May 19, 2009, Press Release: DRBC ELIMINATES REVIEW THRESHOLDS FOR GAS EXTRACTION PROJECTS IN SHALE FORMATIONS

NEWS RELEASE

DELAWARE RIVER BASIN COMMISSION
P.O. Box 7360, 25 State Police Drive
West Trenton, NJ 08628

FOR IMMEDIATE RELEASE
CONTACT: Clarke Rupert, (609) 883-9500 x260

DRBC ELIMINATES REVIEW THRESHOLDS FOR GAS EXTRACTION PROJECTS IN SHALE
FORMATIONS IN DELAWARE BASIN’S SPECIAL PROTECTION WATERS

WEST TRENTON, N.J. (May 19) – Delaware River Basin Commission (DRBC)
Executive Director Carol R. Collier today announced that she has issued
a determination notifying natural gas extraction project sponsors that
they may not commence any natural gas extraction project located in
shale formations within the drainage area of the basin’s Special
Protection Waters without first applying for and obtaining commission
approval.

“This determination explains DRBC regulatory requirements on an interim
basis and asserts commission review over all aspects of natural gas
extraction projects in shale formations within the drainage area of the
basin’s Special Protection Waters, regardless of the amount of water
withdrawn or the capacity of domestic sewage treatment facilities
accepting fracking wastewater,” Collier said. “The commissioners intend
to adopt regulations pertaining to the subject matter contained in this
determination after public notice and a full opportunity for public
comment, but this rulemaking process can be lengthy. In the meantime,
DRBC will apply this determination in combination with its existing
regulations.”

In taking this action, Collier considered and determined that as a
result of water withdrawals, wastewater disposal, and other activities,
natural gas extraction projects in shale formations may individually or
cumulatively affect the water quality of Special Protection Waters by
altering their physical, biological, chemical or hydrological
characteristics. This finding is in accordance with Section 2.3.5 B.18
of the commission’s Rules of Practice and Procedure, which provide that
any project “that the Executive Director may specially direct by notice
to the project sponsor or land owner as having a potential substantial
water quality impact on waters classified as Special Protection Waters”
may be required to undergo review.

“The intent behind this executive director determination is to provide
directional signals, not put up roadblocks,” Collier said. “Each of
these activities, if not properly performed, may cause adverse
environmental effects on water resources. The bottom line for the DRBC
is to ensure that proper environmental controls are provided to
safeguard our basin’s water resources that are used by nearly 15 million
people.”

Most of the shale formations that may be subject to new horizontal
drilling and hydraulic fracturing techniques requiring large volumes of
water in the basin are located within the drainage area to DRBC’s
designated Special Protection Waters (SPW). The commission’s SPW program
is designed to prevent degradation in streams and rivers considered to
have exceptionally high scenic, recreational, ecological, and/or water
supply values through stricter control of wastewater discharges,
non-point pollution control, and reporting requirements. Coverage of the
DRBC’s SPW anti-degradation regulations includes the 197-mile non-tidal
Delaware River from Hancock, N.Y. south to Trenton, N.J. and the land
draining to this stretch.

Under this determination, a natural gas extraction project encompasses
the drilling pad upon which a well intended for eventual production is
located, all accompanying facilities and related activities, and all
locations of water withdrawals used or to be used to supply water to the
project. Wells intended solely for exploratory purposes are not covered
by this determination. An exploratory well is one that the project
sponsor intends to plug and cap at the conclusion of exploratory
activities without use for production or fracking. Exploratory wells are
subject to state regulation.

“To determine whether the Rules of Practice and Procedure require DRBC
review of any projects falling outside this determination, we continue
to recommend that any company proposing natural gas extraction
activities anywhere in the basin contact DRBC staff to schedule a
pre-application meeting,” Collier said.

The DRBC recognizes that each natural gas extraction project also will
be subject to the review of the environmental agency of the state in
which the project is located and, in some cases, subject to federal
agency review. The commission intends to coordinate with and, where
feasible, to utilize the review process and approvals of the applicable
state or federal agency to minimize duplication of effort and redundant
requirements imposed on project sponsors.

Any person adversely affected by this determination may request a
hearing by submitting a request in writing to the commission secretary
within 30 days of the date of this determination in accordance with the
DRBC’s Rules of Practice and Procedure.

The DRBC was formed by compact in 1961 through legislation signed into
law by President John F. Kennedy and the governors of the four basin
states with land draining to the Delaware River (Delaware, New Jersey,
New York, and Pennsylvania). The passage of this compact marked the
first time in our nation’s history that the federal government and a
group of states joined together as equal partners in a river basin
planning, development, and regulatory agency.

Additional information, including the complete determination, can be
found on the commission’s web site at www.drbc.net.

# # #
2009

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Katharine O’Hara
Communications Assistant
Delaware River Basin Commission
P.O. Box 7360, West Trenton, N.J. 08628-0360

Phone: (609) 883-9500 ext. 205
Fax: (609) 883-9522
www.drbc.net

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