Last week was an active week for those following regulation of Marcellus Shale natural gas development.

On December 11, New York Governor David Paterson vetoed AB 1143 / SB 8129, that would have banned all hydraulic fracturing to stimulate natural gas wells until May. Instead, he issued an Executive Order establishing a moratorium on new horizontal, high-volume, hydraulic fracturing until July 1, 2011. His counsel's statement is here.

On December 9, the Delaware River Basin Commission published its long-awaited draft natural gas well pad regulations. It did so against the advice of New Jersey DEP Commissioner Bob Martin stated in a letter of December 7 and over the objection of New York Governor Paterson stated in a letter of December 6. New York voted against release of the draft regulations at the Commission meeting of December 8. Comments on the draft are due by March 16, 2011, and the Commission plans three public hearings in February.

On December 8, the Delaware River Basin Commission also adopted a resolution drastically curtailing, and possibly terminating, planned January hearings on natural gas exploratory wells -- that is wells intended for investigation and not production. Most of the issues to have been addressed in that hearing are now to be considered in the pending rulemaking. This resolution also avoided having the hearing address the adequacy of Pennsylvania state regulatory program, an issue that opponents of natural gas development had advanced in expert reports filed in the proceeding. The Commission Chair's instructions to the hearing officer of December 3 reflect the difficulty of that issue.

The DRBC draft regulations would govern a number of issues, such as bonding and setbacks, also regulated by Pennsylvania and New York. If adopted, they would impose different rules for identical natural gas development in different watersheds, including different watersheds within the same state. The December 10 Philadelphia Inquirer quoted Commission Executive Director Carol Collier as analogizing this distinction to the regulations administered in the New Jersey Pinelands by the Pinelands Commission. Those are quite explicitly land use regulation. Whether the Interstate Compact Commissions intend to regulate each wave of land development, or just to focus on the current natural gas "boom," remains to be seen.