Chesapeake Won't Drill in NYC Watershed

Chesapeake Energy, one of the nation's largest natural gas producers, said Wednesday it won't drill in the New York City watershed in upstate New York because of opposition from politicians and environmental groups.

The announcement came hours before the first of four public hearings on the state Department of Environmental Conservation's new gas-drilling regulations, which critics call insufficient to protect the city's water supply.

"We have made the business decision not to drill in the New York City watershed," Chesapeake spokeswoman Maribeth Anderson said.

Concern over drilling in the Catskills region that provides water to the city's eight million residents has become a "needless distraction from the larger issues" of gas development in the state, she said.

Anderson said Oklahoma City-based Chesapeake is the only leaseholder in the 1 million-acre region, which includes a corner of the gas-rich Marcellus Shale formation. It's an area of forests, lakes and streams.

Earthjustice, an environmental group, welcomed the news from Chesapeake but said the decision needs to be backed up by a state ban on drilling in the watershed to ensure permanent protection.

The new rules, released Sept. 30 for a 60-day comment period, were drafted as a supplement to existing state regulations on oil and gas exploration in response to concerns about gas extraction from deep shale formations using horizontal drilling and hydraulic fracturing. In that process, millions of gallons of water combined with chemicals are injected after a well is drilled, fracturing the shale to release the gas.

Hydraulic fracturing, or "fracking," is widely used in the Marcellus Shale formation, a layer of rock about 6,000 feet below ground that extends from southern New York, across Pennsylvania, into eastern Ohio and West Virginia.

Environmentalists and residents worry about accidents that could result in contamination of water supplies by chemicals added to the fracking water or brought up from the shale thousands of feet underground.