ML12339A603

Official Exhibit - ENT000499-00-BD01 - Revised Draft Supplemental Generic Environmental Impact Statement on the Oil, Gas and Solution Mining Regulatory Program

ML12339A603
Person / Time
Site:	Indian Point
Issue date:	09/07/2011
From:	State of NY, Dept of Environmental Conservation
To:	Atomic Safety and Licensing Board Panel
SECY RAS
References
RAS 22161, 50-247-LR, 50-286-LR, ASLBP 07-858-03-LR-BD01
Download: ML12339A603 (34)

Text

United States Nuclear Regulatory Commission Official Hearing Exhibit Entergy Nuclear Operations, Inc.

In the Matter of:

(Indian Point Nuclear Generating Units 2 and 3)

ASLBP #: 07-858-03-LR-BD01 Docket #: 05000247 l 05000286 Exhibit #: ENT000499-00-BD01 Identified: 10/15/2012 Admitted: 10/15/2012 Withdrawn:

Rejected: Stricken: ENT000499 Other: Submitted: March 30, 2012 New York State Department of Environmental Conservation Revised Draft Supplemental Generic Environmental Impact Statement On The Oil, Gas and Solution Mining Regulatory Program Well Permit Issuance for Horizontal Drilling and High-Volume Hydraulic Fracturing to Develop the Marcellus Shale and Other Low-Permeability Gas Reservoirs Lead Agency:

NYSDEC, 625 Broadway, Albany, NY 12233 Lead Agency

Contact:

Eugene Leff NYSDEC, 625 Broadway, 14th Floor Albany, NY 12233 (518) 402-8044 Action Location: Statewide Comments Due By: December 12, 2011 Prepared By:

NYSDEC, with Assistance from Alpha Environmental, Inc., Ecology and Environment Engineering, P.C., ICF International, URS Corp, NTC Consultants and Sammons/Dutton LLC.

Date of Completion of dSGEIS: September 30, 2009 Date of Completion of Revised dSGEIS: September 7, 2011

REVISED DRAFT Supplemental Generic Environmental Impact Statement On The Oil, Gas and Solution Mining Regulatory Program Well Permit Issuance for Horizontal Drilling And High-Volume Hydraulic Fracturing to Develop the Marcellus Shale and Other Low-Permeability Gas Reservoirs Prepared By:

NYSDEC DIVISION OF WATER NYSDEC DIVISION OF AIR RESOURCES NYSDEC DIVISION OF LANDS AND FORESTS NYSDEC DIVISION OF FISH, WILDLIFE & MARINE RESOURCES Coordinated and Edited By:

NYSDEC DIVISION OF MINERAL RESOURCES Assisted By:

Ecology and Environment Engineering, P.C.

NEW YORK STATE ENERGY RESEARCH & DEVELOPMENT AUTHORITY*

NEW YORK STATE DEPARTMENT OF HEALTH Bureau of Water Supply Protection Bureau of Toxic Substance Assessment Bureau of Environmental Radiation Protection NYSDEC OFFICE OF CLIMATE CHANGE NYSDEC DIVISION OF MATERIALS MANAGEMENT NYSDEC DIVISION OF ENVIRONMENTAL PERMITS NYSDEC DIVISION OF ENVIRONMENTAL REMEDIATION

• NYSERDA research assistance for September 2009 draft SGEIS contracted to Alpha Environmental Inc., ICF International, URS Corporation and NTC Consultants. NYSERDA research assistance for 2011 revised draft contracted to Alpha Geological Services, Inc., URS Corporation, NTC Consultants and Sammons/Dutton LLC.

This page intentionally left blank.

New York State DEC DEC Executive Summary Revised Draft Supplemental Generic Environmental Impact Statement

This page intentionally left blank.

EXECUTIVE

SUMMARY

High-volume hydraulic fracturing is a well stimulation technique that has greatly increased the ability to extract natural gas from very tight rock. High-volume hydraulic fracturing, which is often used in conjunction with horizontal drilling and multi-well pad development, is an approach to extracting natural gas in New York that raises new, potentially significant, adverse impacts not studied in 1992 in the Department of Environmental Conservations (Department or DEC) previous Generic Environmental Impact Statement (1992 GEIS) on the Oil, Gas and Solution Mining Regulatory Program. 1 Increased production of domestic natural gas resources from deep underground shale deposits in other parts of the country has dramatically altered future energy supply projections and has the promise of lowering costs for users and purchasers of this energy commodity.

High-volume hydraulic fracturing is distinct from other types of well completion that have been allowed in the State under the 1992 GEIS and Department permits due to the much larger volumes of water and additives used to conduct hydraulic fracturing operations. The use of high-volume hydraulic fracturing with horizontal well drilling technology provides for a number of wells to be drilled from a single well pad (multi-pad wells). Although horizontal drilling results in fewer well pads than traditional vertical well drilling, the pads are larger and the industrial activity taking place on the pads is more intense. Also, hydraulic fracturing requires chemical additives, some of which may pose hazards when highly concentrated. The extra water associated with such drilling may also result in significant adverse impacts relating to water supplies, wastewater treatment and disposal and truck traffic. Horizontal wells also generate greater volumes of drilling waste (cuttings). The industry projections of the level of drilling, as 1

The Generic Environmental Impact Statement (1992 GEIS) on the Oil, Gas and Solution Mining Regulatory Program is posted on the Departments website at http://www.dec.ny.gov/energy/45912.html. The 1992 GEIS includes an analysis of impacts from vertical gas drilling as well as hydraulic fracturing. Since 1992 the Department has used the 1992 GEIS as the basis of its State Environmental Quality Review Act (SEQRA) review for permit applications for gas drilling in New York State.

Revised Draft SGEIS 2011, Executive Summary, Page 1

reflected in the intense development activity in neighboring Pennsylvania, has raised additional concerns relating to community character and socioeconomics.

General Background In New York, the primary target for shale-gas development is currently the Marcellus Shale, with the deeper Utica Shale also identified as a potential resource. Additional low-permeability reservoirs may be considered by project sponsors for development by high-volume hydraulic fracturing. The Department has received applications for permits to drill horizontal wells to evaluate and develop the Marcellus Shale for natural gas production by high-volume hydraulic fracturing.

The Department has prepared this revised draft Supplemental Generic Environmental Impact Statement (draft SGEIS, dSGEIS, or draft Supplement) to satisfy the requirements of the State Environmental Quality Review Act (SEQRA) by studying the new technique and identifying potential new significant adverse impacts for these anticipated operations. Additionally, the Department prepared this draft SGEIS to satisfy the requirements of the SEQRA for the future enactment of revisions or additions to the Departments regulations associated with high-volume hydraulic fracturing. In reviewing and processing permit applications for high-volume hydraulic fracturing in these deep, low-permeability formations, the Department would apply the requirements contained within regulations, along with the final SGEIS and the findings drawn from it, including criteria and conditions for future approvals, in conjunction with the 1992 GEIS.

The final SGEIS will apply statewide, except in areas that the Department proposes should be off-limits to surface drilling for natural gas using high-volume hydraulic fracturing technology.

As explained below, these areas include the watersheds associated with unfiltered water supplied to the New York City and Syracuse areas pursuant to Filtration Avoidance Determinations issued by the U.S. Environmental Protection Agency (EPA), reforestation areas, wildlife management areas, and primary aquifers as defined by State regulations, and additional setback and buffer areas. Forest Preserve land in the Adirondacks and Catskills is already off-limits to natural gas development pursuant to the New York State Constitution.

Revised Draft SGEIS 2011, Executive Summary, Page 2

SEQRA Procedure to Date The public process to develop the dSGEIS began with public scoping sessions in the autumn of 2008. Since then, engineers, geologists and other scientists and specialists in all of the Departments natural resources and environmental quality programs have collaborated to comprehensively analyze a vast amount of information about the proposed operations and the potential significant adverse impacts of these operations on the environment, identify mitigation measures that would prevent or minimize any significant adverse impacts, and identify criteria and conditions for future permit approvals and other regulatory action.

In September 2009, the Department issued a dSGEIS (2009 dSGEIS) for public review and comment. The extensive public comments revealed a significant concern with potential contamination of groundwater and surface drinking water supplies that could result from this new technology. Concerns raised included comments that the 2009 dSGEIS did not fully study the potential for gas migration from this new stimulation technique, or adequately consider impacts from disposal of solid and liquid wastes. Additionally, commenters stated the 2009 dSGEIS did not contain sufficient consideration of visual, noise, traffic, community character or socioeconomic impacts. Accordingly, in 2010 Governor Paterson ordered the Department to issue a revised dSGEIS on or about June 1, 2011. The Executive Order also provided that no permits authorizing high-volume hydraulic fracturing would be issued until the SGEIS was finalized.

Since the issuance of the 2009 draft SGEIS, the Department has gained a more detailed understanding of the potential impacts associated with horizontal drilling from: (i) the extensive public comments from environmental organizations, municipalities, industry groups and other members of the public; (ii) its review of reports and studies of proposed operations prepared by industry groups; (iii) extensive consultations with scientists in several bureaus within the New York State Department of Health (NYSDOH); (iv) the use of outside consulting firms to prepare analyses relating to socioeconomic impacts, as well as impacts on community character, visual, noise and traffic impacts; and, (v) its review of information and data from the Pennsylvania Department of Environmental Protection (PADEP) and the Susquehanna River Basin Commission (SRBC) about events, regulations, enforcement and other matters associated with Revised Draft SGEIS 2011, Executive Summary, Page 3

ongoing Marcellus Shale development in Pennsylvania. In June 2011, moreover, Commissioner Joseph Martens and Department staff visited a well pad in LeRoy, Pennsylvania, where contaminants had discharged from the well pad into an adjacent stream, and had further conversations with industry representatives and public officials about that event and high-volume hydraulic fracturing operations in Pennsylvania generally.

The Draft SGEIS The draft SGEIS contains revised and additional analyses relating to high-volume hydraulic fracturing operations compared to the 2009 dSGEIS and the preliminary draft released earlier this year. The draft SGEIS, which is summarized below, supersedes those earlier versions and the expectation is that public comment will focus on the revisions made since the 2009 dSGEIS.

For ease of comparison by the public, this document underscores revised or additional discussion from the 2009 draft, and indicates where text from the 2009 draft has been omitted.

Chapter 1 - Introduction This Chapter contains an introduction to the dSGEIS. The Chapter summarizes the changes in high-volume hydraulic fracturing operations seen since the 2009 SGEIS, describes the methodology of this environmental review, and highlights enhanced mitigation and new precautionary measures incorporated into the document.

Chapter 2 - Description of Proposed Action This Chapter includes a discussion of the purpose, public need and benefit of proposed high-volume hydraulic fracturing operations, as well as the potential locations, projected activity levels and environmental setting for such operations. Information on the environmental setting focuses on topics determined during scoping to require attention in the SGEIS. The Department has determined, based on industry projections, that it may receive applications to drill approximately 1,700 - 2,500 horizontal and vertical wells for development of the Marcellus Shale by high-volume hydraulic fracturing during a peak development year. An average year may see 1,600 or more applications. Development of the Marcellus Shale in New York may occur over a 30-year period. Those peak and average levels of development are the assumptions Revised Draft SGEIS 2011, Executive Summary, Page 4

upon which the analyses contained in this dSGEIS are based. A consultant to the Department has completed a draft estimate of the potential economic and public benefits of proposed high-volume hydraulic fracturing development, including an analysis based on an average development scenario as well as a more conservative low potential development scenario. That analysis calculates for each scenario the total economic value to the proposed operations, potential state and local tax revenue, and projected total job creation.

Chapter 3 - Proposed SEQRA Review Process This Chapter describes how the Department intends to use the 1992 GEIS and the final SGEIS in reviewing applications to conduct high-volume hydraulic fracturing operations in New York State. It describes the proposed Environmental Assessment Form (EAF) addendum requirements that would be used in connection with high-volume hydraulic fracturing applications, and also identifies those potential activities that would require site-specific SEQRA determinations of significance after the SGEIS is completed. Specifically, Chapter 3 states that site-specific environmental assessments and SEQRA determinations of significance would be required for the following types of high-volume hydraulic fracturing applications, regardless of the target formation, the number of wells drilled on the pad and whether the wells are vertical or horizontal:

1) Any proposed high-volume hydraulic fracturing where the top of the target fracture zone is shallower than 2,000 feet along a part of the proposed length of the wellbore;

2) Any proposed high-volume hydraulic fracturing where the top of the target fracture zone at any point along the entire proposed length of the wellbore is less than 1,000 feet below the base of a known fresh water supply;

3) Any proposed well pad within the boundaries of a principal aquifer, or outside but within 500 feet of the boundaries of a principal aquifer;

4) Any proposed well pad within 150 feet of a perennial or intermittent stream, storm drain, lake or pond;

5) A proposed surface water withdrawal that is found not to be consistent with the Departments preferred passby flow methodology as described in Chapter 7; and Revised Draft SGEIS 2011, Executive Summary, Page 5

6) Any proposed well location determined by the New York City Department of Environmental Protection (NYCDEP) to be within 1,000 feet of its subsurface water supply infrastructure.

In all of the aforementioned circumstances a site-specific SEQRA assessment is required because such application is either beyond the scope of the analyses contained in this draft SGEIS or the Department has determined that proposed activities in these areas raise environmental issues that necessitate a site-specific review.

Chapter 3 also identifies the Departments oil and gas well regulations, located at 6 NYCRR Part 550, and it discusses the existence of other regulations and mitigation measures described in this draft SGEIS related to high-volume hydraulic fracturing. For a number of these measures, the Department will propose revisions or additions to its regulations. This chapter discusses how proposed revisions and additions to regulations are part of the environmental review of this draft SGEIS and how the State Administrative Procedure Act process for rulemaking will consider additional impacts of these regulatory actions. These two processes will ensure full review of the proposed environmental controls for high-volume hydraulic fracturing.

Chapter 4 - Geology Chapter 4 supplements the geology discussion in the 1992 GEIS (Chapter 5) with additional details about the Marcellus and Utica Shales, seismicity in New York State, naturally occurring radioactive materials (NORM) in the Marcellus Shale and naturally occurring methane in New York State. Chapter 4 does not contain significant revisions or additions from the 2009 dSGEIS.

Chapter 5 - Natural Gas Development Activities & High-Volume Hydraulic Fracturing This Chapter comprehensively describes the activities associated with high-volume hydraulic fracturing and multi-well pad drilling, including the composition of hydraulic fracturing additives and flowback water characteristics. It is based on the most recent up-to-date description of proposed activities provided by industry and informed by high-volume hydraulic fracturing operations currently ongoing in Pennsylvania and elsewhere. In this Chapter, the average disturbance associated with a multi-well pad, access road and proportionate infrastructure during the drilling and fracturing stage is estimated at 7.4 acres, compared to the Revised Draft SGEIS 2011, Executive Summary, Page 6

average disturbance associated with a well pad for a single vertical well during the drilling and fracturing stage, which is estimated at 4.8 acres. As a result of required partial reclamation, the average well pad would generally be reduced to averages of about 5.5 acres and 4.5 acres, respectively, during the production phase.

This Chapter describes the process for constructing access roads, and observes that because most shale gas development would consist of several wells on a multi-well pad, more than one well would be serviced by a single access road instead of one well per access road as was typically the case when the 1992 GEIS was prepared. Therefore, in areas developed by horizontal drilling using multi-well pads, it is expected that fewer access roads as a function of the number of wells would be constructed. Industry estimates that 90% of the wells used to develop the Marcellus Shale would be horizontal wells located on multi-well pads. This method provides the most flexibility to avoid environmentally sensitive locations within the acreage to be developed.

With respect to overall land disturbance from a horizontal drilling, there would be a larger surface area used for an individual multi-well pad. This would be more than offset, however, by the fewer total number of well pads required within a given area and the need for only a single access road and gas gathering system to service multiple wells on a single pad. Overall, there clearly is a smaller total area of land disturbance associated with horizontal wells for shale gas development than that for vertical wells. For example, a spacing of 40 acres per well for vertical shale gas wells would result in, on average, 70 - 80 acres of disturbance for the well pads, access roads and utility corridors (4.8 acres per well) to develop an area of 640 acres. A single well pad with 6 to 8 horizontal shale gas wells could access all 640 acres with only 7 to 8 acres of total land disturbance.

Chapter 5 describes the constituents of drilling mud and the containment of drilling cuttings, through either a lined on-site reserve pit or in a closed-loop tank system. This Chapter also calculates the projected volume of cuttings and the potential for such cuttings to contain NORM.

This Chapter also discusses the hydraulic fracturing process, the composition of fracturing fluid, on-site storage and handling and transport of fracturing additives. The high-volume hydraulic fracturing process involves the controlled use of water and chemical additives, pumped under Revised Draft SGEIS 2011, Executive Summary, Page 7

pressure into the cased and cemented wellbore. To protect fresh water zones and isolate the target hydrocarbon-bearing zone, hydraulic fracturing does not occur until after the well is cased and cemented, and typically after the drilling rig and its associated equipment are removed from the well pad. Chapter 5 explains that the Department would generally require at least three strings of cemented casing in the well during fracturing operations. The outer string (i.e., surface casing) would extend below fresh ground water and would have been cemented to the surface before the well was drilled deeper. The intermediate casing string, also called protective string, is installed between the surface and production strings. The innermost casing string (i.e.,

production casing) typically extends from the ground surface to the toe of the horizontal well.

The fluid used for high-volume hydraulic fracturing is typically comprised of more than 98%

fresh water and sand, with chemical additives comprising 2% or less of the fluid. The Department has collected compositional information on many of the additives proposed for use in fracturing shale formations in New York directly from chemical suppliers and service companies and those additives are identified and discussed in detail in Chapter 5. It is estimated that 2.4 million to 7.8 million gallons of water may be used for a multi-stage hydraulic fracturing procedure in a typical 4,000-foot lateral wellbore. Water may be delivered by truck or pipeline directly from the source to the well pad, or may be delivered by trucks or pipeline from centralized water storage or staging facilities consisting of tanks or engineered impoundments.

After the hydraulic fracturing procedure is completed and pressure is released, the direction of fluid flow reverses. The well is cleaned up by allowing water and excess proppant (typically sand) to flow up through the wellbore to the surface. Both the process and the returned water are commonly referred to as flowback. Chapter 5 discusses the volume, characteristics, recycling and disposal of flowback water. The dSGEIS estimates flowback water volume to range from 216,000 gallons to 2.7 million gallons per well, based on a pumped fluid estimate of 2.4 million to 7.8 million gallons.

Finally, Chapter 5 provides estimates of potential gas production from high-volume hydraulic fracturing operations and also discusses waste disposal associated with high-volume hydraulic fracturing operations, including disposal of cuttings, flowback and production brine Revised Draft SGEIS 2011, Executive Summary, Page 8

Chapter 6 - Potential Environmental Impacts This chapter identifies and evaluates the potential significant adverse impacts associated with high-volume hydraulic fracturing operations and, like other chapters, should be read as a supplement to the 1992 GEIS.

Water Resources Impacts Potential significant adverse impacts on water resources exist with regard to water withdrawals for hydraulic fracturing; stormwater runoff; surface spills, leaks and pit or surface impoundment failures; groundwater impacts associated with well drilling and construction; waste disposal and New York Citys subsurface water supply infrastructure. During the public scoping process, additional concerns were raised relating to the potential degradation of New York Citys surface drinking water supply and potential groundwater contamination from the hydraulic fracturing procedure itself.

Water for hydraulic fracturing may be obtained by withdrawing it from surface water bodies away from the well site or through new or existing water-supply wells drilled into aquifers.

Chapter 6 concludes that, without proper controls on the rate, timing and location of such water withdrawals, the cumulative impacts of such withdrawals could cause modifications to groundwater levels, surface water levels, and stream flow that could result in significant adverse impacts, including but not limited to impacts to the aquatic ecosystem, downstream river channel and riparian resources, wetlands, and aquifer supplies.

Using an industry estimate of a yearly peak activity in New York of 2,462 wells, the dSGEIS estimates that high-volume hydraulic fracturing would result in a calculated peak annual fresh water usage of 9 billion gallons. Total daily fresh water withdrawal in New York has been estimated at about 10.3 billion gallons. This equates to an annual total of about 3.8 trillion gallons. Based on this calculation, at peak activity high-volume hydraulic fracturing would result in increased demand for fresh water in New York of 0.24%. Thus, water usage for high-volume hydraulic fracturing represents a very small percentage of water usage throughout the state. Nevertheless, as noted, the cumulative impact of water withdrawals, if such withdrawals Revised Draft SGEIS 2011, Executive Summary, Page 9

were temporally proximate and from the same water resource, could potentially be significant.

The mitigation measures to ensure that such impacts are prevented are described in Chapter 7, summarized below.

Chapter 6 also describes the potential impacts on water resources from stormwater flow associated with the construction and operation of high-volume hydraulic fracturing well pads.

All phases of natural gas well development, from initial land clearing for access roads, equipment staging areas and well pads, to drilling and fracturing operations, production and final reclamation, have the potential to cause water resource impacts during rain and snow melt events if stormwater is not properly managed. Proposed mitigation measures to prevent significant adverse impacts from stormwater runoff are described in Chapter 7.

The dSGEIS concludes that spills or releases in connection with high-volume hydraulic fracturing could have significant adverse impacts on water resources. The dSGEIS identifies a significant number of contaminants contained in fracturing additives, or otherwise associated with high-volume hydraulic fracturing operations. Spills or releases can occur as a result of tank ruptures, equipment or surface impoundment failures, overfills, vandalism, accidents (including vehicle collisions), ground fires, or improper operations. Spilled, leaked or released fluids could flow to a surface water body or infiltrate the ground, reaching subsurface soils and aquifers.

Proposed mitigation measures to prevent significant adverse impacts from spills and releases are described in Chapter 7.

Chapter 6 also assesses the potential significant adverse impacts on groundwater resources from well drilling and construction associated with high-volume hydraulic fracturing. Those potential impacts include impacts from turbidity, fluids pumped into or flowing from rock formations penetrated by the well, and contamination from natural gas present in the rock formations penetrated by the well. The dSGEIS concludes that these potential impacts are not unique to horizontal wells or high-volume hydraulic fracturing and are described and fully assessed in the 1992 GEIS. Nevertheless, because of the concentrated nature of the activity on multi-well pads and the larger fluid volumes and pressures associated with high-volume hydraulic fracturing, enhanced procedures and mitigation measures are proposed and described in Chapter 7.

Revised Draft SGEIS 2011, Executive Summary, Page 10

A supporting study for this dSGEIS concludes that it is highly unlikely that groundwater contamination would occur by fluids escaping from the wellbore for hydraulic fracturing. The 2009 dSGEIS further observes that regulatory officials from 15 states recently testified that groundwater contamination as a result of the hydraulic fracturing process in the tight formation itself has not occurred.

The dSGEIS explains that the potential migration of natural gas to a water well, which presents a safety hazard because of its combustible and asphyxiant nature, especially if the natural gas builds up in an enclosed space such as a well shed, house or garage, was fully addressed in the 1992 GEIS. Well construction associated with high-volume hydraulic fracturing presents no new significant adverse impacts with regard to potential gas migration. Gas migration is a result of poor well construction (i.e., casing and cement problems). As with all gas drilling, well construction practices mandated in New York are designed to prevent gas migration. Those practices would also minimize the risk of migration of other formation fluids such as oil or brine.

The dSGEIS acknowledges that migration of naturally-occurring methane from wetlands, landfills and shallow bedrock can also contaminate water supplies independently or in the absence of any nearby oil and gas activities. Section 4.7 of this dSGEIS explains how the natural occurrence of shallow methane in New York can affect water wells unrelated to natural gas development.

Chapters 5 and 6 contain analyses that demonstrate that no significant adverse impact to water resources is likely to occur due to underground vertical migration of fracturing fluids through the shale formations. The developable shale formations are vertically separated from potential freshwater aquifers by at least 1,000 feet of sandstones and shales of moderate to low permeability. In fact, most of the bedrock formations above the Marcellus Shale are other shales.

That shales must be hydraulically fractured to produce fluids is evidence that these types of rock formations do not readily transmit fluids. The high salinity of native water in the Marcellus and other Devonian shales is evidence that fluid has been trapped in the pore spaces for hundreds of millions of years, implying that there is no mechanism for discharge of fluids to other formations.

Revised Draft SGEIS 2011, Executive Summary, Page 11

Hydraulic fracturing is engineered to target the prospective hydrocarbon-producing zone. The induced fractures create a pathway to the intended wellbore, but do not create a discharge mechanism or pathway beyond the fractured zone where none existed before. The pressure differential that pushes fracturing fluid into the formation is diminished once the rock has fractured, and is reversed toward the wellbore during the flowback and production phases.

Accordingly, there is no likelihood of significant adverse impacts from the underground migration of fracturing fluids.

No significant adverse impacts are identified with regard to the disposal of liquid wastes.

Drilling and fracturing fluids, mud-drilled cuttings, pit liners, flowback water and produced brine, although classified as non-hazardous industrial waste, must be hauled under a New York State Part 364 waste transporter permit issued by the Department. Furthermore, as discussed in Chapter 7, any environmental risk posed by the improper discharge of liquid wastes would be addressed through the institution of a waste tracking procedure similar to that which is required for medical waste, even though the hazards are not equivalent. Another concern relates to potential spills as a result of trucking accidents. Information about traffic management related to high-volume hydraulic fracturing is discussed in Chapter 7.

The disposal of flowback water could cause a significant adverse impact if the wastewater was not properly treated prior to disposal. Residual fracturing chemicals and naturally-occurring constituents from the rock formation could be present in flowback water and could result in treatment, sludge disposal, and receiving-water impacts. Salts and dissolved solids may not be sufficiently treated by municipal biological treatment and/or other treatment technologies which are not designed to remove pollutants of this nature. Mitigation measures have been identified that would eliminate any potential significant adverse impact from flowback water or treatment of other liquid wastes associated with high-volume hydraulic fracturing.

The Department is not proposing to alter its 1992 GEIS Finding that proposed disposal wells require individual site-specific review under SEQRA. Therefore, the potential for significant adverse environmental impacts from any proposal to inject flowback water from high-volume hydraulic fracturing into a disposal well would be reviewed on a site-specific basis with Revised Draft SGEIS 2011, Executive Summary, Page 12

consideration to local geology (including faults and seismicity), hydrogeology, nearby wellbores or other potential conduits for fluid migration and other pertinent site-specific factors.

The 1992 GEIS summarized the potential impacts of flood damage relative to mud or reserve pits, brine and oil tanks, other fluid tanks, brush debris, erosion and topsoil, bulk supplies (including additives) and accidents. Those potential impacts are equally applicable to high-volume hydraulic fracturing operations. Severe flooding is described as one of the few ways that bulk supplies such as additives might accidentally enter the environment in large quantities.

Mitigation measures to ensure that significant adverse impacts from floods do not occur in connection with high-volume hydraulic fracturing operations are identified and recommended in Chapter 7.

Gamma ray logs from deep wells drilled in New York over the past several decades show the Marcellus Shale to be higher in radioactivity than other bedrock formations including other potential reservoirs that could be developed by high-volume hydraulic fracturing. However, based on the analytical results from field-screening and gamma ray spectroscopy performed on samples of Marcellus Shale NORM levels in cuttings are not significant because the levels are similar to those naturally encountered in the surrounding environment. As explained in Chapter 5, the total volume of drill cuttings produced from drilling a horizontal well may be about 40%

greater than that for a conventional, vertical well. For multi-well pads, cuttings volume would be multiplied by the number of wells on the pad. The potential water resources impact associated with the greater volume of drill cuttings from multiple horizontal well drilling operations would arise from the retention of cuttings during drilling, necessitating a larger reserve pit that may be present for a longer period of time, unless the cuttings are directed into tanks as part of a closed-loop tank system.

Impacts on Ecosystems and Wildlife The dSGEIS has been revised to expand the analysis of the potential significant adverse impacts on ecosystems and wildlife from high-volume hydraulic fracturing operations. Four areas of concern related to high-volume hydraulic fracturing are: (1) fragmentation of habitat; (2)

Revised Draft SGEIS 2011, Executive Summary, Page 13

potential transfer of invasive species; (3) impacts to endangered and threatened species; and (4) use of state-owned lands.

The dSGEIS concludes that high-volume hydraulic fracturing operations would have a significant impact on the environment because such operations have the potential to draw substantial development into New York, which would result in unavoidable impacts to habitats (fragmentation, loss of connectivity, degradation, etc.), species distributions and populations, and overall natural resource biodiversity. Habitat loss, conversion, and fragmentation (both short-term and long-term) would result from land grading and clearing, and the construction of well pads, roads, pipelines, and other infrastructure associated with gas drilling. Partial mitigation of such impacts is identified in Chapter 7.

The number of vehicle trips associated with high-volume hydraulic fracturing, particularly at multi-well sites, has been identified as an activity which presents the opportunity to transfer invasive terrestrial species. Surface water withdrawals also have the potential to transfer invasive aquatic species. The introduction of terrestrial and aquatic invasive species would have a significant adverse impact on the environment.

State-owned lands play a unique role in New Yorks landscape because they are managed under public ownership to allow for sustainable use of natural resources, provide recreational opportunities for all New Yorkers, and provide important wildlife habitat and open space. Given the level of development expected for multi-pad horizontal drilling, the dSGEIS anticipates that there would be additional pressure for surface disturbance on State lands. Surface disturbance associated with gas extraction could have an impact on habitats on State lands, and recreational use of those lands, especially large contiguous forest patches that are valuable because they sustain wide-ranging forest species, and provide more habitat for forest interior species.

The area underlain by the Marcellus Shale includes both terrestrial and aquatic habitat for 18 animal species listed as endangered or threatened in New York State that are protected under the State Endangered Species Law (ECL 11-0535) and associated regulations (6 NYCRR Part 182).

Endangered and threatened wildlife may be adversely impacted through project actions such as clearing, grading and road building that occur within the habitats that they occupy. Certain Revised Draft SGEIS 2011, Executive Summary, Page 14

species are unable to avoid direct impact due to their inherent poor mobility (e.g., Blandings turtle, club shell mussel). Certain actions, such as clearing of vegetation or alteration of stream beds, can also result in the loss of nesting and spawning areas.

Mitigation for potentially significant adverse impacts from potential transfer of invasive species or from use of State lands, and mitigation for potential impacts to endangered and threatened species is identified in Chapter 7.

Impacts on Air Resources Chapter 6 of the dSGEIS provides a comprehensive list of federal and New York State regulations that apply to potential air emissions and air quality impacts associated with the drilling, completion (hydraulic fracturing and flowback) and production phases (processing, transmission and storage). The revised Chapter includes a regulatory assessment of the various air pollution sources and the air permitting process, as well as a supplemental analysis of impacts not addressed in the 2009 dSGEIS. The review of potential air impacts and expanded analyses accounts for information acquired subsequent to the initial review.

As part of the Departments effort to address the potential air quality impacts of horizontal drilling and hydraulic fracturing activities in the Marcellus Shale and other low-permeability gas reservoirs, an air quality modeling analysis was undertaken by DECs Division of Air Resources (DAR). The analysis identifies the emission sources involved in well drilling, completion and production, and the analysis of source operations for purposes of assessing compliance with applicable air quality standards.

Since September 2009 industry has provided information that: (1) simultaneous drilling and completion operations at a single pad would not occur; (2) the maximum number of wells to be drilled at a pad in a year would be four in a 12-month period; and (3) centralized flowback impoundments, which are large volume, lined ponds that function as fluid collection points for multiple wells, are not contemplated. Based on these operational restrictions, the Department revised the limited modeling of 24 hour2.777778e-4 days <br />0.00667 hours <br />3.968254e-5 weeks <br />9.132e-6 months <br /> PM2.5 impacts and conducted supplemental air quality modeling to assess standards compliance and air quality impacts. In addition, the Department conducted supplemental modeling to account for the promulgation of new 1 hour1.157407e-5 days <br />2.777778e-4 hours <br />1.653439e-6 weeks <br />3.805e-7 months <br /> SO2 and NO2 Revised Draft SGEIS 2011, Executive Summary, Page 15

National Ambient Air Quality Standards (NAAQS) after September 2009. The results of this supplemental modeling indicate the need for the imposition of certain control measures to achieve the NO2 and PM2.5 NAAQS. These measures, along with all other restrictions reflecting industrys proposed operational restrictions and recommended mitigation measures based on the modeling results, are detailed in Section 7.5.3 of the dSGEIS as proposed operation conditions to be included in well permits. The Department also developed an air monitoring program to fully address potential for adverse air quality impacts beyond those analyzed in the dSGEIS, which are either not fully known at this time or not verifiable by the assessments to date. The air monitoring plan would help determine and distinguish both the background and drilling related concentrations of pertinent pollutants in the ambient air.

Air quality impact mitigation measures are further discussed in Chapter 7 of the dSGEIS, including a detailed discussion of pollution control techniques, various operational scenarios and equipment that can be used to achieve regulatory compliance, and mitigation measures for well pad operations. In addition, measures to reduce benzene emissions from glycol dehydrators and formaldehyde emissions from off-site compressor stations are provided.

Greenhouse Gas Emission Impacts All operational phases of proposed well pad activities were considered, and resulting greenhouse gas (GHG) emissions determined in the dSGEIS. Emission estimates of carbon dioxide (CO2) and methane (CH4) are included as both short tons and as carbon dioxide equivalents (CO2e) expressed in short tons for expected exploration and development of the Marcellus Shale and other low-permeability gas reservoirs using high-volume hydraulic fracturing. The Department not only quantified potential GHG emissions from activities, but also identified and characterized major sources of CO2 and CH4 during anticipated operations so that key contributors of GHGs with the most significant Global Warming Potential (GWP) could be addressed and mitigated, with particular emphasis placed on mitigating CH4, with its greater GWP.

Revised Draft SGEIS 2011, Executive Summary, Page 16

Socioeconomic Impacts To assess the potential socioeconomic impacts of high-volume hydraulic fracturing, including the potential impacts on population, employment and housing, three representative regions were selected. The three regions were selected to evaluate how high-volume hydraulic fracturing might impact areas with different production potential, different land use patterns, and different levels of experience with natural gas well development. Region A consists of Broome, Chemung and Tioga County. Region B consists of Delaware, Otsego and Sullivan County, and Region C consists of Cattaraugus and Chautauqua County. Using a low and average rate of development based on industry estimates, high-volume hydraulic fracturing will have a significant positive economic effect where the activity takes place. At the maximum rate of well construction, total direct construction employment is predicted to range from 4,408 construction jobs under the low development scenario to 17,634 jobs under the average scenario. An additional 29,174 jobs are predicted to result indirectly from the introduction of high-volume hydraulic fracturing statewide.

There will also be positive impacts on income levels in the state as a result of high-volume hydraulic fracturing. When well construction reaches its maximum levels, total annual construction earnings are projected to range from $298.4 million under the low development scenario to nearly $1.2 billion under the average development scenario. Employee earnings from operational employment are expected to range from $121.2 million under the low development scenario to $484.8 million under the average development scenario in Year 30. Indirect employee earnings are anticipated to range from $202.3 million under the low development scenario to $809.2 million under the average development scenario in Year 30. The total direct and indirect impacts on employee earnings are projected to range from $621.9 million to $2.5 billion per year at peak production and construction levels in Year 30. Chapter 6 details how the potential job creation and employee earnings might be distributed across the three representative regions.

Chapter 6 also assesses the potential temporary and permanent population impacts on each of the three selected regions, finding that Region A will experience an estimated 1.4% increase in the Revised Draft SGEIS 2011, Executive Summary, Page 17

regions total population the first decade after high-volume hydraulic fracturing in introduced.

Region C is projected to be more modestly impacted by high-volume hydraulic fracturing.

While providing positive impacts in the areas of employment and income, high-volume hydraulic fracturing could cause adverse impacts on the availability of housing, especially temporary housing such as hotels and motels. In Region A, where the use of high-volume hydraulic fracturing is expected to be initially concentrated, there could be shortages of rental housing. High-volume hydraulic fracturing would also bring both positive and negative impacts on state and local government spending. Increased activity will result in large increases in local tax revenues and increases in the receipt of production royalties but would also result in an increased demand for local services, including emergency response services.

Visual, Noise and Community Character Impacts The construction of well pads and wells associated with high-volume hydraulic fracturing will result in temporary, but adverse impacts relating to noise. In certain areas the construction activity would also result in temporary visual impacts. Mitigation measures to address such impacts are summarized in Chapter 7.

The cumulative impact of well construction activity and related truck traffic would cause impacts on the character of the rural communities where much of this activity would take place. Methods to control simultaneous development within a specific area are discussed in Chapter 7.

Transportation Impacts The introduction of high-volume hydraulic fracturing has the potential to generate significant truck traffic during the construction and development phases of the well. These impacts would be temporary, but the cumulative impact of this truck traffic has the potential to result in significant adverse impacts on local roads and, to a lesser extent, state roads where truck traffic from this activity is concentrated. It is not feasible to conduct a detailed traffic assessment given that the precise location of well pads is unknown at this time. However, such traffic has the potential to damage roads. Chapter 7 discusses the potential mitigation measures to address such impacts, including the requirement that the applicant develop a Transportation Plan that sets Revised Draft SGEIS 2011, Executive Summary, Page 18

forth proposed truck routes, surveys road conditions along those routes and requires local road use agreements to address any impacts on local roads.

Additional NORM Concerns Based upon currently available information it is anticipated that flowback water would not contain levels of NORM of significance, whereas production brine could contain elevated NORM levels. Although the highest concentrations of NORM are in produced waters, it does not present a risk to workers because the external radiation levels are very low. However, the build-up of NORM in pipes and equipment (pipe scale and sludge) has the potential to cause a significant adverse impact because it could expose workers handling (cleaning or maintenance) the pipe to increased radiation levels. Also, wastes from the treatment of production waters may contain concentrated NORM and, if so, controls would be required to limit radiation exposure to workers handling this material as well as to ensure that this material is disposed of in accordance with applicable regulatory requirements.

Seismicity There is a reasonable base of knowledge and experience related to seismicity induced by hydraulic fracturing. Information reviewed indicates that there is essentially no increased risk to the public, infrastructure, or natural resources from induced seismicity related to hydraulic fracturing. The microseisms created by hydraulic fracturing are too small to be felt, or to cause damage at the ground surface or to nearby wells. Accordingly, no significant adverse impacts from induced seismicity are expected to result from high-volume hydraulic fracturing operations.

Chapter 7 - Mitigation Measures This Chapter describes the measures the Department has identified that, if implemented, would eliminate or mitigate potentially significant adverse impacts from high-volume hydraulic fracturing operations. A number of significant, new mitigation measures not contained in the 2009 dSGEIS have been identified as follows.

Revised Draft SGEIS 2011, Executive Summary, Page 19

No High-Volume Hydraulic Fracturing Operations in the New York City and Syracuse Watersheds In April 2010 the Department concluded that due to the unique issues presented by high-volume hydraulic fracturing operations within the drinking watersheds for the City of New York and Syracuse, the SGEIS would not apply to activities in those watersheds. Those areas present unique issues that primarily stem from the fact that they are unfiltered water supplies that depend on strict land use and development controls to ensure that water quality is protected.

The revised analysis of high-volume hydraulic fracturing operations in the revised dSGEIS concludes that the proposed high-volume hydraulic fracturing activity is not consistent with the preservation of these watersheds as an unfiltered drinking water supply. Even with all of the criteria and conditions identified in this dSGEIS, a risk remains that significant high-volume hydraulic fracturing activities in these areas could result in a degradation of drinking water supplies from accidents, surface spills, etc. Moreover, such large scale industrial activity in these areas, even without spills, could imperil EPAs Filtration Avoidance Determinations and result in the affected municipalities incurring substantial costs to filter their drinking water supply.

Accordingly, this dSGEIS supports a finding that site disturbance relating to high-volume hydraulic fracturing operations not be permitted in the Syracuse and New York City watersheds or in a protective 4,000 foot buffer area around those watersheds.

No High-Volume Hydraulic Fracturing Operations on Primary Aquifers Although not subject to Filtration Avoidance Determinations, 18 other aquifers in the State of New York have been identified by the New York State Department of Health as highly productive aquifers presently utilized as sources of water supply by major municipal water supply systems and are designated as primary aquifers. Because these aquifers are the primary source of drinking water for many public drinking water supplies, the Department recommends in this dSGEIS that site disturbance relating to high-volume hydraulic fracturing operations should not be permitted there either or in a protective 500-foot buffer area around them.

Horizontal extraction of gas resources underneath primary aquifers from well pads located outside this area would not significantly impact this valuable water resource.

Revised Draft SGEIS 2011, Executive Summary, Page 20

No High-Volume Hydraulic Fracturing Operations on Certain State Lands This dSGEIS supports a finding that site disturbance relating to high-volume hydraulic fracturing operations should not be permitted on certain State lands because it is inconsistent with the purposes for which those lands have been acquired. In addition, precluding site disturbance on certain State lands would partially mitigate the significant adverse impacts from habitat fragmentation on forest lands due to high-volume hydraulic fracturing activity. It would preclude the loss of such habitat in the protected State land areas which represent some of the largest contiguous forest patches where high-volume hydraulic fracturing activity could occur.

Horizontal extraction of gas resources underneath State lands from well pads located outside this area would not significantly impact this valuable habitat on forested State lands.

No High-Volume Hydraulic Fracturing Operations on Principal Aquifers Without Site-Specific Environmental Review Principal Aquifers are aquifers known to be highly productive or whose geology suggests abundant potential water supply, but which are not intensively used as sources of water supply by major municipal systems at the present time. In order to mitigate the risk of significant adverse impacts on these important water resources from the risk of surface discharges from high-volume hydraulic fracturing well pads, the dSGEIS proposes that for at least two years from issuance of the final SGEIS, applications for high-volume hydraulic fracturing operations at any surface location within the boundaries of principal aquifers, or outside but within 500 feet of the boundaries of principal aquifers, would require (1) site-specific SEQRA determinations of significance and (2) individual SPDES permits for storm water discharges. The dSGEIS proposes the Department re-evaluate the necessity of this restriction after two years of experience issuing permits in areas outside of the 500-foot boundary.

No High-Volume Hydraulic Fracturing Operations within 2,000 feet of Public Drinking Water Supplies The dSGEIS seeks to mitigate the risk of significant adverse impacts on water resources from the risk of surface discharges from high-volume hydraulic fracturing well pads by proposing that high-volume hydraulic fracturing operations at any surface location within 2,000 feet of public water supply wells, river or stream intakes and reservoirs should not be permitted. The dSGEIS Revised Draft SGEIS 2011, Executive Summary, Page 21

proposes that the Department re-evaluate the necessity of this approach after three years of experience issuing permits in areas outside of this setback.

No High-Volume Hydraulic Fracturing Operations in Floodplains or Within 500 Feet of Private Water Wells In order to address potential significant adverse impacts due to flooding, the dSGEIS supports a finding that the Department not issue permits for high-volume hydraulic fracturing operations at any well pad that is wholly or partially within a 100-year floodplain. In order to ensure that there are no impacts on drinking water supplies from high-volume hydraulic fracturing operations, the dSGEIS also supports a finding that no permits be issued for any well pad located within 500 feet of a private water well or domestic use spring, unless waived by the landowner.

Mandatory Disclosure of Hydraulic Fracturing Additives and Alternatives Analysis The dSGEIS identifies by chemical name and Chemical Abstract Services (CAS) number, 322 chemicals proposed for use for high-volume hydraulic fracturing in New York. Chemical usage was reviewed by NYSDOH, which provided health hazard information that is presented in the document. In response to public concerns relating to the use of hydraulic fracturing additives and their potential impact on water resources, this dSGEIS adds a new requirement that operators evaluate the use of alternative hydraulic fracturing additive products that pose less potential risk to water resources. In addition, in the EAF addendum a project sponsor must disclose all additive products it proposes to use, and provide Material Safety Data Sheets for those products, so that the appropriate remedial measures can be imposed if a spill occurs. The Department will publicly disclose the identities of hydraulic fracturing fluid additive products and their Material Safety Data Sheets, provided that information which meets the confidential business information exception to the Departments records access program will not be subject to public disclosure.

Enhanced Well Casing In order to mitigate the risk of significant adverse impacts to water resources from the migration of gas or pollutants in connection with high-volume hydraulic fracturing operations, the dSGEIS adds a requirement for a third cemented string of well casing around the gas production wells Revised Draft SGEIS 2011, Executive Summary, Page 22

in most situations. This enhanced casing specification is designed to specifically address concerns over migration of gas into aquifers.

Required Secondary Containment and Stormwater Controls In order to mitigate the risk of a significant adverse impact to water resources from spills of chemical additives, hydraulic fracturing fluid or liquid wastes associated with high-volume hydraulic fracturing, secondary containment, spill prevention and storm water pollution prevention are comprehensively addressed for all stages of well pad development. The dSGEIS supports the Departments proposal for a new stormwater general permit for gas drilling operations that would address potential stormwater impacts associated with high-volume hydraulic fracturing operations.

Conditions Related to Disposal of Wastewater and Solid Waste As provided in the 2009 dSGEIS, to ensure that wastewater from high-volume hydraulic fracturing operation is properly disposed, the Department proposes to require that before any permit is issued the operator have Department-approved plans in place for disposing of flowback water and production brine. In addition, the Department proposes to require a tracking system, similar to what is in place for medical waste, for all liquid and solid wastes generated in connection with high-volume hydraulic fracturing operations.

The dSGEIS also proposes to expand its proposed requirement for closed-loop drilling in order to ensure that no significant adverse impacts related to the disposal of pyrite-rich Marcellus Shale cuttings on-site.

Air Quality Control Measures and Mitigation for Greenhouse Gas Emissions The dSGEIS identifies additional mitigation measures designed to ensure that emissions associated with high-volume hydraulic fracturing operations do not result in the exceedance of any NAAQS. In addition, the Department has committed to implement local and regional level air quality monitoring at well pads and surrounding areas.

Revised Draft SGEIS 2011, Executive Summary, Page 23

The dSGEIS also identifies mitigation measures that can be required through permit conditions and possibly new regulations to ensure that high-volume hydraulic fracturing do not result in significant adverse impacts relating to climate change. The dSGEIS proposes to require a greenhouse gas emission impacts mitigation plan (the Plan). The Plan must include: a list of best management practices for GHG emission sources for implementation at the permitted well site; a leak detection and repair program; use of EPAs Natural Gas Star best management practices for any pertinent equipment; use of reduced emission completions that provide for the recovery of methane instead of flaring whenever a gas sales line and interconnecting gathering line are available; and a statement that the operator would provide the Department with a copy of the report filed with EPA to meet the GHG Reporting Rule.

Mitigation for Loss of Habitat and Impacts on Wildlife In order to further mitigate significant adverse impacts on wildlife habitat caused by fragmentation of forest and grasslands on private land, the Department proposes to require that surface disturbance in contiguous forest patches of 150 acres or more and contiguous grassland patches of 30 acres or more within specified Forest and Grassland Focus areas, respectively, be contingent upon site-specific ecological assessments conducted by the permit applicant and implementation of best management practices identified through such assessments.

Other Control Measures Other important existing and anticipated regulatory requirements and/or permit conditions that would be imposed to ensure that high-volume hydraulic fracturing operations do not cause significant impacts on the environment in New York include:

x Before a permit is issued, Department staff would review the proposed layout of the well site based on analysis of application materials and a site visit. Risky site plans would either not be approved or would be subject to enhanced site-specific construction requirements.

x The Departments staff reviews the proposed casing and cementing plan for each well prior to permit issuance. Permits are not issued for improperly designed wells, and in Revised Draft SGEIS 2011, Executive Summary, Page 24

the case of high-volume hydraulic fracturing, the as-built wellbore construction would be verified before the operation is allowed to proceed.

x The current dSGEIS proposes to require in most cases fully cemented intermediate casing, with the setting depths of both surface and intermediate casing determined by site-specific conditions.

x Fracturing equipment components would be pressure tested with fresh water, mud or brine prior to the introduction of chemical additives.

x The current dSGEIS requires pressure testing of blowout prevention equipment, the use of at least two mechanical barriers that can be tested, the use of specialized equipment designed for entering the wellbore when pressure is anticipated, and the on-site presence of a certified well control specialist.

x Flowback water stored on-site must use covered watertight tanks within secondary containment and the fluid contained in the tanks must be removed from the site within certain time periods.

x The Department has a robust permitting and approval process in place to address any proposals to discharge flowback water or production brine to wastewater treatment plants. The Department would require that before any permit is issued the operator have Department-approved plans in place for disposing of flowback water and production brine. Permission to treat such wastewater at a treatment plant in New York State would not be granted without a demonstrable showing that such wastewater can be properly treated at the plant. Additionally, the Department anticipates that operators would favor reusing flowback water for subsequent fracturing operations as they are now doing in Pennsylvania, so that disposal of flowback would be minimized.

x The Department would require that a Transportation Plan be developed and included with any permit application. That plan would include proposed truck routes and an assessment of road conditions along such routes. Any local road use agreement(s)

Revised Draft SGEIS 2011, Executive Summary, Page 25

would have to be disclosed and the applicant would have to demonstrate that the roads to be used are sufficient to accommodate the proposed truck traffic.

x The Department would consult with local governments and, where appropriate, place limits on the number of wells and/or well pads that can be constructed in a specific area at a single time in order to mitigate potential adverse impacts on community character, tourism and other potential socioeconomic impacts that could result from a concentration of well construction activity in a short period of time within a confined area.

x The Department would also impose measures designed to reduce adverse noise or visual impacts from well construction.

Chapter 8 - Permit Process and Regulatory Coordination This Chapter explains inter- and intra-agency coordination relative to the well permit process, including the role of local governments and a revised approach to local government notification and consideration of potential impacts of high-volume hydraulic fracturing operations on local land use laws and policies. Unlike the 2009 dSGEIS, the current draft Supplement supports a condition that local governments be given notice in writing of all high-volume hydraulic fracturing applications in the locality. A continuously updated database of local government officials and an electronic notification system would be developed for this purpose.

In addition, the EAF Addendum would require the project sponsor to identify whether the proposed location of the well pad, or any other activity under the jurisdiction of the Department, conflicts with local land use laws or regulations, plans or policies. The project sponsor would also be required to identify whether the well pad is located in an area where the affected community has adopted a comprehensive plan or other local land use plan and whether the proposed action is inconsistent with such plan(s). Where the project sponsor indicates that the location of the well pad, or any other activity under the jurisdiction of the Department, is either consistent with local land use laws, regulations, plans or policies, or is not covered by such local land use laws, regulations, plans or policies, no further review of local land use laws and policies would be required.

Revised Draft SGEIS 2011, Executive Summary, Page 26

In cases where a project sponsor indicates that all or part of their proposed application is inconsistent with local land use laws, regulations, plans or policies, or where the potentially impacted local government advises the Department that it believes the application is inconsistent with such laws, regulations, plans or policies, the Department intends to request additional information in the permit application process to determine whether this inconsistency raises significant adverse environmental impacts that have not been addressed in the SGEIS.

Chapter 9 - Alternative Actions Chapter 9 discusses the alternatives to well permit issuance that were reviewed and considered by the Department. Chapter 21 of the 1992 GEIS and the 1992 Findings Statement discussed a range of alternatives concerning oil and gas resource development in New York State that included both its prohibition and the removal of oil and gas industry regulation. Regulation as described by the GEIS was found to be the best alternative.

The dSGEIS considers a range of alternatives to the proposed approach for regulating and authorizing high-volume hydraulic fracturing operations in New York. As required by SEQRA, the dSGEIS considers the no action alternative. The Department finds that the no action alternative would not result in any of the significant adverse impacts identified herein, but would also not result in the significant economic and other benefits identified with natural gas drilling by this method. The Department believes that this alternative is not preferable because significant adverse impacts from high-volume hydraulic fracturing operations can be fully or partially mitigated.

The alternatives analysis also considers the use of a phased-permitting approach to developing the Marcellus Shale and other low permeability gas reservoirs, including consideration of limiting and/or restricting resource development in designated areas. As discussed above, the Department proposes to partially adopt this alternative by restricting resource development in the New York City and Syracuse watersheds (plus buffer), public water supplies, primary aquifers and certain state lands. In addition, restrictions and setbacks relating to development in other areas near public water supplies, principal aquifers and other resources as outlined above are recommended. The Department does not believe that resource development should be further Revised Draft SGEIS 2011, Executive Summary, Page 27

limited by imposing an annual limit on permits issued for high-volume hydraulic fracturing operations. The Department believes any such annual limit would be arbitrary. Rather, the Department proposes to limit permit issuance to match the Department resources that are made available to review and approve permit applications, and to adequately inspect well pads and enforce permit conditions and regulations. Although it is not possible to predict the number of permit applications that will be submitted in any given area, and therefore proscribe the level of activity that any one operator may undertake in those areas, the Department has the ability to respond and adjust to conditions in the field. If it is demonstrated, for example, that the measures in place to mitigate noise impacts do not adequately address the impact of high-volume hydraulic fracturing on a host community, the department retains the option through the permitting process to impose additional conditions on operations, such as phasing of drilling operations on adjacent well pads, to prevent or mitigate cumulative or simultaneous operations from impacting nearby residents.

The dSGEIS also contains a review and analysis of the development and use of green or non-chemical fracturing alternatives. The Department finds that the use of environmentally-friendly or green chemicals would proceed based on the characteristics of the Marcellus Shale play and other shale plays across the United States, as well as the potential environmental impacts of the development. While more research and approval criteria would be necessary to establish benchmarks for green chemicals, this dSGEIS adopts this alternative approach where feasible by requiring applicants to review and consider the use of alternative additive products that may pose less risk to the environment, including water resources, and to publicly disclose the chemicals that make up these additives. These requirements may be altered and/or expanded as the use of green chemicals begin to provide reasonable alternatives and the appropriate technology, criteria and processes are in place to evaluate and produce green chemicals.

Chapter 10 - Review of Selected Non-Routine Incidents in Pennsylvania Chapter 10 discusses a number of widely publicized incidents involving high-volume hydraulic fracturing operations in Pennsylvania that have caused public concern about the safety and potential adverse impacts associated with high-volume hydraulic fracturing operations. The case Revised Draft SGEIS 2011, Executive Summary, Page 28

studies describe the events and their likely causes, and explains how protective measures currently in place or identified as proposed mitigation measures in this dSGEIS would further minimize the risk of such events occurring should high-volume hydraulic fracturing operations be permitted in New York.

Chapter 11 - Summary of Potential Impacts and Mitigation Measures Chapter 11 highlights the mitigation measures implemented through the 1992 GEIS and summarizes the impacts and mitigation that are discussed in Chapters 6 and 7.

Next Steps Following the public comment period for the revised draft SGEIS and the draft regulations, the Department will produce a final SGEIS. The final SGEIS will include summaries of the substantive comments received on both the 2009 draft SGEIS and the revised dSGEIS, along with the Departments responses to such comments. The final SGEIS will also incorporate by reference all volumes of the 1992 GEIS.

Revised Draft SGEIS 2011, Executive Summary, Page 29