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SB3842 Text:

                STATE OF NEW YORK
                               2015-2016 Regular Sessions
                    IN SENATE
                                    February 20, 2015
        Introduced  by Sens. ESPAILLAT, HASSELL-THOMPSON, SQUADRON -- read twice
          and ordered printed, and when printed to be committed to the Committee
          on Environmental Conservation
        AN ACT to amend the environmental conservation law, in relation  to  the
          regulation of the drilling of natural gas resources
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Legislative intent. 1. The legislature finds that the proc-
     2  ess used to stimulate natural gas extraction referred  to  as  hydraulic
     3  fracturing utilizes components that are often toxic, that are non-biode-
     4  gradable,  and  that  are virtually impossible to remove once they enter
     5  the natural environment.  Thus, they pose such a high level of  environ-
     6  mental  risk  that  the  policy  of the state must be to insure they are
     7  excluded from any area that is significant  for  public  drinking  water
     8  resources or any other area that is environmentally sensitive.
     9    2.  Natural gas drilling is potentially highly transformative of rural
    10  landscapes, offering economic benefits to many landowners, but threaten-
    11  ing the property values of other  local  landowners,  traditional  rural
    12  economic  activity,  the  carrying capacity of local infrastructure, the
    13  natural habitat of wildlife, and the public health and quality  of  life
    14  of  residents  in  areas  where  there  is natural gas extraction taking
    15  place. Unless these resources are protected in the permitting and  regu-
    16  latory  processes of the state, the costs of Marcellus shale natural gas
    17  extraction will exceed the benefits  and  natural  gas  extraction  will
    18  become  a fundamentally unfair and divisive process in which the profits
    19  of some are subsidized by the costs to others.
    20    3. The proposed scope of natural gas drilling across the state of  New
    21  York  will  present  unprecedented  challenges  of regulatory oversight.
    22  Funding for such oversight must be sufficient to meet this challenge and
    23  should come from a series of fees paid  by  the  natural  gas  industry.
    24  Similarly, the natural gas industry should pay for all other costs asso-
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 3842                             2
     1  ciated  with  natural  gas extraction. Otherwise, natural gas extraction
     2  will be unfairly subsidized, either  by the New York state  taxpayer  or
     3  by the impacts on local human and natural resources.
     4    4.  One  of  the  chief environmental and infrastructure assets of the
     5  state of New York is its drinking water systems, which play a  fundamen-
     6  tal  role  in  the economic productivity and public health of the state.
     7  The legislature finds that no risk to these resources and to the  public
     8  health  of  their  users  is acceptable and that the policy of the state
     9  with respect to the management of shale gas extraction must be one of no
    10  drinking water risk.
    11    5. The purpose of this legislation is to insure that the  exploitation
    12  of shale natural gas resources is conducted in a manner that is consist-
    13  ent  with and supportive of New York state's commitment to sustainabili-
    14  ty, and is consistent with other state economic development, energy  and
    15  environmental policies.
    16    6.  Therefore,  in light of the many commitments the state of New York
    17  has made to more sustainable development and the critical role  greening
    18  the state's economy will play in the future prosperity of the state, the
    19  only  acceptable  natural  gas  extraction practices will be sustainable
    20  ones. This act is intended to ensure that that goal is met.
    21    § 2. Article 23 of the environmental conservation law  is  amended  by
    22  adding a new title 29 to read as follows:
    23                                   TITLE 29
    24                     REGULATION OF NATURAL GAS DRILLING
    25  Section 23-2901. Natural gas drilling; prohibition  near watershed.
    26          23-2903. Disclosure of hydraulic fracturing materials.
    27          23-2905. Protection of other environmental resources.
    28          23-2907. Protection of local resources.
    29          23-2909. Water withdrawals.
    30          23-2911. Enforcement and financial security.
    31          23-2913. Other provisions.
    32  § 23-2901. Natural gas drilling; prohibition near watershed.
    33    1.  Natural  gas  drilling  shall not be permitted within the New York
    34  city watershed or at any point within five miles of its boundary.
    35    2. Natural gas drilling shall not be permitted within the watershed of
    36  the Delaware River, in any recharge area of a sole  source  aquifer,  in
    37  any  area  where  groundwater  contributes  a  significant  base flow to
    38  surface water sources of drinking water, and in any other area where the
    39  department shall find presents a significant threat of  hydraulic  frac-
    40  turing compounds entering into a significant source of drinking water.
    41    3. Natural gas drilling shall be conducted in ways that do not contam-
    42  inate drinking water wells. In any area where natural gas drilling takes
    43  place and contamination of individual drinking water wells occurs, there
    44  shall  be a presumption that the natural gas drilling is responsible for
    45  such contamination unless the natural gas driller can show, by clear and
    46  convincing evidence, that such driller is not the source of the  contam-
    47  ination.  Upon  receiving  a report of an incident of well contamination
    48  from natural gas drilling, the department shall investigate such  report
    49  within twenty-four hours and shall have the authority to order immediate
    50  remedial  action,  including  issuing  immediate cease and desist orders
    51  with respect to the drilling activity.  In the event that the department
    52  is unable to investigate such report within twenty-four  hours,  it  may
    53  request  that local or state police authorities confirm the incident and
    54  report and, if confirmed, shall issue a cease and desist order  to  such
    55  driller  until it shall make such investigation and determine the proper
    56  course of insuring full remediation.

        S. 3842                             3
     1    4.  Any  spills  or  prohibited  discharges  of  hydraulic  fracturing
     2  compounds  shall  be  immediately reported by the natural gas driller to
     3  the department, which  shall  establish  procedures  for  recording  and
     4  reviewing  such  reports and for ordering remedial action to contain the
     5  spill  and keep the spill or discharge incident from being repeated. The
     6  department shall have the authority  to  impose  fines  for  failure  to
     7  report  such incidents, to order immediate cleanup of such spills at the
     8  expense of such driller and, should such driller fail  to  do  so  in  a
     9  timely  fashion,  to  enter  into  the  drilling area and do the cleanup
    10  itself, at the expense of such driller. In any instance where such dril-
    11  ler shall refuse to carry out a department cleanup  or  remedial  action
    12  order in a timely and appropriate manner, the department shall order all
    13  drilling  activity  to cease and desist until such time as the spill has
    14  been cleaned up and such driller has remediated the conditions or  prac-
    15  tices that caused the spill.
    16    5.  Any  driller  of  natural gas who knowingly attempts to cover up a
    17  spill or prohibited discharge shall be guilty of a class A  misdemeanor.
    18  Any driller of natural gas who knowingly discharges hydraulic fracturing
    19  compounds  into  the  surface  waters  of the state shall be guilty of a
    20  class E felony.
    21    6. Nothing in this title or any other law or regulation  shall  alter,
    22  limit,  impair  or  otherwise  affect  the authority of the state of New
    23  York, or the authority of the city of New York  in  the  New  York  city
    24  watershed,  to  take  whatever  measures  are necessary under the law to
    25  protect the quality and safety of the sources of the drinking waters  of
    26  New York state.
    27  § 23-2903. Disclosure of hydraulic fracturing materials.
    28    1. All components of hydraulic fracturing materials shall be disclosed
    29  to  the  department at the time of application for a well permit for the
    30  drilling of natural gas pursuant to this article.
    31    (a) Emergency health situation. When a health professional  determines
    32  that a medical emergency exists related to a hydraulic fracturing opera-
    33  tion  and  the ingredients and specific chemical identity of a hydraulic
    34  fracturing fluid is necessary for emergency  or first-aid treatment, the
    35  hydraulic fracturing operator shall immediately  disclose  the  specific
    36  chemical  identity  of  a  trade  secret chemical to the treating health
    37  professional, regardless of the existence of a written statement of need
    38  or a confidentiality agreement.
    39    (b) Non-emergency health situation.  When  a  health  professional  or
    40  government  agency determines that the ingredients and specific chemical
    41  identity of a hydraulic  fracturing  fluid  are  necessary  for  medical
    42  treatment,  an operator shall disclose a specific chemical identity to a
    43  health professional or government agency if a request has been  made  in
    44  writing  that  describes  with  reasonable  detail one or more health or
    45  safety needs for the information  and  includes  a  description  of  the
    46  procedures  to  be used to maintain the confidentiality of the disclosed
    47  information. The health professional or government agency shall agree in
    48  a written confidentiality agreement that the  trade  secret  information
    49  will  not  be  used for any purpose other than the health needs asserted
    50  and shall agree not to release the information under  any  circumstances
    51  other than to a health professional or government agency.
    52    2.  No natural gas driller may change the components or composition of
    53  hydraulic fracturing materials from those specified in its permit appli-
    54  cation without first filing for and receiving  a  modification  of  such
    55  permit.

        S. 3842                             4
     1    3.  The  department  shall establish a standard for the composition of
     2  hydraulic fracturing compounds and require natural gas drillers  to  use
     3  such  standard.  The department shall have the power to prohibit the use
     4  of specific chemicals in the composition of hydraulic fracturing materi-
     5  als.
     6    4. Hydraulic fracturing liquids and liquid waste from drilling may not
     7  be stored in open lagoons, but must be kept in corrosion proof tanks.
     8    5. Notwithstanding any other provision of law or administrative deter-
     9  mination,  hydraulic  fracturing material shall be regarded as hazardous
    10  waste and treated and disposed of as such.
    11    6. The department shall issue regulations requiring  the  tracking  of
    12  all chemical components of hydraulic fracturing materials and shall have
    13  the power to enforce such regulations by appropriate fines and cease and
    14  desist orders.
    15  § 23-2905. Protection of other environmental resources.
    16    1.  Drillers  of  natural  gas shall be responsible for mitigating all
    17  damage to any  regulated  environmental  resources,  including  but  not
    18  limited  to  air, wetlands, stream corridors, and endangered and threat-
    19  ened species habitat.
    20    2. Well permits for the drilling of natural gas shall not  be  granted
    21  in  any  area where such drilling shall adversely impact the recovery of
    22  threatened or endangered species or where it shall  destroy  or  degrade
    23  other  unique natural or scenic resources. Well permits for the drilling
    24  of natural gas shall not be granted in any area that  is  designated  as
    25  forever  wild  under  the state constitution or laws, in state parks, in
    26  areas identified for state acquisition and/or protection under the state
    27  open space plan, or in state forests and state parks.
    28    3. Applications for a well permit for  the  drilling  of  natural  gas
    29  shall  include  an  assessment  of  its  impact  on  local  biodiversity
    30  resources and a showing that such drilling shall be within the leasehold
    31  at the lowest impact point  on  wildlife.  To  minimize  impact  through
    32  either ground disturbance or traffic, all efforts shall be made to clus-
    33  ter  wells,  centralize  operations,  and  use  telemetry. If necessary,
    34  seasonal restrictions shall be imposed to protect wildlife  breeding  or
    35  migration.
    36    4.  Applications  for  a  well  permit for the drilling of natural gas
    37  shall list all expected emissions of air pollutants, including, but  not
    38  limited  to,  all greenhouse gases such as methane. The department shall
    39  have the authority to specify limits on all  such  air  emissions  as  a
    40  condition  of  granting  such  permit,  to require appropriate emissions
    41  monitoring and controls by the operator, and to deny  any  permit  whose
    42  operation  shall  be inconsistent with state policy and regulations with
    43  respect to addressing global warming.
    44  § 23-2907. Protection of local resources.
    45    1. The department shall have the authority to impose fees  to  compen-
    46  sate local government for any costs or impacts imposed upon such govern-
    47  ments as a result of drilling for natural gas.
    48    2.  The  department,  in  its permitting decisions, shall take care to
    49  insure that natural gas wells are situated in ways that  maximize  field
    50  productivity  while  minimizing  impacts  on  the  landscape.  For  this
    51  purpose, the department may, within specific regional  areas,  establish
    52  procedures  to require periodic batch processing of permit applications,
    53  including mandatory dates for application  submission,  and  may  impose
    54  well clustering, centralized operations, and the use of telemetry.
    55    3.  All siting of natural gas drilling activity shall conform to local
    56  zoning.

        S. 3842                             5
     1    4. Any permit holder shall be required, at the  end  of  its  drilling
     2  operations,  to  fully  restore  the  drill site to its previous natural
     3  condition. To enforce the provisions of  this  subdivision,  before  any
     4  land  clearing operations related to drilling are commenced, such permit
     5  holder  shall  file  with the department, a non-revocable and bankruptcy
     6  proof bond sufficient, under regulations to be issued by the department,
     7  to cover all foreseeable costs of site restoration.
     8    5. Gas drilling operations shall be conducted in a manner  that  shall
     9  not  burden  adjacent landowners and residents. No noise audible indoors
    10  in residences located on adjacent property shall  be  permitted  between
    11  the hours of 8:00 PM and 8:00 AM on weekdays and 6:00 PM and 10:00 AM on
    12  weekends. Similarly, night lighting shall not be obtrusive or disruptive
    13  of life for such adjacent landowners and residents. The department shall
    14  enforce  the  provisions  of this subdivision by appropriate regulations
    15  including a system of fines, and shall further have the power  to  issue
    16  cease  and  desist  orders  to enforce these protections and protect the
    17  quiet enjoyment of local residents.
    18    6. Landowners forced into a  production  pool  shall  be  entitled  to
    19  receive the highest payment that any other pool member receives.
    20    7.  Any  landowner  who  enters into a contract or lease to permit the
    21  drilling for natural gas on such landowner's property shall have a thir-
    22  ty day right of recission with respect to  such  contract.  During  such
    23  thirty  day  period, such landowner may cancel such contract or lease at
    24  any time without penalty.
    25    8. No well permit for the drilling of natural gas shall be granted for
    26  a period longer than ten years. Any permit under  which  actual  natural
    27  gas  extraction  is not undertaken within five years shall expire and be
    28  deemed null and void.
    29    9. The department, in consultation with the  attorney  general,  shall
    30  issue  guidance  documents  to  landowners, with respect to their rights
    31  with respect to natural gas drilling contracts and leases.  The  depart-
    32  ment  is  hereby  authorized  to  require  standard  provisions  in such
    33  contracts or leases in order to prevent unfair treatment of landowners.
    34    10. Notwithstanding any other provision of law, natural  gas  drillers
    35  shall  be  responsible  for  the costs of all environmental damage which
    36  occurred in the process of drilling for and extracting natural gas.  The
    37  department  may  require the provision of appropriate financial security
    38  to ensure landowners are protected from any contingent liability. Should
    39  drilling activity lead to designation as a brownfield site,  as  defined
    40  in subdivision two of section 27-1405 of this chapter, such driller, not
    41  the landowner, shall be considered to be party in the chain of responsi-
    42  bility.
    43  § 23-2909. Water withdrawals.
    44    All  surface  or  groundwater  withdrawals  of more than five thousand
    45  gallons a day for natural  gas  drilling  purposes,  or  more  than  one
    46  percent  of  in stream flow, shall require a permit from the department.
    47  The department  shall  issue  regulations  governing  such  withdrawals,
    48  including  provisions  to  assure  that water withdrawals are limited to
    49  levels that do not harm stream ecology or fishery resources.
    50  § 23-2911. Enforcement and financial security.
    51    1. No permit for the drilling of natural gas shall be granted if  such
    52  applicant has failed to meet his environmental and financial obligations
    53  under  a  previous  permit  or  if  such  applicant has unpaid financial
    54  liabilities to either the state, a local government or a  private  land-
    55  owner.

        S. 3842                             6
     1    2.  In determining whether or not a permit for the drilling of natural
     2  gas shall be granted, the department shall  consider  the  prior  record
     3  under  previous  permits  of  the applicant. Applicants who have shown a
     4  pattern of violation of permit conditions or a lack of a proper standard
     5  of care in drilling operations shall not be granted a permit.
     6    3.  A  permit for the drilling of natural gas shall include applicable
     7  lease documents between the drilling company and the landowner or  land-
     8  owners for the drilling site for which the application is made.
     9    4.  A  permit  application  shall include a comprehensive hydrological
    10  assessment of the subsurface strata  including  the  potential  for  any
    11  fissuring  that  would  draw  hydraulic fracturing fluid, natural gas or
    12  other pollutants into water bearing aquifer strata.
    13    5. The department shall provide for  unannounced  inspections  of  all
    14  natural  gas  drilling  sites  and  for the provision of soil testing to
    15  determine the presence of unreported spills.
    16    6. The department  shall  require  that  all  casing  construction  be
    17  carried  out  in  the presence of independent quality control engineers.
    18  The department shall have the authority to specify standards for  casing
    19  construction,  including  composition  of  concrete  and other technical
    20  parameters for deep well construction to insure maximum casing integrity
    21  and prevent leakage of hydraulic fracturing compounds, natural  gas  and
    22  other  subsurface  materials  into  water bearing strata. The department
    23  shall, over the life of the well,  carry  out  periodic  inspections  to
    24  ensure that casing integrity is maintained.
    25  § 23-2913. Other provisions.
    26    1.  The state comptroller shall annually audit all royalty payments to
    27  the state and local governments, including the gas production and  sales
    28  figures on which they are based, and shall have the authority to require
    29  appropriate  fiscal  reporting  and  record  keeping by both natural gas
    30  producers and other departments of state government charged  with  their
    31  supervision.
    32    2.  The  state  comptroller  shall  have the authority to periodically
    33  audit payments made under drilling contracts and leases to private land-
    34  owners, including the gas production and sales figures on which they are
    35  based, to determine that they are in compliance with the  provisions  of
    36  the contract or lease and all applicable laws.
    37    3.  The  department  shall  establish  an impartial technical advisory
    38  committee, whose research and work shall be supported by permit fees, to
    39  review and issue guidance documents  on  gas  drilling  best  practices.
    40  Such  committee  shall  include  at  least  one  representative from the
    41  following interest  groups:  the  environmental  community;  the  public
    42  health community; and the gas drilling industry, along with persons from
    43  the  department or others the department deems appropriate.  The depart-
    44  ment may require compliance with such practices as a condition of permit
    45  approval.
    46    § 3. This act shall take effect on the one hundred twentieth day after
    47  it shall have become a law, provided, however, that effective immediate-
    48  ly, the addition, amendment and/or repeal  of  any  rule  or  regulation
    49  necessary  for  the  implementation of this act on its effective date is
    50  authorized to be made and completed on or before such date.
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