Provides for the regulation of the conducting of hydraulic fracturing; repealer

Summary of provisions

Section One - amends the environmental conservation law by adding two new titles, 15 and 16 to Article 23.

Title 15 - Defines the disclosure of composition of hydraulic fracturing fluids. This title includes definitions, the type of information submitted that is considered public, service company disclosures, operator disclosers and defines what use of service of non-complying service company is prohibited.

Section One - defines an "additive" as any substance or combination of substances found in hydraulic fracturing fluid, including a proppant, that is added to a base fluid in the context of a hydraulic fracturing treatment. Defines "Base Fluid" as the base fluid type, such as water or nitrogen foam, used in a particular hydraulic fracturing treatment. Defines "Chemical Abstracts Service" or CAS" as the chemical registry that is the authoritative collection of disclosed chemical substance information. Defines "chemical constituent" as a discrete chemical with its own specific name or identity, such as CAS number, that is contained in an additive" Defines "hydraulic fracturing fluid" as the fluid used to perform a particular hydraulic fracturing treatment and includes the applicable base fluid and all additives." Defines "hydraulic fracturing treatment" as the stimulation of a well by the forceful application of hydraulic fracturing fluid into the relevant geological formation for the purpose of creating fractures in the formation in order to facilitate production of hydrocarbons. Defines "operator" as the person authorized to conduct operations on a well. Defines "Propp ant" as sand or another natural or man-made inert material that is used in a hydraulic fracturing treatment to prevent artificially created or enhanced fractures from closing once the treatment is completed. Defines "trade secret" as any confidential formula, pattern, process, device, information or complication of information that is used in a person's business and that gives the person an opportunity to obtain an advantage over competitors that do not know or use it. Defines "well" as hydrocarbon production well. Defines "well completion report" as the report an operator is required to file with the commission following the completion or recompletion of a well, if applicable.

Section One - states all this information submitted under this section in the disclosure of composition of hydraulic fracturing fluids is considered public and will be posting on the internet.

Section One - states unless the information is otherwise authorized to be withheld as a trade secret, the chemicals used in hydrofracking will be public information and the department will post the information on its publicly accessible internet website. To qualify for trade secret protection, the person performing the hydraulic fracturing treatment must submit to the department on an approved form a formal claim of entitlement to that protection. Under this law trade secret does not authorize a person to withhold information as stated in federal or state law to a health professional who needs such information for diagnostic or treatment purposes. If a health care professional requests the information, a person performing hydraulic fracturing will provide the percent by volume of the chemical constituents of the hydraulic fracturing fluid and their associated CAS numbers. If it is not a medical emergency, the health care professional will provide the person performing the hydraulic fracturing treatment a written statement of need for the information. The health care professional will keep this information confidential, except with other health care professionals for medical treatment.

Section One - describes the Service Company Disclosures as a person performing hydraulic fracturing treatments will disclose to the department and maintain an updated master list of: a) All base fluids to be used by the person during hydraulic fracturing treatment; b) All additives used by the person in any hydraulic fracturing treatment, and their associated CAS numbers; c) All chemical constituents to be used in hydraulic fracturing treatment in this state.

Section One - states a person performing hydraulic fracturing treatments will provide to the operator of each well the following: a) The maximum pump pressure measured at the surface and the type and volume of base fluid used in each stage of the hydraulic fracturing treatment; b) A list of all additives used in the hydraulic fracturing fluid, such as acid, biocide, breaker, corrosion inhibitor, crosslinker, demulsifier, friction reducer, gel, iron control, oxygen scavenger, pH adjusting agent, proppant, scale inhibitor and surfactant; c) For each additive type listed under paragraph b of this subdivision, the specific name of the additive used and the actual rate or concentration of each additive, expressed as pounds per thousand gallons or gallons per thousand gallons and expressed as a percentage by volume of the total hydraulic fracturing fluid used; d) A list of the all the chemical constituents used in the hydraulic fracturing fluid and their associated CAS numbers, unless the identity of any chemical constituent is a trade secret;

e) For each chemical constituent, the actual rate or concentration of each chemical expressed as pounds per thousand gallons or gallons per thousand gallons and expressed as a percentage by volume of the total hydraulic fracturing fluid used;

Section One - states following the completion of hydraulic fracturing treatment on a property, the operator will include in a well completion report the following information: a) The maximum pump pressure measured at the surface and the type and volume of base fluid used in each stage of the hydraulic fracturing

treatment; b) A list of all additives used in the hydraulic fracturing treatment; c) For each additive, the specific name of the additive used and the actual rate or concentration of each additives; d) The complete information of who performed the hydraulic fracturing treatment; e) If the operator caused any additives to be used during the hydraulic fracturing treatment Section states for each additive listed the chemical constituents of the additive and their associated CAS numbers and the actual rate or concentration of each additive or chemical, expressed in the manner provided.

Section One - states the operator may supply field service company tickets, excluding pricing information, and reports regarding the hydraulic fracturing treatment, as used in the normal course of business, to satisfy some or all of the requirements.

Title 16 - describes the regulation of hydraulic fracturing, which includes definitions, concession of liability and agreements with property owners and damages.

Section One - defines "hydraulic fracturing" as the use of chemicals, water and other substances injected or pumped into a natural gas well to stimulate the extraction of natural gas well to stimulate the extraction of natural gas. Defines "producer" as any individual or entity engaged in the drilling for or extraction of natural gas through the utilization of hydraulic fracturing.

Section One - states prior to the issuance of any permit, to engage in hydraulic fracturing will deliver to the department a concession of liability and waiver of all defenses arising out of any cause of action related to property personal and wrongful death damages alleged to have been caused by hydraulic fracturing conducted by such producer. Concession and waiver shall be executed in such form and manner as shall be determined by the attorney general, and will provide for strict liability to the people of the state of New York and every person within the state for any and all damages arising from the conducting of hydraulic fracturing within this state. Every producer which enter into an agreement with an owner of real property which provides for the lease, license or grant of authority to conduct hydraulic fracturing upon such real property, shall include a copy of its concession of liability, similar to the concession of liability executed in favor of the real property owner. The concession of liability will be determined by the attorney general.

Section One - states no agreement for the lease, license or grant of authority to conduct hydraulic fracturing upon real property in new York will be executed until three independent appraisals of the real property value have been done. Upon completion of the appraisals a copy of the appraisal will be provided to the real property owner, the producer and the department and will be attached to every agreement providing for hydraulic fracturing.

Section One - states no agreement for the lease, license or grant of authority to conduct hydraulic fracturing will be executed until the department has conducted water and soil contamination testing on the property for the presence of hydraulic fracturing fluids. A report of

the results of the test will be provided to both the real property owner and the producer.

Section One - states each producer will include in every agreement it enters into with a property owner for the lease, license or grant of authority to conduct hydraulic fracturing the following: a) A statement of the financial, health and environmental risks posed by or potentially posed by conduct of hydraulic fracturing. This statement will be jointly developed and periodically updated by the commissioner, attorney general and the commissioner of health; b) A statement of the risks of ground soil and ground water contamination posed by or potentially posed by the conduct of hydraulic fracturing; c) A statement of the health risks posed by spills of and contamination by hydraulic fracturing fluids; d) A statement of the producer's strict liability for any and all damages resulting from the conducting of hydraulic fracturing, and the damages that will be awarded there for pursuant to this title.

Section One - states if there is contamination of the ground soil/or ground water by any producer, the producer will be liable for the following damages: a) To the affected real property owner, an amount equal to one hundred fifty percent of the real property value, as determined pursuant to subdivision one of section 23 - 1605 of this title, and the full cost of remediating the contaminated ground soil and ground water; b) To any person affected by such contamination, an amount equal to the cost of the diagnosis, treatment, monitoring and care of such person, for life, related to any disease or condition arising out of such contamination.

Under no circumstances will any amount of damages awarded or paid pursuant to this section be deemed to be income to any person. All such damages will be a reimbursement for losses actually incurred by the recipient thereof.

Section Two - amends subdivision 9 of section 8-0109 of the environmental conservation law to add an environmental impact statement will be prepared for any action found to have a significant impact on the special groundwater protection area, for any natural gas or oil drilling involving the use of hydraulic fracturing fluid. This statement will meet the requirements of the most detailed environmental impact statement required by this section or by any rule or regulation promulgated.

Section Three - repeals subdivision 2 of section 23 - 0303 of the environmental conservation law and adds a new subdivision 2 to supersede all other state and local laws relating to the oil, gas and solution mining industries, provided that nothing in this section will prevent any local government from: a) Enacting or enforcing local laws or ordinances of general applicability, except that such local laws or ordinances will not regulate oil, gas and solution mining regulated by state statute, regulation or permit; b) Enacting or enforcing local zoning ordinances or laws which determine permissible uses in zoning districts. Where oil, gas and solution mining is designed a permissible use in a zoning district

and allowed by special use permit, condition placed on such special use permits will be limited to the following: i. Ingress and egress to public thoroughfares controlled by the local government; ii. Routing of drilling and drilling-related transport vehicles on roads controlled by the local government; iii. Requirements and conditions as specified in permit issued by the department concerning setback from property boundaries and public thoroughfare rights-of-way, natural or man-made barriers to restrict access, if required, dust control and hours of operation; iv. Conformance to road construction standards as may be otherwise provided for by local law;

Section Three - states enacting or enforcing local laws or ordinances regulating oil, gas and solution mining not required to be permitted by the state.

Section Four - states this act shall take effect on the first of June next succeeding the date on which it becomes a law; provided, that effective immediately, any actions necessary to implement the provisions of this act on its effective date are authorized and directed to be completed on or before such date.

Justification

This legislation creates the "Property Owners Bill of Rights," This bill provides definitions for hydraulic fracturing fluid, hydraulic fracturing treatment, chemical abstracts service, chemical constituent, base fluid, operator, proppant, trade secret, well and well completion report.

This bill will protect property owners if they decide to lease their property for the use of hydraulic fracturing. This legislation will also protect surrounding property owner's safety and financial well being from the negative effects of hydraulic fracturing.

This legislation adds Title 15 and 16 to the environmental conservation law. Title 15 mandates the disclosure of composition of hydraulic fracturing fluids by any company or individual that is involved in the process of hydraulic fracturing in New York State. Companies will be expected to fully disclose every chemical in the fracturing fluid being used for the purpose of hydraulic fracturing. In order to create full transparency for all property owners, these chemicals will be made public knowledge and available on the internet.

Title 15 also defines the type of information submitted that is considered public and a trade secret. This legislation also defines a trade secret, and the process by which a company can define a product a trade secret. However, this legislation does not authorize a person to withhold information as stated in federal or state law to a health professional who needs such information for diagnostic or treatment purposes. If a health care professional requests the information, a person performing hydraulic fracturing will provide the percent by volume of the chemical constituents of the hydraulic fracturing fluid and their associated CAS numbers. If a property owner is signs a lease and authorizes the use of their land, they have a right to know any and all chemicals that are being put into their property, as well as the amount and rate of which these chemicals are being used.

In order to protect property owner's safety, any person performing hydraulic fracturing treatments will disclose to the department and maintain an updated master list of; all base fluids to be used by the person during hydraulic fracturing treatment, all additives used by the person in any hydraulic fracturing treatment, and their associated CAS numbers; and all chemical constituents to be used in hydraulic fracturing treatment in this state. All of this information will be made available in a "Well Completion Report" and will be made available to the public.

The creation of Title 15 will ensure transparency for property owners in regards to hydraulic fracturing in the State of New York. Title 15 will give property owners the knowledge they need to go into a lease agreement fully informed of all the chemicals used in hydraulic fracturing.

The "Property Owner's Bill of Rights" includes the addition of Title 16 to the environmental conservation law. Title 16 describes the regulation of hydraulic fracturing, which includes definitions, concession of liability and agreements with property owners as well as damages.

Title 16 states prior to the issuance of any permit, to engage in hydraulic fracturing will deliver to the department a concession of liability and waiver of all defenses arising out of any cause of action related to property personal and wrongful death damages alleged to have been caused by hydraulic fracturing conducted by such producer. Concession and waiver will be executed in such form and manner as shall be determined by the attorney general, and will provide for strict liability to the people of the state of New York and every person within the state for any and all damages arising from the conducting of hydraulic fracturing within this state.

Title 16 protects New York state property owner's by stating no agreement for the lease, license or grant of authority to conduct hydraulic fracturing upon real property in new York will be executed until three independent appraisals of the real property value have been done. Upon completion of the appraisals a copy of the appraisal will be provided to the real property owner, the producer and the department and will be attached to every agreement providing for hydraulic fracturing.

Under this legislation no agreement for the lease, license or grant of authority to conduct hydraulic fracturing will be executed until the department has conducted water and soil contamination testing on the property for the presence of hydraulic fracturing fluids. A report of the results of the test will be provided to both the real property owner and the producer.

Title 16 ensures property owners are fully informed on the risks of hydraulic fracturing to their land, homes, financial well being and health. Each producer will include in every agreement it enters into with a property owner for the lease, license or grant of authority to conduct hydraulic fracturing the following:

a) A statement of the financial, health and environmental risks posed by or potentially posed by conduct of hydraulic fracturing. This

statement will be jointly developed and periodically updated by the commissioner, attorney general and the commissioner of health; c) A statement of the risks of ground soil and ground water contamination posed by or potentially posed by the conduct of hydraulic fracturing; d) A statement of the health risks posed by spills of and contamination by hydraulic fracturing fluids; e) A statement of the producer's strict liability for any and all damages resulting from the conducting of hydraulic fracturing, and the damages that will be awarded there for pursuant to this title.

Title 16 protects property owners by addressing the issue of damages. If there is contamination of the ground soil/or ground water by any producer, the producer will be liable for the following damages; an amount equal to one hundred fifty percent of the real property value, and the full cost of remediating the contaminated ground soil and ground water. Damages include that any person affected by such contamination, an amount equal to the cost of the diagnosis, treatment, monitoring and care of such person, for life, related to any disease or condition arising out of such contamination.

Title 16 also states, to protect a property owner, an environmental impact statement will be prepared for any action found to have a significant impact on the special groundwater protection area, for any natural gas or oil drilling involving the use of hydraulic fracturing fluid. This statement will meet the requirements of the most detailed environmental impact statement required by this section or by any rule or regulation promulgated.

Title 16 provides that nothing in this section will prevent any local government from enacting or enforcing local laws or ordinances of general applicability, except that such local laws or ordinances will not regulate oil, gas and solution mining regulated by state statute, regulation or permit. Title 16 stipulates that enacting or enforcing local zoning ordinances or laws, which determine permissible uses in zoning districts. Where oil, gas and solution mining is designed a permissible use in a zoning district and allowed by special use permit, condition placed on such special use permits will be limited to the following; ingress and egress to public thoroughfares controlled by the local government, routing of drilling and drilling-related transport vehicles on road controlled by the local government, requirements and conditions as specified in permit issued by the department concerning setback from property boundaries and public thoroughfare rights-of-way, natural or man-made barriers to restrict access, if required, dust control and hours of operation, and the conformance to road construction standards as may be otherwise provided for by local law.

Legislative history

New legislation.

Fiscal implications

To be determined.

Effective date

This act shall take effect on the first of June next succeeding the date on which it becomes a law;

provided, that effective immediately, any actions necessary to implement the provisions of this act on its effective date are authorized and directed to be completed on or before such date.