Probably for Valentine’s Day, when the DEC has a deadline to shovel the dSGEIS out the door. And after over 200,000 comments have been delivered to the DEC’s bunker. The DEC has known for some time that they were going to be sued over their comic opera mishandling of the fracking regulations. And now, Team Slottje have laid out the why and how of such an action. As Paul Gallay of Riverkeeper, a former DEC employee, neatly summarized at the Assembly hearing, the DEC’s mismanagement of the proposed fracking regulations has been the worst procedural mess in the agency’s history. So they set themselves up – to get sued. Accordingly, Team Slottje has sent the DEC a demand letter, which went out as soon as the 200,000 + comments on the proposed fracking regulations were delivered. Now largely a matter of determining where Doc Martens and his defense lawyers are hiding out.
The DEC’s Jekyl & Hyde approach to fracking regulations is fundamentally flawed because the DEC is a house divided – part environmental agency – as evidenced in the environmental regulatory overlay, the dSGEIS (which we do not have as a reference) and part minerals management agency, the Division of Mineral Resources, whose lack of concern for landowners, the general public or the environment is evidenced by the proposed drilling regulations – which, absent enforcement funding from a state gas production tax or any autonomous environmental regulatory oversight, are the worst in North America.
The DEC effectively abandoned regulatory procedures in an effort to push the stillborn drilling regulations out the door. In so doing, it has made several fundamental errors, as Team Slottje detail in the attached demand letter to the DEC, and I summarize below.
1. The DEC failed to hold the required public hearing on the proposed drilling regulations within 30 days – meaning by January 11th. (The January 10th hearing was the Assembly committee’s hearing, not the DEC’s, and the DEC failed to send a representative.)
A. The HVHF Rule Making Notice was issued in violation of ECL § 03-0301(2)(a) which requires that the DEC Commissioner hold a “public hearing relating to the subject of such [environmental standards, criterion, rule or regulation or change thereto]…. not less than 30 days after date of notice thereof, any provision of law to the contrary notwithstanding.”
The DEC was legally obligated to provide for a public hearing within thirty days of December 12, 2012, the publication date of the Notice. Instead, the DEC chose to disregard the law, stating in the HVHF Rule Making Notice that “NO HEARING(S) SCHEDULED.”
The DEC does not have the option of deciding which provisions of law to follow, and which to
disregard. By failing to hold a hearing, it failed to comply with state law. The DEC even failed to send a representative to the Assembly committee hearing on the proposed regulations.
2. The DEC failed to cite any studies, science or studies as the basis of its proposed regulations as required by law. The obvious explanation is that there is no rational basis for the proposed regulations – the DEC simply made them up with the gas lobby
Issuance of the HVHF Rule Making Notice and its associated Revised Regulatory Impact Statement
– High Volume Hydraulic Fracturing – 6 NYCRR Parts 52, 190, 550-556, 560 and 750 (the “Revised
Regulatory Impact Statement” or the “RRIS”) are invalid by virtue of failing to comply with SAPA §
202-a(3)(b) requirements for a valid regulatory impact statement.
In clear derogation of SAPA legal requirements, the discussion of “needs and benefits” contained in
the RRIS does not contain so much as a single “citation for and summary […] of each scientific or
statistical study, report or analysis that served as the basis for the rule, [or] an explanation of how
it was used to determined the necessity for and benefits derived from the rule … [or] the name of
the person that produced each study, report or analysis.”
As a matter of law it is arbitrary and capricious for the DEC to engage in rule making procedure without regard to the facts or a sound basis in reason.
3. The DEC failed to respond to requests for any science, studies or basis for the proposed regulations. Probably because the proposed regulations are not based on science.
SAPA § 104(a) requires that “An agency, upon request, shall, within thirty days, make available for
inspection and copying any scientific or statistical study, report or analysis, including any such
study, report or analysis prepared by a person or entity pursuant to a contract with the agency or
funded in whole or in part through a grant from the agency that is used as the basis of a proposed
rule and any supporting data;[…].”
Upon information and belief, the DEC has refused timely to comply with SAPA § 104(a) by denying to fulfill FOIL requests for reports or analysis (including requests for reports relating to the health impact assessment) and refusal to make public the data, reports or information upon which the HVHF Proposed Rules are based.
4. The DEC failed to include local government agencies in the rule-making process in any way, at any time – as required by law.
SAPA § 202-b provides that “when any rule is proposed for which a regulatory flexibility analysis
is required, the agency shall assure that small businesses and local governments have been given an opportunity to participate in the rule making….”
Local government officials, including the New York Association of Towns, testified at the Assembly hearing that they had been excluded from the rule-making process by the DEC.
The DEC scheduled its thirty day comment period between December 12, 2012 and January 11,
2013, a time when local governments are consumed with year-end budgetary matters and
organizational meetings. Most local governments will not have had time to consider and act in
their official municipal capacity, given the winter holiday season and the need to concentrate on
legally mandated year-end budgetary matters and organizational meetings.
In derogation of the spirit of the requirements of SAPA § 202-b(6), the DEC has scheduled the
comment period at a time that was virtually guaranteed to deprive local governments of a
meaningful opportunity to schedule board and other public meetings to prepare comments and
participate in this revised rule making process.
4. The DEC failed to show a complete economic impact statement – including negative impacts of the proposed regulations, in violation of the law. The paper that was hastily attached to the draft SGEIS is not a lawful economic impact statement.
SAPA § 201-a(2)(a) mandates that the DEC include in the Revised Job Impact Statement a
summary of the information and methodology underlying its determination of a positive impact
on jobs and employment opportunities resulting from the proposed rules. The DEC has elected to
bypass this requirement, instead substituting industry estimates utilized in a draft environmental
The Revised Job Impact Statement states: “Section 6.8 of the 2011 rdSGEIS provides a detailed
discussion of the potential economic, population and income impacts that may accrue if the use of
HVHF is approved. Based on industry estimates of potential drilling activity, and after applying
certain assumptions about the amount of activity that could proceed under the 2011 rdSGEIS, the
Department estimates that approval of HVHF could bring as many as 6,198 jobs assuming a low
rate of development.” (emphasis added.)
The “2011 rdSGEIS” is only a draft document, is presumably in the process of being revised to
reflect public comment, and has not been adopted or approved by the DEC. The DEC is acting in
violation of SAPA § 201-1(2)(a), by substituting for purposes of the Revised Job Impact Statement
industry-supplied jobs information parroted from a draft environmental impact statement .
5. The proposed regulations fail to cite any alternatives that might reduce negative impacts. Indeed, few land uses and no surface rights are protected by the regulations.
In contravention of SAPA § 202-a(1), the RRIS contains no evidence that the DEC considered the
utilization of “approaches which are designed to avoid undue deleterious economic effects or
overly burdensome impacts of the rule upon persons, including persons residing in New York
state’s rural areas directly or indirectly affected by [the rules]…”
The public has submitted numerous studies, surveys, reports, and information making the case
that there are material deleterious economic effects and/or overly burdensome impacts on
persons in rural areas that are directly or indirectly affected by the rules to the extent that the
rules contemplate high volume hydraulic fracturing (“HVHF”) wells be located in New York state’s
6. The DEC fails to provide a best estimate of the cost impacts on government. Indeed absent a state gas production tax, the regulations are an unfunded mandate on local government, leaving state agencies, particularly the DOT and local road authorities to fend for themselves.
In derogation of the requirements of SAPA: the RRIS does not contain “a statement detailing the
projected costs of the rule” which shall indicate the “costs for the implementation of, and
continued administration of the rule to the agency and to the state and its local governments”; nor
does the RRIS contain a statement of the best estimate of such costs [permissible under SAPA §
202-a (c)(iv) where an agency finds that it “cannot fully provide a statement of such costs, a
statement setting forth [the agency’s] best estimate], which shall indicate the information and
methodology upon which such best estimate is based and the reasons why a complete cost
statement cannot be provided.”
7. The DEC grossly mistates the impact on local government and has pointedly ignored local government officials. There are no protections in the proposed regulations for any small business, since there are no protections for any land use from the hazards of shale gas infrastructure – pits, pumps, processing plants or compressors.
SAPA § 202-b(1) requires the DEC to “consider utilizing approaches that will accomplish the
objectives of applicable statutes while minimizing any adverse economic impact of the rule on
small business and local governments. Consistent with the objectives of applicable statutes, the
agency shall consider such approaches as: (a) the establishment of … timetables that take into
account the resources available to small businesses and local governments….”
Once again, the DEC has acted in disregard of the law. In the HVHF Rule Making Notice, the DEC
asserts that “Local governments are not required to take any affirmative action under the
proposed revised rules.” But the assertion that local governments are not required to take
affirmative action is not responsive to the issue of whether an alternative approach could
minimize adverse economic impacts of the rule on local governments.
8. The DEC grossly understates the regional impact on rural areas, by simply ignoring them.
In clear violation of SAPA § 202-bb, the DEC has failed to “consider utilizing approaches that will
accomplish the objectives of applicable statutes while minimizing any adverse economic impact of
the rule on public and private sector interests in rural areas. Consistent with the objectives of
applicable statutes, the agency shall consider such approaches as: (a) the establishment of
timetables that take into account the resources available to rural areas ….”
In the HVHF Rule Making Notice, the DEC asserts that: “These proposed revised requirements
are applicable to HVHF activities statewide, and would not result in any disproportionate
impact on the regulated community in rural areas.” (emphasis added.)
This assertion is arbitrary and capricious, and is erroneous as a matter of law and of fact.
By asserting that because the rules have statewide impact and so (according to the DEC) there is in
effect no local impact, the DEC violates SAPA § 202-bb by refusing to take into account the myriad
disproportionate impacts on the public and private sector interests.
Without question, public and private sector interests in rural areas will be disproportionately
impacted – HVHF well drilling is expected to be highly concentrated in rural upstate New York,
and not on Long Island, New York City, Westchester County, Albany, or the vast majority of large
cities. Drilling is expected to be concentrated in rural areas, and not in densely populated areas
where there may not be sufficient open space to locate sizable well pads.
9. The DEC fails to state what forms will be used and what procedures are to be followed
The DEC’s response is that “The form would be a new form for the Department; it is not yet
publicly available. Instructions included on the form will provide the necessary guidance to the
regulated community….” As contemplated by the law, the public has an interest in knowing what
forms and paperwork will be required by the proposed regulations BEFORE the regulations are
adopted. If the DEC has not yet determined the proper form and content of a required form, sound
standards (as required by SAPA) mandate that the rule making process be withdrawn and
commenced only when the DEC is prepared to comply with the statutory requirements of
10. Proposed regulations fail to list direct impact on local services, by acting as if there aren’t any by willfully ignoring input from local officials.
SAPA § 202-a(3)(e) requires the RRIS to contain “a statement describing any program, service,
duty or responsibility imposed by the rule upon any county, city, town, village, school district, fire district or other special district.”
The RRIS states that the proposal “will not directly impose any significant service, duty or
responsibility” on local governments. (emphasis added.)
There is no legal authority under SAPA allowing the DEC to limit its regulatory impact statement
to services, duties, or responsibilities that the DEC determines (without explanation or backup)
that are not “direct.” The HVHF Rule Making Notice is in violation of SAPA §202-a(3)(e) because
the RRIS fails to state that the proposed rules do not impose any service, duty or responsibility on
11. DEC fails to state any alternatives
Furthermore, there are other alternatives than no regulations, no permits, or the proposed
regulations. The RRIS does not contain, for example, alternatives to the 500 foot setback from a
residential well or 500 feet from an inhabited dwelling. Alternatives could include greater or
lesser distances, when these distances are an increase from the setbacks in the original rule but
are less than setbacks requested in the comments to the regulations.
The RRIS further fails to comply with SAPA §202-a(3)(g) because the RRIS contains no
explanation, statement, scientific basis or any discussion whatsoever of how the DEC selected the
setbacks and other specific requirements contained in the proposed regulations, or cite any alternatives.
12. Fails to state specific reasons for changes, such as eliminating the 2 foot freeboard requirement on open pits, or arbitrarily changing its charter from “regulate oil and gas” to “promote oil and gas”
Issuance of the HVHF Rule Making Notice is invalid by virtue of the fact that the Assessment of
Public Comment consistently omits “a statement of the reasons why any significant changes were not incorporated into the rule,” in violation of SAPA § 202(4-a)(b).
By way of example, Comment 7806 to Part 553.2 suggests increased setbacks from streams,
bodies of water, and private water wells to 3,000 feet. The DEC Response states: “Part 560
proposed additional setbacks for wells completed by high-volume hydraulic fracturing.” The
Response contains absolutely no explanation for why the DEC rejected the comment.
13. The DEC’s changes are neither clear, coherent nor explained
SAPA § 201requires that the DEC “strive to ensure that, to the maximum extent possible, its rules,
regulations and related document are written in a clear and coherent manner…”
The RRIS section entitled “Revised rule compared with proposed rule” states (in its entirety):
“Substantial revisions were made in sections 550.3, 553.1, 554.1, 554.7, 556.2(g), 560.2,
560.3, 560(3)(b), (d)(1), 560.4(a)(2), (c), 560.5(b), (d), (f), (h), 560.6(c)(3), (11),
560.7(j), 750-3, 750-3.3(a)(5), (6), 750-3.7(o) and 750-3.11(d).”
The RRIS violates SAPA § 201 because the RRIS does not explain what the proposed rules
originally said, what changes were made, or why the changes are proposed; as a result, the
HVHF Rule Making Notice fails to comply with the SAPA requirement that agency statements be
“clear and coherent.”
This is what comes of trying to turn the Empire State into a fracking banana republic. This is the price of political expediency and bureaucratic intransigence.