DETERMINATION EXTENDED TO INCLUDE NATURAL GAS EXPLORATORY WELLS

WEST TRENTON, N.J. (June 14) - Delaware River Basin Commission (DRBC) Executive Director Carol R. Collier today announced that she has supplemented her May 19, 2009 determination to include natural gas
exploratory wells.

"My 2009 determination that sponsors of natural gas extraction projects in shale formations must obtain commission approval before commencing such projects expressly did not cover wells intended solely for exploratory purposes," Collier said. "Today, I am extending the provisions of my 2009 determination to include exploratory wells, subject to reservations for exploratory well projects already approved by the states on or before June 14, 2010."

By this supplemental determination, all natural gas well project sponsors, including the sponsors of natural gas well projects intended solely for exploratory purposes, must first apply for and obtain commission approval before commencing any natural gas well project for the production from or exploration of shale formations within the drainage area of Special Protection Waters in the Delaware River Basin.

"For the purpose of this determination, any natural gas well drilled in or through shale is assumed to be targeting a shale formation and is subject to this determination, unless the project sponsor proves otherwise," Collier added. All other aspects of the 2009 determination remain in effect.

Today's action recognizes the risks to water resources, including ground and surface water that the land disturbance and drilling activities inherent in any shale gas well pose. "In light of the commission's May 5, 2010 decision to finalize natural gas regulations before considering project approvals, this supplemental determination removes any regulatory incentive for project sponsors to classify their wells as exploratory wells and install them without DRBC review before the commission's natural gas regulations are in place," Collier said. "It thus supports the commission's goal that exploratory wells do not serve as a source of degradation of the commission's Special Protection Waters."

"Where entities have invested in exploratory well projects in reliance on my May 2009 determination and information from DRBC staff, there are countervailing considerations that favor allowing these projects to move ahead," Collier stated in her supplemental determination. "I am informed that since May of 2009, Pennsylvania has issued a limited number of natural gas well drilling permits within the Delaware River Basin targeting shale formations, while New York State has not issued any natural gas well permits targeting shales in the basin since that date. In contrast to the thousands of wells projected to be installed in the basin over the next several years, the risk to basin waters posed by only the wells approved by Pennsylvania since May 2009 are comparatively small. Not only are these wells subject to state regulation as to their construction and operation, but they continue to require commission approval before they can be fractured or otherwise modified for natural gas production. In light of these existing safeguards and the investment-backed expectations of the sponsors of these projects, this supplemental determination does not prohibit any exploratory natural gas well project from proceeding if the applicant has obtained a state natural gas well permit for the project on or before June 14, 2010."

Most of the shale formations that may be subject to horizontal drilling and hydraulic fracturing techniques requiring large volumes of water in the basin are located within the drainage area to DRBC's designated Special Protection Waters (SPW). The commission's SPW program is designed to prevent degradation in streams and rivers considered to have exceptionally high scenic, recreational, ecological, and/or water supply values through stricter control of wastewater discharges, non-point pollution control, and reporting requirements. Coverage of the DRBC's SPW anti-degradation regulations includes the 197-mile non-tidal Delaware River from Hancock, N.Y. south to Trenton, N.J. and the land draining to this stretch.

Any person adversely affected by this action may request a hearing by submitting a request in writing to the commission secretary within 30 days of the date of this supplemental determination in accordance with the DRBC's Rules of Practice and Procedure.

The DRBC was formed by compact in 1961 through legislation signed into law by President John F. Kennedy and the governors of the four basin states with land draining to the Delaware River (Delaware, New Jersey, New York, and Pennsylvania). The passage of this compact marked the first time in our nation's history that the federal government and a group of states joined together as equal partners in a river basin planning, development, and regulatory agency.

Additional information, including the complete supplemental determination, can be found on the commission's web site at www.drbc.net.