Company Says NYC Watershed More Important Than Profit From a Gas Well

By Sabrina Shankman, ProPublica. Posted October 28, 2009.

For now, New York City’s water appears to be safe from drilling. Responding to mounting concerns that chemicals from natural gas drilling could contaminate drinking water, Chesapeake Energy Corporation declared it will not drill in the city’s upstate watershed, the pristine water source that supplies unfiltered water to nine million downstate residents.

“Our research has shown we are the only leasehold owner in the New York City watershed, and so Chesapeake is uniquely positioned to take this issue off the table,” Chesapeake CEO Aubrey McClendon said in a released statement.

Chesapeake owns leases for 5,000 acres of the watershed, which falls within the Marcellus Shale, a deeply buried gas-rich rock formation that is poised for development. McClendon told The New York Times that the company’s holdings in the watershed are “a drop in the bucket” compared with the 1.5 million acres it has leased across the shale formation in New York and in other states.

“How could anyone well be so profitable that it would be worth damaging the New York City water system?” he said to the Times.

Chesapeake’s announcement came after more than 18 months of turmoil over drilling in the watershed. Gov. David Paterson issued a de facto moratorium on permits for drilling anywhere in New York’s portion of the Marcellus Shale after a July 2008 article by ProPublica raised environmental concerns about the drilling process. Paterson ordered state officials to conduct a fresh environmental impact analysis, and New York City representatives began asking for a ban on drilling inside the watershed. When the state’s analysis was released late last month, it proposed conditions that would allow drilling to go forward in the watershed and sparked a clamor of protest.

Environmentalists and city officials applauded Chesapeake’s announcement, but they are also urging the company to take its pledge further and sell its leases in the watershed to the city for $1.

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Sabrina Shankman is a recent graduate of UC Berkeley’s Graduate School of Journalism. She has written for the Wall Street Journal and the Associated Press, and was a researcher on PBS/Frontline's "Black Money" documentary.

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