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"#$%#&$' To: Governor Andrew Cuomo From: 56321342, Policy Analyst at the University of Michigan Date: 10/20/2013 Re: New York's Fracking Moratorium

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The Fracking Moratorium Decision New York State currently sits on about 100 trillion cubic feet of natural gas reserves from the Marcellus and Utica shale formations that are untouched due to the moratorium you set on hydraulic fracturing in 2008 (David). "Fracking," the process of extracting gas trapped under rock by injecting sand, water, and chemicals into the earth, could provide the U.S. with a 600,000 job increase in the oil and gas sector according to President Obama, but is also highly controversial. In August 2013, New York State saw an unemployment rate of 7.6%, .3% higher than the national average (Snyder, Cuomo). This state needs job creation, and the way to achieve this is partly through encouraging fracking. Due to the negative public opinion on the practice, however, this administration needs to be pragmatic in how it addresses this issue through strict regulations and an excise tax. A Brief History According to the Environmental Defense Fund, hydraulic fracturing has quickly become the number one process involved in onshore oil and gas extraction (Environmental Defense Fund). There are very differing, strong opinions on this process in the United States. The gas industry views fracking as an invaluable innovation: it provides a method for the US to become energy independent and boost the economy. Anti-fracking groups, however, deplore fracking. They believe that it contaminates air and drinking water and is hazardous to the population (Foran).

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Additionally, they argue that the influx of nationally produced natural gas will keep this country hooked on fossil fuels and will cause policymakers to ignore prioritizing research on alternatives to fossil fuels (Nocera). In fact, according to a Siena College poll, opposition to hydraulic fracturing by New Yorkers has grown from 42 percent to 45 percent in the last month alone (Huffington Post). That being said, a study by the University of Texas - Austin was released this month. This study showed that methane leaks from fracking don't cause as many leaks as the Environmental Protection Agency had previously found (Post Editorial Board). Additionally, fracking supports more than 2 million jobs across America, and has led to $75 billion in new revenues for state and federal governments. (Post Editorial Board) Options 1.) Continue the Moratorium: You could simply continue the moratorium and require gas companies to find other sites outside of the state to conduct hydraulic fracturing. 2.) Remove the Moratorium: One option you could take would be to cease the moratorium and allow gas companies to use hydraulic fracturing to tap into the Marcellus and Utica shale formations. 3.) Impose a Tax: Ending the moratorium on fracking and instituting an extraction tax that will charge companies for fracking will bring in money for the state government as well as bring jobs to New York State. 4.) Utilize Stronger Regulations: Stricter regulations could take many forms, including improved treatment, storage, and disposal of fracking wastewaters, as well as mandated transparency for fracking companies. Recommendations

!"#$%#&$' If you choose to keep the moratorium on fracking, this will certainly appease voters. The

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environmentalist voting block that cares deeply about this issue will certainly support you in this decision as well as 45% of voters who are opposed to hydraulic fracturing, as described earlier. The state will be missing out on an opportunity for job growth and revenue source, however, and natural resources that the state has to offer will be left untapped. The question here isn't whether or not we should lift the moratorium. Removing the government barriers to fracking is necessary if we want to compete with other states who are willing to do the same. The benefits of fracking on the employment in our state and the financial resources we will have at our disposal outweigh the negative consequences of fracking if we go about drafting and implementing our fracking policy in the right way. Simply removing the moratorium and not developing a policy to reduce externalities would please the gas companies, as they would be able to tap into the vast reserves of natural gas that New York has to offer. Unfortunately, it would reflect poorly on your administration. In the case of Pennsylvania, 60 percent of the state believed that Governor Corbett's decision on fracking was influenced too much by gas companies (Rabe). It would be wise for the administration to avoid this snafu. Steven Chu, former Obama Energy Secretary and Nobel laureate, claims that when it comes to fracking, "You can have your cake and eat it too. You can develop it in a safe way," (Post Editorial Board). I urge you to remove the moratorium on fracking and develop a policy that will minimize public health hazards while maximizing the economic benefit to the state. First, require fracking companies to be transparent. This has been popular among voters in Pennsylvania thus far, with a CLOSUP poll reporting that 84 percent of Pennsylvania voters strongly agreeing that natural gas drilling companies should have to disclose the chemicals they

!"#$%#&$' inject underground in the drilling process because of the public's right to know this information (Rabe). This will reflect well on your administration and help alleviate the public dissention on the topic of fracking because they will have ready access to potential abuses made by gas companies and can mobilize their environmental organizations if they notice abuses. Next, an extraction tax should be imposed on the companies. This will produce money

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for New York State that can then be used to research and develop more sustainable technologies. The SUNY College of Nanoscale Science and Engineering (CNSE) you budgeted for allows researchers at the school to provide a standard for scientific-based research institutions across the country that are working to build a sustainable economy (Cohen). Taxing the gas companies and funneling those funds back into programs like these that your administration has been so supportive of could expand their research, development, prototyping and outreach to corporate partners that CNSE and similar institutions are undertaking. Taxing gas production in the Marcellus shale fields is expected to bring in more than $1 billion annually for the state of Pennsylvania, and New York State could reap these benefits as well by enacting a similar policy (Wood). Providing funding for environmental research will placate a proportion of the voting block that is opposed to hydraulic fracturing. Lastly, strict regulations on hydraulic fracturing must be imposed in order to avoid longterm negative effects from this process. Regulations that promote proper storage, transportation, and disposal of this material New York State can avoid contaminating land and water. Before the moratorium is lifted, the state must develop water quality criteria that accounts for the pollutants produced by shale gas in order to protect water that citizens consume, bathe in, cook with, and swim in. Additionally, the state must outlaw impoundments. These shale gas wastewater reserves have been shown to kill farm animals when their lining fails and large, open shale gas

!"#$%#&$' wastewater poses an environmental hazard that we will have to deal with for years to come (Ramanujan). The state needs to develop limits on the release of these toxins and properly equip the waste treatment facilities that will be accepting this water to properly take care of the wastewater. The fact that shale gas wastewater is not classified as hazardous waste and does not get treated as such causes spills and leaks during transportation that compromise the integrity of the environment. In order to combat this, New York State must label shale gas wastewater as hazardous and ensure that companies that use hydraulic fracking follow all of the rules and regulations for how to properly dispose of this material. By labeling shale gas wastewater as "hazardous waste" and treating it as such, limits on the discharge of shale gas wastewaters and

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updated pollution control at centralized waste treatment facilities accepting shale gas wastewater will limit the impact of shale gas wastewater on New York State's lakes and rivers (Hammer). Governor, I urge you to remove the moratorium on fracking and advocate for legislation that requires strong standards for gas companies and taxes them for gas extraction. This will allow New York State to utilize its natural resources while maintaining the integrity of its lakes and rivers. Opponents of fracking will appreciate the regulations, even if it isn't necessarily their favorite option. As Carol Browner, former head of the Environmental Protection Agency under Bill Clinton, put it, What regulation does is it gets the public some sense that things are being managed. Something will be better than nothing, (Reid).

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Works Cited Cohen, Steven. "Sustainable Consumption and the Technology of Sustainability." Huffington Post 19 Aug. 2013 [New York City] . Web. 20 Oct. 2013. <http://www.huffingtonpost.com/stevencohen/sustainable-consumption-a_b_3779108.html>. Cuomo, Andrew M., and Peter M. Rivera. "States Private Sector Job Count Grows by 22,700 in August 2013 to Historic Record High." New York State Department of Labor. Accessed October 9, 2013. <http://labor.ny.gov/stats/pressreleases/pruistat.shtm>. David, Javier E. "Is NY fracking a good idea? Look at Pennsylvania." CNBC, October 6, 2013. <http://www.cnbc.com/id/101081814>. Environmental Defense Fund. "What is "fracking?"." Accessed October 9, 2013. <http://www.edf.org/climate/what-is-fracking>. Foran, Clare. "Some Foes of Fracking Reach Out to Drillers on Safety." National Journal Daily, October 9, 2013. <http://www.nationaljournal.com/daily/some-foes-of-fracking-reach-out-todrillers-on-safety-20131008?mrefid=HomepageRiver>. "Gas Drilling Poll: Fracking Opposition Among New York Voters At An All-Time High." Huffington Post, September 30, 2013. <http://www.huffingtonpost.com/2013/10/01/gas-drilling-pollfracking-new-york_n_4017035.html?utm_hp_ref=green>. Hammer, Rebecca, and Jeanne VanBriesen. "In Fracking's Wake: New Rules are Needed to Protect Our Health and Environment from Contaminated Wastewater." Natural Resources Defense Council. <http://www.nrdc.org/energy/files/fracking-wastewater-fullreport.pdf>. Nocera, Joe. "A Fracking Rorschach Test." The New York Times, October 4, 2013. <http://www.nytimes.com/2013/10/05/opinion/a-fracking-rorschach-test.html?_r=0>. Post Editorial Board, . "Methane emissions at fracking wells controllable, study says." New York Post, September 28, 2013. <http://nypost.com/2013/09/28/methane-emissions-at-fracking-wellscontrollable-study-says>. Rabe, Barry G., and Christopher Borick. "Fracking for Natural Gas: Public Opinion on State Policy Options." The Center for Local, State, and Urban Policy. Accessed October 9, 2013. <http://issuu.com/closup/docs/pr-16-fracking-survey#embed>. Ramanujan, Krishna. "Fracking May Be Killing Farm Animals." Western Farm Press (2012). Web. 20 Oct. 2013. <http://search.proquest.com.proxy.lib.umich.edu/docview/926789038/fulltext?accountid=14667 >.

!"#$%#&$' Snyder, Jim, and Katarzyna Klimasinska. "Obama Pushes Natural-Gas Fracking to Create 600,000 U.S. Jobs." Bloomberg 25 Jan. 2012 [New York City] . Web. 20 Oct. 2012. <http://www.bloomberg.com/news/2012-01-25/obama-backs-fracking-to-create-600-000-jobsvows-safe-drilling.html>. Wilson, Reid. "Slowly, Democrats embrace fracking." The Washington Post 25 Sept. 2013. Web. 20 Oct. 2013. <http://www.washingtonpost.com/blogs/govbeat/wp/2013/09/25/slowly-democratsembrace-fracking/>. Wood, Michael. "Marcellus Shale Tax Policy." A Look at Other States Shows Marcellus Impact Fee Shortchanges Pennsylvanians. Ed. Christopher Lilienthal. Pennsylvania Budget and Policy Center, 8 Aug. 2013. Web. 20 Oct. 2013. <https://pennbpc.org/sites/pennbpc.org/files/PAImpact-Fee-Compared-to-TX-WV-8-8-2013-final.pdf>. '

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