ALBANY, N.Y. — Environmental groups and energy companies both claimed victory after Gov. David Paterson ordered a seven-month moratorium on some natural gas drilling in the state, although environmentalists would have preferred the broader ban that the Legislature had approved.
The outgoing Democratic governor vetoed a bill on Saturday that would have suspended all new natural-gas drilling permits until May 15. Instead, he issued an executive order prohibiting high-volume hydraulic fracturing of horizontally drilled wells, such as those in the Marcellus Shale region of southern New York. The order stands until July 1.
High-volume hydraulic fracturing, also known as fracking, involves blasting millions of gallons of chemical-laced water thousands of feet underground to crack shale and release natural gas trapped inside it. The Environmental Protection Agency is examining the process to see if it imperils drinking water supplies, as opponents claim.
Permitting of gas wells in New York's part of the Marcellus region, which also underlies parts of Pennsylvania, Ohio, and West Virginia, has already been on hold for two years while the state Department of Environmental Conservation reviews its potential effects on the environment.
In vetoing the Legislature's oil and gas-drilling moratorium, Paterson said it would have applied to all conventional, low-volume, vertically drilled wells, effectively shutting down an industry that has been operating safely for decades.
Low-volume hydraulic fracturing of conventional, vertical wells uses several thousand gallons of water per well, versus up to 8 million gallons per horizontal well with high-volume fracturing.
Paterson's budget office estimated that such a broad ban would cost thousands of industry jobs, stop landowner payments and significantly reduce state and local revenues from permit fees and taxes.
The Independent Oil and Gas Association of New York said the Legislature's moratorium would have threatened the viability of more than 300 producing companies and the jobs of their 5,000 employees.
The state Farm Bureau also lobbied for Paterson's veto, saying its members have benefited from vertical gas drilling for many years and invested the royalty payments into their farms.
The oil and gas association said the Legislature's bill would have cut in half the number of months drilling could take place next year, resulting in a net loss of nearly $800,000 in real property taxes and $1.4 million in royalty payments.
"The moratorium bill would have forced me to evaluate my company's future in New York," said John Holko, president of Lenape Resources, a gas-drilling company in Genesee County.
A coalition of about a dozen environmental groups released a statement praising Paterson's moratorium while warning that it creates a "loophole" that industry can exploit. That is, it doesn't apply to vertical wells, "exactly the kind of wells that were responsible for ruining nine square miles of aquifer and poisoning the drinking water of more than a dozen families in Dimock, Pa.," the groups said.
In Dimock, homeowners sued last year after Houston-based Cabot Oil & Gas Corp. drilled faulty wells that allowed methane and, possibly, toxic drilling chemicals to escape into their drinking water aquifer.
The environmental groups, which include Environmental Advocates, Earthjustice, the Natural Resources Defense Council, Sierra Club and others, said they would call on Gov.-elect Andrew Cuomo to "fix the loophole."