Environmental Conservation Commissioner Pete Grannis said the watersheds will be removed from drilling regulations being developed for other parts of the Marcellus Shale region in southern New York. Instead, each gas well would require an individual environmental impact statement, which entails a long, costly and complicated process.
The state is drafting new drilling regulations because the gas exploration in the Marcellus Shale — a rock formation that, thanks to new drilling techniques, only recently became profitable to tap — uses high-volume hydraulic fracturing to release trapped natural gas. That involves injecting millions of gallons of water mixed with chemicals and sand into each well.
Under the broader regulations, companies applying for drilling permits would have to meet requirements spelled out in a "generic" environmental impact statement but wouldn't have to do impact statements for each well. The generic impact statement includes numerous special restrictions for sensitive watershed areas.
Grannis said it makes more sense to simply remove the watersheds from the generic impact statement.
The DEC and the state Health Department will work with Syracuse, New York City and communities within the watersheds to develop special restrictions for drilling companies seeking permits in the watersheds.
New York City officials had argued that the city would be forced to spend $10 billion on a water-filtration plant if gas exploration polluted its reservoirs.
The Marcellus Shale spans parts of New York, Pennsylvania, West Virginia and Ohio. There are 58 pending permit applications in New York's portion, but none are in those watersheds, Grannis said. Drilling has been on hold while new regulations are being developed. They're expected to be finished this fall.
The New York City watershed, covering more than 60 square miles, makes up about 8 percent of the Marcellus Shale region in New York. The Skaneateles watershed, which serves the city of Syracuse, is much smaller.
Officials in both regions had called on state regulators to ban drilling there, citing fears of polluting drinking water supplies for more than 9 million people. Grannis said that would pose legal issues because 80 percent of the land is privately owned.
Those two watersheds are the only areas of the state with special federal permits to use unfiltered surface water for drinking.
Brad Gill, executive director of the Independent Oil and Gas Association of New York, called the watershed regulations excessive and unnecessary.
"While the DEC's announcement does not constitute a drilling ban, the result will be the same," Gill said. "It will do irreversible fiscal harm to the local communities that would benefit from tax revenues through drilling, and it will harm landowners who want nothing more than to safely develop their land in a way that's in the best interest of their families and future generations."
Environmental advocates had a mixed reaction to Friday's announcement.
"This decision will not only help protect two of New York's great natural treasures, the Catskills and the Finger Lakes, it will also protect the drinking water supplies for roughly half of all New Yorkers," said Neil Woodworth, executive director of the Adirondack Mountain Club.
Alex Matthiessen, president of Riverkeeper, called it "a partial victory."
"We still have a lot more work to do to make sure the DEC issues the strictest possible regulations for drilling in the rest of upstate New York," Matthiessen said.
"Even if the practical effect is to stop development of the Marcellus Shale in these limited areas, we need to make sure there are across-the-board standards that will protect all New Yorkers from the health threats posed by industrial gas drilling," said Deborah Goldberg, an attorney for Earthjustice.
Manhattan Borough President Scott Stringer said nothing short of an outright ban on drilling in the city's watershed is acceptable.