Commission review: DEC’s Division of Mineral Resources incompetent to regulate O&G


By Brian Brock

Programs for oil and gas regulation by the New York State Department of Environmental Conservation were reviewed by Interstate Oil & Gas Compact Commission in 1994.  The resulting fifty five page report examines the details, but does not provide an overview.  Nevertheless Finding I.10 is a good summary: “DMN can not meet its program responsibilities and administer an effective program under current budgetary conditions.  The program is at a crossroads in this regard, because the status quo is not a tolerable long-term condition.”  The Division of Mineral Resources (DMN) is the principle division in charge of oil and gas regulation.

This review was conducted by a team of six experts from IOGCC, state governments, industry, and an environmental group with observers from the federal government, industry, and another environmental group.  First, DEC answered an extensive questionnaire.  Next, DEC staff were interviewed in Saratoga Springs NY May 1 to 5.  The review team met July 13 to 15 to discuss and prepare the draft report, which was then sent to all involved.  The team met a final time August 29 to September 1 to consider all comments and prepare the final report.  Funding was from the federal Environmental Protection Agency.  The full report, minus some of the appendices, is available at

From this final report “New York State Review, IOGCC/EPA State Review of Oil and Gas Exploration and Production Waste Management Regulatory Programs, September 1994”:

Rules and Regulations

“DMN’s regulations … largely originated in 1972.  In the mid-1980s, DMN began a process to substantially upgrade its regulations through … the GEIS in July1992.  Despite the substantial period of time that has expired since the inception of this effort, revised rules have not been proposed or promulgated to date.” {Page 5}  No rules and regulations have been promulgated since.  What is more, the recent draft SGEIS was likewise issued without a rules package.

“In absence of upgraded rules [and regulations], DMN relies substantially upon conditions attached to drilling permits to implement new technical guidance. … Such permit conditions only apply to new wells and therefore of limited utility.  Enforcement questions may also arise from imposing generally applicable permit conditions without first issuing rules supporting those permitting conditions.” {Pages 5 to 6}

“One of the principal stated missions of the DEC is protection of human health and the environment.  However Part 550 [to 559] of DMN’s rules do not expressly include protection of human health and environment as a goal or policy directive.” {Page 6}

“DMN regulations were not in conformance with Article 23 statutes after 1981 [revisions] and were changed as emergency in 1992.” {Appendix B, page 6}


“From a peak staff level of 52 in the mid-1980s, the number of positions declined to 44 in FY 90[-91], and still further to 33 in the last two fiscal years.  Equally important, non-personal funds for purchase of equipment, computers, gasoline, and supplies were dramatically reduced from $230,850 in FY 90-91 to approximately $76,000 in each of the last two fiscal years.” {Page 12}

“Consequently, six inspector positions [including one filled by an inspector on extended leave] are available statewide to inspect [500 to 600 annually of the] 14,000 active wells and 5,000 wells of unknown status.” {Page 38}  Also an estimated 45,000 inactive wells.  In 2008, DMN reported inspection of 2,445 sites annually with a staff of 19.  The 2009 annual report has yet to be released.

“[Staff for] both regions [8 and 9] are under milage and overtime limitations, and have not been able to replace vehicles or purchase other equipment in the past five years.” {Page 38}

“… field staff indicated that they generally operate in a reactive mode due to staff limitations.  For example, they have not conducted routine inspections in the last three years.” {Page 38}

“Additionally inspections such as well plugging, permit transfer, and temporary abandonment inspections are done as resources are available.  Many of the 25 gas storage fields have not been inspected over the last 15 years.” {Page 38}

“The legal side of DMN activities suffers from similar resource deficiencies.  There is currently one program attorney in headquarters, whose responsibilities are divided between oil/gas and mining activities.  While DEC regional attorneys assist DMN regional staff in enforcement matters, this assistance is not always timely or adequate because of competing demands on these DEC attorneys.” {Page 14}

Siting and Permitting

“DMN rules contain several siting provisions, but these provisions apply to wells and not pits or tanks associated the wells.” {Page 21}

“DMN rules related to siting are not comprehensive, since they do not cover areas such as floodplains, wetlands, proximity to drinking water supplies, and depth to groundwater.” {Page 21}

“Fencing flagging, and caging requirements are instituted on a case-by-case basis and are not contained in regulation or guidance documents” {Page 31}

“DMN does not consider operator compliance history when issuing permits.” {Page 17}

“DMN does not provide notice of intention to issues drilling permits and does not allow public comment on drilling permits prior to issuance unless an EIS or other supplementary SEQR document is deemed necessary.” {Page 24}  Since the release of the GEIS in 1992, no permit has required EIS or other supplementary SEQR documents.

“Permits are usually issued within 10-14 days of application” {Page 17}

Brine Wastes

“This [1987] survey indicated 8.6 million barrels [360 million gallons] of produced water were generated that year.  Most produced water is discharged into streams, discharged to land surfaces, or roadspread for ice and dust control [85 to 90 percent] or recycled for water flooding [or commercially treated, 10 to 15 percent].” {Page 9}  Percentages are from Appendix B, page 7.

“In Region 9, according to DMN, there is also a large but unknown number of discharges of produced water directly to land (where there is no pit at the end of the pipe).” {Page 10}

“DMN investigation activities to date have not included abandoned pits and other waste management units.” {Page 44}

“There is no explicit authority in DMN’s rules to require corrective action for non-oil releases.”  {Page 27}  Releases such as brine and gas.

“There is little or no coordination between DRA, DMN, DOW, and local governments regarding the determination of appropriate controls for roadspreading, the monitoring of environmental impacts, or sharing of information on this practice.” {Page 11}  DRA is the Division of Regulatory Affairs, and DOW is Division of Water.

Other Wastes

“DMN’s programs do not require representative testing of drilling cuttings disposed on site, produced brines which are roadspread, or associated wastes.” {Page 29}  Associated wastes include stimulating fluids, completion fluids, produced sands, and drying and sweetening chemicals.

“In short, no agency within the DEC is responsible for, or can produce, reliable information on associated wastes generation or disposal.” {Page 9}

“According to DMN, 90% of drilling solids are buried on-site, and 10% are recycled off-site.”  {Page 9}

“E&P [exploration and production] waste is regulated by DSW as a municipal waste since it is specifically excluded from the definition of industrial waste.” {Page 19} DSW is Division of Solid Waste.

Orphaned Wells

“Almost 18,000 of the 30,000 wells in the database are not plugged according to DMN records.  [Of these 18,000,] the agency has received reports from operators on 12,857 active wells, leaving approximately 5,000 wells of unknown status requiring further investigation.” {Page 42}

“Five thousand three hundred twenty-two unplugged wells of record drilled before 1973 are grandfathered [ie exempted] from financial assurance requirements. … [therefore] DMN holds approximately $12 million of financial assurance to cover a potential liability of $100 million.” {Page 19} Assumes that plugging a well will cost an average of $20,000.

While a few of these deficiencies are addressed in the dSGEIS, those changes would only apply to horizontally drilled shale gas wells.

Changes to the DEC programs since the summer of 1994 have not been documented.  The DEC has not cooperated in a follow-up review to evaluate its progress in the last 17 years.  In 2006, follow-up reviews for New York and Kentucky were scheduled, but the one for New York never took place.  (In contrast, Pennsylvania DEP had its review in 1992, two follow-up reviews in 1997 and 2004, and a review of its hydraulic fracturing program in 2010.)  In response to a 2009 survey, DEC claimed that of the 37 deficiencies cited in the 1994 report, they had fully remedied 10 (27%) and partially remedied 14 (38%), but no documentation was provided.