Less than two weeks after the New York State Assembly joined the state Senate in passing a moratorium on the controversial natural gas extraction process known as hydraulic fracturing, or "fracking," New York Governor David Paterson today vetoed legislation that would have put a temporary hold on any new permits employing fracking until mid-May 2011. The Senate had passed a similar bill in August.

Along with the veto, however, Governor Paterson issued a moratorium via executive order on fracking in horizontal wells until July 2011, allowing fracking of vertical wells to continue. Fracking of horizontal wells is the more common process of the two.

“This legislation, which was well intentioned, would have a serious impact on our state if signed into law,” Mr. Paterson said in a statement. “Enacting this legislation would put people out of work – work that is permitted by the Department of Environmental Conservation and causes no demonstrated environmental harm, in order to effectuate a moratorium that is principally symbolic.”

"I cannot agree to put individuals out of work for a symbolic act," Paterson said.

In what could be argued is an example of the classic "race to the bottom" scenario of environmental policy in a federal system, the Governor's office explained that competition for economic development played a part in Saturday's decision. "With a $315 million budget gap in the current fiscal year, and a projected gap of over $9 billion in the 2011-12 State fiscal year," the Governor's office writes, "New York simply cannot afford to send hundreds and perhaps thousands of jobs, and millions of dollars in capital investment to Pennsylvania and other states to our south."

Environmental groups welcomed the moratorium but some say it doesn't go far enough. "[T]he Executive Order is not as strong as legislation passed overwhelmingly by both houses of the state Legislature, because it does not apply to the fracking of vertical wells in shale formations, including the Marcellus and Utica Shales," Kate Sinding of the Natural Resources Defense Council writes.

NRDC's Sinding points out that the moratorium only helps so much because the oil and gas industry could "circumvent the ongoing environmental review process" by drilling vertical wells with the intention of converting them to horizontal wells in the future. And because vertical wells are not as productive as horizontal ones, the industry would have to drill many more wells to produce anywhere near the same amount of hydrocarbons. Therein lies the real problem. New York State law says only one horizontal well can be drilled per square mile, but allows sixteen vertical wells to be drilled in the same area.

If New York regulators do eventually allow vertical wells to be converted into horizontal wells and the oil and gas industry acts on its threat to step-up the drilling of vertical wells, is it possible that today's moratorium—by creating more surface and environmental disturbance—could have the exact opposite of its intended purpose than if no moratorium was enacted at all?

Photo: Tim Hurst