaware River, New Jersey will oppose Marcellus Shale Gas-Drilling in the Delaware River Basin, according to New Jersey Department of Environmental Protection Commissioner, Robert Martin.

Martin sent a letter on December 7, 2010 to Carol Collier, Executive Director of the Delaware River Basin Commission (DRBC) encouraging the interstate agency to promulgate firm regulations to protect the Delaware River until Pennsylvania and New York establish regulations. “New Jersey remains concerned that fracking in the Marcellus Shale could negatively impact the Delaware River, which supplies approximately 25 percent of our state’s drinking water. As you know, while none of the shale formation itself is within New Jersey, it underlies more than a third of the Delaware River Basin. The cumulative effect of an estimated 10,000 wells to be drilled in the Basin could have a significant potential consequence for New Jersey residents who rely on the Delaware for drinking water.”

The DRBC is the creation of a compact between the federal government and the four states that share the Delaware River’s watershed — New York, New Jersey, Delaware and Pennsylvania. It is authorized to impose regulations with the intent of protecting the river and its watershed without regard to the political boundaries of the four states.

DRBC met yesterday and announced today that its proposed draft natural gas development regulations are now available for public review on its website. There is a ninety-day comment period, during which time public hearings will be held. The proposed regulations would require that water used for natural gas development projects come from water sources approved by the DRBC. The approval process is intended to protect minimum stream flows, provide a record of water transfers and otherwise ensure that water resources are not harmed. In order to mitigate the need to construct and operate new water sources, the proposed regulations include a streamlined approval process encouraging the use of existing DRBC-approved water sources. The proposed regulations can be found on the DRBC’s website at http://www.state.nj.us/drbc/.

Martin’s letter to the DRBC came on the heels of a similar request the day before made by New York Governor David Paterson. “Your proposed program, covering only a very small portion of New York … could well conflict with the technical and regulatory protocols ultimately adopted in New York, causing confusion, duplication, redundant regulatory fee assessments, differing regulations in different locations and possible mismanagement,” Paterson said. He urged the DRBC to participate with New York’s Department of Environmental Conservation, which is currently preparing its own environmental impact statement. Paterson also warned DRBC not to interfere with the regulatory prerogative of Governor-elect Andrew Cuomo’s incoming administration.

Marcellus Shale is a deeply buried rock formation believed to contain trillions of cubic feet of natural gas. The Marcellus Shale is located between one and two miles below the surface of the ground. The vast majority of Marcellus Shale is located in Pennsylvania, West Virginia, Maryland and Ohio, with some in New York and none in New Jersey. While some of the gas is located within the Delaware River Basin, much of it is located within the Susquehanna River Basin or other river basins, not subject to regulation by the DRBC.

Unlike traditional gas wells, the Marcellus wells begin vertically and then are turned horizontal when they reach the Marcellus Shale seam. The gas is extracted at significant depth, generally between one and two miles below the ground (in this region, groundwater is rarely found at depths below 1,000 feet with most groundwater found between the surface of the ground and 500 feet below the surface). In order to extract the natural gas from the Marcellus Shale developers must use a process known as ‘hydraulic fracturing,’ which involves pumping large amounts of water mixed with sand and other components into the shale formation under high pressure to break apart the shale underground. This allows the natural gas to be released from the rock. The fracking fluid must then be treated to remove chemicals before it can be discharged.

Pennsylvania has permitted extensive development of Marcellus Shale gas, unlike New York, which has established a moratorium on Marcellus shale drilling. The drilling of Marcellus gas in Pennsylvania has not been without controversy, with some parties claiming that natural gas and water from some fracking operations have entered ground and surface water supplies. The gas industry has strongly challenged the notion that activity located at the depths where the Marcellus gas is located would have surface impacts.

In his letter to the DRBC, Martin acknowledged that the natural gas buried beneath the Marcellus Shale “may be significant enough to supply the entire United States for decades,” but went on to say “we must not allow the promise of one significant resource to threaten the security of another, especially drinking water.”

Companies and individuals who want to learn more about the proposed regulations and comment opportunities may contact the author at 609-452-3109 or pgoodwin@nullsaul.com.

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