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Get drilling rules right

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Get drilling rules right By BRIAN MCMAHON in NYPost

Gov. Cuomo and New York’s environmental regulators should soon issue final regulations on shale-gas development in the Southern Tier. Here’s hoping they do so with force and precision — because even a hint of uncertainty could badly undermine prospects for natural-gas-related economic growth.

Without question, gas drilling promises significant economic benefits. States that have allowed such drilling — including Pennsylvania, Ohio and West Virginia — have seen bursts of prosperity.

But reports on Cuomo’s planned policies leave room for doubt that New York will share in that bounty.

Notably, a New York Times piece suggests that the state Department of Environmental Conservation will at first issue only 50 permits in five Southern Tier counties, and only in locations that support drilling.

This raises three important questions — which Cuomo & Co. should not leave unanswered:

1) Is this just a first step, a toe-in-the-water strategy to show that shale-gas development can be done safely so it can be expanded in the future? Or is it meant to be the first and last word, with no more permits to be issued anytime soon?

If the former, the governor should clearly say so. That would give the industry certainty that an investment now could lead to more approvals later. If the industry thinks that New York will never issue more than a handful of drilling permits, companies will likely just look to keep investing in other states.

2) How will New York determine what amounts to “local support”?

Requiring the local legislative body to adopt some resolution would give the industry little comfort. After all, those positions could flip if the makeup of local governing councils changes.

Huge corporations may have resources to operate in such an uncertain environment. But companies that must raise capital to invest in shale-gas development are unlikely to do so without predictability.

For this reason, the state DEC should determine “local support” using clear state-level criteria that won’t change over time.

3) Can New York justify excluding from new shale-gas drilling opportunities several Southern Tier counties where oil and gas drilling have occurred for more than 100 years?

The state’s draft guidelines already put hundreds of square miles of watershed off-limits to drilling. Beyond specific restricted areas, however, New York should issue permits under clear safeguards for exploration.

And development should be allowed anywhere outside the restricted areas where industry shows the state DEC, through the permitting process, that it can comply with the stringent standards.

Reaping the long-term benefits of shale-gas drilling will require industry to operate under strict guidelines to ensure environmental safety and public confidence. But it will also require the state to offer industry certainty and predictability — that New York really is committed to long-term growth.

Brian McMahon is executive director of the New York State Economic Development Council.

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