January 11, 2013

New York State Department of Environmental Conservation 625 Broadway Albany, NY 12233-6510 Subject: Draft HVHF Regulations Comments Dear Sir/Madam: Enclosed please find comments from the Independent Oil and Gas Association of New York (IOGA New York) relative to the Revised Proposed Regulations proposing amendments to 6 NYCRR Parts 52 and 190, Parts 550 through 556 and 560, and parts 750.1 and 750.3. Thank you for the opportunity to provide these comments. In reviewing these comments, you will find that IOGA New York has been forced to take a more adversarial position with these proposals. Notwithstanding our excellent working relationship over the years and all the efforts that have been made by industry to educate Department personnel regarding modern natural gas drilling techniques and best management practices to minimize potential adverse environmental impacts, it appears that most of our comments on the previous proposals have not been given any credibility and that the Department has erroneously come to the conclusion that the shale resources in New York State will only be developed by large operators. This is truly unfortunate. Because of the failure of the Department to consider our comments that were submitted on January 11, 2012, we are resubmitting those comments. In addition, we are enclosing detailed comments on the Revised Proposed Regulations, together with suggested revisions to certain sections of the Revised Proposed Regulations that will ameliorate the adverse consequences of these proposals, without compromising environmental quality. Finally, we are also submitting additional letters from companies that qualify as small businesses under the State Administrative Procedure Act (“SAPA”) to reinforce the need for the Department to provide flexibility with these regulatory proposals and to meet the requirements of SAPA to reduce burdens on small businesses. As you are well aware, IOGA New York supports a high environmental bar, but the bar must be attainable by industry in order to have the valuable shale resources in this state properly developed. These regulations are replete with requirements that have no foundation in science or in the long history of modern drilling in New York State without adverse environmental consequences. In addition, in a number of instances, the Department has exceeded its regulatory authority, again with no scientific or historical basis for the offensive proposals. For example, one of the most glaring issues is the proposal by the Department to require a 300-foot setback from wetlands regulated by the United States Army Corps of Engineers. As you are well aware, the jurisdiction of the Department over wetlands is limited by Environmental Conservation Law Article 24, wherein the Legislature made the determination that only a 100-foot buffer zone is required from state jurisdictional wetlands. By attempting to regulate federal wetlands and also to implement a buffer requirement that is three times the statutory buffer for state wetlands, the Department has proposed a requirement that is not only illegal, but, in conjunction with the many other proposed setbacks and prohibitions, will make it extremely difficult, if not impossible, to site a well pad in New York State.

38 Lake Street • Hamburg, New York 14075 • Phone (716) 202-4688 • Fax (716) 202-4689

Independent Oil & Gas Association Comment Letter January 10, 2013

We welcome the opportunity to discuss any of these issues with you and your staff. We urge you to modify these regulatory proposals in a manner that is lawful, attainable, protective of the environment and consistent with the statutory mandate that the Department promote the development of oil and gas resources in New York State and protect the correlative rights of landowners to do the same. Thank you for your consideration of our comments and our proposed regulatory revisions. Sincerely, Independent Oil and Gas Association of New York,

Brad Gill Executive Director Enclosures cc: Andrew M. Cuomo, Governor Joseph Martens, Commissioner Marc Gerstman, Executive Deputy Commissioner Eugene Leff, Deputy Commissioner, Remediation and Materials Management Steven Russo, Esq., General Counsel Bradley J. Field, Director, Division of Mineral Resources Thomas S. West, Esq., The West Firm, PLLC James J. Carr, Hinman Straub PC

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Comments on the New York State Department of Environmental Conservation’s Revised Proposed Regulations for High-Volume Hydraulic Fracturing Submitted by the Independent Oil and Gas Association of New York January 11, 2013 The Independent Oil and Gas Association of New York (“IOGA”) respectfully submits the following comments regarding the Revised Proposed Express Terms 6 NYCRR Parts 52 and 190 Use of State Lands Administered by the Division of Fish, Wildlife and Marine Resources and Use of State Lands; Revised Proposed Express Terms 6 NYCRR Parts 550 through 556 and 560 Subchapter B: Mineral Resources; and Revised Proposed Express Terms 6 NYCRR Parts 750.1 and 750-3 Obtaining a SPDES Permit and High Volume Hydro Fracturing (HVHF) (hereinafter the “Revised Proposed Regulations”), as well as the related documents issued pursuant to the State Administrative Procedure Act (“SAPA”). As part of these comments, IOGA has identified areas where the Revised Proposed Regulations and the related SAPA documents fail to comply with legal requirements, thus rendering the Revised Proposed Regulations legally defective and subject to challenge. In addition to the comments that follow, Exhibit A is IOGA’s proposal on how some of the Revised Proposed Regulations should be modified, which will bring the Revised Proposed Regulations into compliance with law and improve the overall quality of the Revised Proposed Regulations without compromising environmental standards. Initially, IOGA would like to commend Department Staff’s continuing efforts regarding these regulatory proposals, including the need to respond to an unprecedented number of public comments. Although we recognize that the task at hand has been difficult for the Department, in the final analysis, the overarching concern of industry remains the failure of the Department to include provisions in the regulations that will allow Department Staff to implement the regulations in a manner that protects the environment to the maximum extent practicable, but does so in a manner that provides the necessary flexibility to allow the orderly development of the shale resources in New York State consistent with the mandates of New York law. IOGA previously submitted comments regarding the previously Proposed Express Terms 6 NYCRR Parts 52 and 190 Use of State Lands Administered by the Division of Fish, Wildlife and Marine Resources and Use of State Lands; Proposed Express Terms 6 NYCRR Parts 550 through 556 and 560 Subchapter B: Mineral Resources; and Proposed Express Terms 6 NYCRR Parts 750.1 and 750.3 Obtaining a SPDES Permit and High-Volume Hydro Fracturing (HVHF) that were put out for public comment on September 7, 2011 (hereinafter the “2011 Proposed Regulations”). In IOGA’s 2012 Comments, which were submitted on or about January 11, 2012, and are fully incorporated by reference herein (the “2012 Comments”), IOGA identified many of the same issues that are identified below, including the need for the Department to provide regulatory flexibility in the final standards such that the Department can meet its balancing obligations under the State Environmental Quality Review Act and fulfill the mandates of Environmental Conservation Law (“ECL”) § 23-0301 to promote the greater development of the oil and gas resources in New York State and to protect the correlative rights of landowners to

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have those resources developed.1 IOGA notes that a complete copy of the 2012 Comments is being submitted with these comments. I. Positive changes

IOGA has reviewed the Revised Proposed Regulations in great detail, including the changes that were made as a result of public comment received during the initial rulemaking. IOGA wishes to commend the Department for some changes that were made that were partially responsive to the needs of industry. One example is the flexibility provided by the removal of the $2 million cap and the addition of an undefined limitation, as determined by the Department, on bonding requirements for well operators. Although the Department did not accept IOGA’s suggestion for a financial security test to determine the necessity for bonding, or the adoption of a specific cap on bonding consistent with levels adopted by other states currently engaging in HVHF, this change provides the Department the ability to determine an appropriate cap for bonding requirements on an owner by owner basis. As is more fully detailed below, IOGA continues to believe that the Department should incorporate a financial assurance test to allow those companies that are fully capitalized to meet the financial assurance intended by the Revised Proposed Regulations, without unnecessarily tying up capital for extended periods of time. This is particularly true with the shale resources, which are anticipated to produce natural gas for decades. Likewise, the Department should adopt an overall cap on the amount of financial assurance that is required, per company, to keep New York State competitive with other shale producing states. As recent experience in New York State and in other states has demonstrated, these types of limits provide adequate assurance that the wells will be properly closed without the need to tie up unnecessary capital. Further, the Department has provided greater clarity to the application process by adding application procedures at proposed Section 560.3(e). IOGA commends the Department for providing a 10-day window to determine if the application is “functionally complete,” as this will move applications along on a predictable schedule. Additionally, processing applications for additional wells on a well pad associated with wells that have already received a Part 560 permit without additional public notice or comment period will provide for expediency and efficiency in processing applications. See § 560.3(e)(7). IOGA also notes that the Revised Proposed Regulations require a “flare approval” instead of a “flare permit,” which was previously proposed. This will increase efficiency in field operations, while maintaining Department oversight over any needed flares. See § 556.2(c). It is acknowledged that the Revised Proposed Regulations modified the documentation required to demonstrate the “green frac fluid analysis” requirement, both in Part 560 and Part 750-3, by limiting it to “existing data and studies.” See §§ 560.3(d)(1)(viii); 750-3.7(k)(2). This change will make assessing the chemicals intended for stimulation and preparing applications more predictable for industry. However, notwithstanding this positive change, industry, after
These regulatory requirements are complemented by the corresponding language in the Energy Law, which requires the State to “foster, encourage and promote the prudent development and wise use of all indigenous state energy resources including, but not limited to, on-shore oil and natural gas, off-shore oil and natural gas, [and] natural gas from Devonian shale formations . . . .” New York Energy Law § 3-101(5).
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considerable internal inquiry, has no consensus or definition as to what constitutes a “green” product. The Department should consider utilizing some of the current available standards for additives used in other geographic regions, even internationally, such as the “North Sea” standard that we believe to be the most rigorous standard. Currently, industry believes its products pass even those stringent requirements. In any event, it is hard to comply with a standard that has no definition or measurement. Moreover, the Department continues to require that the “green” frac fluid analysis be performed for each well permit application. This is unnecessarily burdensome on industry and does not take into account the significant progress that has been made during the four and one half years while the revised regulatory standards have been developed in New York in the improvement of frac fluid chemicals. These improvements have reduced the number and concentrations of chemicals utilized while enhancing the efficacy of the stimulation process. II. Provisions Demonstrating the Critical Need for Variances and Regulatory Flexibility

Although the Department did incorporate some changes to the regulations that are helpful to industry, in IOGA’s view, there remain significant issues for industry that prevent the Revised Proposed Regulations from being workable or legal. The net result is that the Revised Proposed Regulations will discourage development, rather than promoting development as is mandated by law. The 2011 Proposed Regulations contained numerous protective setbacks that were more extensive than those included in any other state. See §§ 52.3; 560.4(a)(1)-(5); 560.6(b)(1)(ii); 750-3.3(a)(1)-(6). The setbacks included in the Revised Proposed Regulations have been expanded upon – both for hydraulic fracturing permits and SPDES permitting. Compounding this problem, the Revised Proposed Regulations continue to promote extensive prohibitions, including prohibitions on siting within or near the Syracuse and New York City watersheds and certain aquifers. See § 750-3.3(a)(1) & (2). The Revised Proposed Regulations further maintain the additional prohibition in Part 52, which provides that no surface disturbance associated with drilling a HVHF natural gas well is permitted on any State lands, applicable to both pre-existing and new leases. See § 52.3. It is noted that this prohibition is the broadest of any setback, as it prevents any soil disturbance on state lands, which would include access roads, well pad development, and any other aspect of site development that disturbs land. See id. IOGA previously commented on the inclusion of this prohibition in the 2012 Comments, and all of its prior concerns are repeated here. Simply stated, these prohibitions are without legal authority and inconsistent with the mandate of the ECL that requires the Department to promote the greater recovery of the resource and protect the correlative rights of the landowners. ECL § 23-0301. In fact, these prohibitions amount to a taking of mineral rights without just compensation in violation of constitutional rights.2 See Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1015 (1992); Martin Marietta Materials, Inc. v. City of Carmel, 2007 U.S. Dist. LEXIS 88922 at *41 (S.D. Ind. Nov.
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No member of IOGA New York is proposing to drill in either the New York City or Syracuse watersheds and IOGA recognizes the political sensitivity of those areas. However, notwithstanding the political sensitivity, the Department does not have the authority to ban drilling in any area of the state and any such ban amounts to an illegal taking of mineral rights without the payment of just compensation.

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28, 2007); Bass Enters. Prod. Co. v. U.S., 381 F.3d 1360, 1364 (Fed. Cir. 2004) (citing Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 124-45 (1978)). Compounding these broad prohibitions are the many setbacks that are proposed, with only limited variances available to industry. Specifically, the Revised Proposed Regulations include the following setbacks in Section 560.4: (a) No well pad or portion of a well pad may be located: (1) within 500 feet from a residential water well, domestic supply spring or water well or spring used as a water supply for livestock or crops; (2) within 500 feet from an inhabited dwelling or place of assembly; (3) within a primary aquifer and a 500-foot buffer from the boundary of a primary aquifer; (4) within a 100-year floodplain; and (5) within 2,000 feet of any public water supply (municipal or otherwise, or the boundaries of any public water supply reservoir, natural lake or man-made impoundment (except engineered impoundments constructed for fresh water storage associated with fracturing operations). See also SGEIS § 7.1.11, pp. 7-73. Importantly, unlike other states that measure setbacks from the wellbore, the setbacks are from the closest edge of the well pad. Section 560.4(b). And, the Revised Proposed Regulations include a variance for only two of the five broad setback provisions (for (a)(1) and (a)(2)). Additionally, before the Department can even consider a variance, the applicant must obtain landowner and (as applicable) tenant consent for the variance. Some of the newly proposed setbacks have substantive problems. The Revised Proposed Regulations include a new setback on water supplies for crops and livestock, which was not discussed in the SGEIS, and which further restricts where sites may be located. See SGEIS Executive Summary p. 22. Further, the term “crops” and “water supply” are not defined, making the requirement vague. IOGA recommends deleting or at a minimum, defining these terms. With regard to testing in Section 560.5(d)(1), water used for irrigation purposes is not commonly isolated as applicable sources to be tested in other states and the sources can be difficult to locate, because they may be as simple as a waterhole dug by a farmer. Section 560.6(b)(1)(ii) contains an additional setback that will restrict available areas to locate well pads, which provides that “fueling tanks must not be placed within 500 feet of a perennial or intermittent stream, storm drain, regulated wetland, lake or pond.” In removing the “to the extent practical” that existed in the 2011 Proposed Regulations, the Revised Proposed Regulations actually decrease flexibility in siting well pads. This provision is likely to severely further restrict recoverable unconventional shale resources as it is possible that well pads cannot be properly designed to meet the various requirements contained in the Revised Proposed Regulations as well as this buffer, particularly with no variance provision. Additionally, it is possible that a hazard could be created because tanks may have to be placed in other areas than 4

where they normally are placed, resulting in more fuel transfers and the potential for spills and accidents. In addition to the setbacks contained in Part 560, the proposed Part 750-3 contains additional setbacks at Section 750-3.3, providing: Well pads for HVHF operations are prohibited, and no SPDES permit will be issued authorizing any such activity or discharge: (1) within 4,000 feet of, and including, an unfiltered surface drinking water supply watersheds; (2) within 500 feet of, and including, a primary aquifer; (3) within 100-year floodplains; (4) within 2,000 feet of any public (municipal or otherwise) drinking water supply well, reservoir, natural lake, man-made impoundment, or spring; and (See also SGEIS Section 7.1.11, pp.7-73.) (5) within 2,000 feet around a public (municipal or otherwise) drinking water supply intake in flowing water with an additional prohibition of 1,000 feet on each side of the main flowing waterbody and any upstream tributary to that waterbody for a distance of one mile from the public drinking water supply intake; and (See also SGEIS Section 7.1.11, pp.7-73.) (6) within 500 feet of a private water well or domestic use spring, or water supply for crops or livestock, unless the Department has granted a variance from the setback pursuant to subparagraph 560.4(c) of this Title, adopted on XX, 20XX. Again, the setbacks are measured from the closest edge of the well pad, not the wellbore as is common in other states. See § 750-3.3(b). More troublesome is the fact that a number of these setbacks are redundant with setbacks contained in proposed Part 560 and, therefore, should be deleted or a reference to Part 560 incorporated in Section 750-3.3. See, e.g. §§ 560.4(a)(3); 750-3.3(a)(2) (providing setback of 500 feet from, and including, a primary aquifer); §§ 560.4(a)(4) 750-3.3(a)(3) (prohibiting siting within floodplains). Others within Section 750-3.3 are slightly varied from those contained in Part 560, but are similar enough that, at a minimum, confusion over the application will result. See § 750-3.3(a)(4) (similar to Section 560.4(a)(5)); § 750-3.3(a)(6)(similar to Section 560.4(a)(1)). It is also likely that, especially in the absence of a variance provision, an overly broad reading of the setbacks will be imposed to further restrict available drilling areas. Indeed, only one category (Section 750-3.3(a)(6)) of the six setbacks contained in Section 750-3.3 contemplate a variance. The Department must streamline these inconsistent provisions and, if no revisions are made, must provide a rationale for why these slight variants are needed in Section 750-3.3(a) versus the identical or nearly identical setbacks contained in Section 560.4, as well as what these variants will accomplish. IOGA attaches as Exhibit A proposed revised regulations, including a 5

proposed revised Section 750-3.3, streamlining the setbacks and allowing a variance consistent with those provided in Section 560.4. Additionally, an updated Section 560.4, acknowledging the revisions to Section 750-3.3 is also included within the attached Exhibit A. Proposed Section 750-3.5(c)(1) presents an additional limitation that will eliminate eligibility for an exemption from SPDES permitting requirements contained in proposed Section 750-3.5(b) for many sites. The provision provides: (c) At a minimum, in order for the department to make a determination that the injection will not result in the degradation of ground or surface water resources pursuant to paragraph 750-3.5(b)(2) of this Part: (1) the top of the target fracture zone, at any point along any part of the proposed length of the wellbore, for HVHF must be deeper than 2,000 feet below the ground surface and must be deeper than 1,000 feet below the base of a known freshwater supply; and (2) the owner or operator must have measures in place to ensure compliance with the requirements of paragraphs 750-3.7(k)(1), (2), (3), (4), (6), and (7) of this Part and subdivisions 750-3.7(l), (m), and (n) of this Part. In addition to these general disqualifiers, the proposed SPDES general permit for HVHF operations is unavailable for sites located in certain buffer areas: (1) within 500 feet of a principal aquifer (2) within 300 feet of a state or federal wetland; (3) within 300 feet of perennial or intermittent streams, as described in Parts 800-941 of this Title, storm drains, lakes or ponds.” See § 750-3.11(d); see also SGEIS § 7.1.11, pp.7-73. Finally, all of these buffers and setbacks are supplemented with the revised draft SGEIS published in 2011,3 which includes as proposed mitigation a number of other prohibitions on areas where drilling may occur: (1) Prohibition on HVHF construction and drilling activities occurring in contiguous grassland habitat of 30 acres or more during nesting season of grassland birds for “Grassland Focus Areas” See SGEIS Executive Summary p. 24; see also SGEIS § 7.4.1.2, pp. 7-79-82. (2) Site specific ecological assessment and implementation of mitigation measures for HVHF activities in contiguous forest patches of 150 acres or more in “Forest Focus Areas.” See SGEIS Executive Summary p. 24; see also SGEIS § 7.4.1, pp. 7-83-87.

Of course, IOGA has no way of knowing whether additional restrictions have been added to the SGEIS since its last publication in 2011. If additional restrictions and/or setbacks are included with the final SGEIS, these problems will be compounded even further.

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(3) Site specific EIS required for HVHF on “principal aquifers” or within a 500 foot buffer outside of “principal aquifers.” SGEIS Executive Summary p. 21; see also SGEIS § 7.1.11, pp.7-73. Given the breadth and extent of setbacks that were originally proposed, industry is concerned that yet further setbacks and prohibitions have been added to the Revised Proposed Regulations. Industry is particularly concerned because there is a complete absence of any factual basis for most of the setbacks as well for the extensiveness of the setbacks in the Revised Proposed Regulations or the SGEIS. Indeed, industry’s proven track record would support lesser regulation, not further, more stringent prohibitions as has occurred in the Revised Proposed Regulations. In IOGA’s view, the prohibitions on siting within a primary aquifer and a 100 year floodplain are unnecessary. Industry has an excellent track record of drilling within primary aquifers for many years without incident which would support allowing drilling in these areas. Further, the prohibition on 100 year floodplains is unneeded. Operators in other states routinely drill in floodplain areas, with effective, proven contingency methods that avoid incident during floods. In fact, the experience of the natural gas industry in the Northeast during tropical storm Irene demonstrated that the natural gas industry is more than capable of dealing with severe flood conditions. There were no incidents reported at natural gas sites. In a similar vein, IOGA opposes the requirement for a specific EIS for principal aquifers. Like primary aquifers, industry has decades of experience drilling in these areas without incident. It is also evident from the paltry regulatory support documents putatively prepared in compliance with SAPA that the Department has not considered other factors in proposing these extensive prohibitions and setbacks. Two factors that are highly relevant to the location of well pads include terrain and the availability of surface rights. Terrain is an obvious issue that needs little explanation.4 The Southern Tier where most of the shale development will occur is an area of the state that has hilly terrain, with steep slopes and limited areas that are suitable for well pads. There is nothing in any of the analysis put forth by the Department that indicates that the Department has considered this limitation in relation to the prohibitions and setbacks that have been proposed. Likewise, it is very common in New York State for landowners to restrict or prohibit surface access as part of an oil and gas lease. Yet, there is nothing in the regulatory support documents that indicates that the Department considered this limitation in relation to the prohibitions and setbacks. As a consequence, the Revised Proposed Regulations will make it extremely difficult, if not impossible, to find proposed well pad locations when all of the prohibitions and setbacks are factored in with limitations created by to terrain and surface rights. Of greatest concern to the industry is the failure of the Department in the Revised Proposed Regulations to include a general variance provision or waivers to provide regulatory flexibility. Simply put, industry cannot operate under a regulatory scheme that does not provide substantially greater flexibility, including a broad variance provision. In sharp contrast to the way the Department is proposing to regulate the oil and gas industry, the Department has enacted more than 40 separate regulatory provisions across numerous programs it administers, each of
The Department is obviously aware of the significant slopes in the Southern Tier and has also proposed a disqualification from obtaining a general permit in certain areas with steep slopes. See proposed §750 – 3.11(f)(2)(iii).
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which that allow applicants to vary or modify the governing regulations. Attached as Exhibit B is a listing of these regulations. Many of these provisions, if not the majority, are a general variance authorization allowing “any provision” of the regulatory program to be varied provided environmental standards can be met. Such general variances are provided for many industries whose sole purpose is to handle waste, and on a permanent basis, including hazardous and radioactive waste, both during transport and at waste management facilities. See 6 NYCRR § 360-1.7 (allowing variance for solid waste management facilities); 6 NYCRR § 361.1(allowing variance for hazardous waste disposal facilities); 6 NYCRR § 364.1 (allowing variance for solid waste transporters); 6 NYCRR § 370.3 (allowing variances for hazardous waste management systems); 6 NYCRR § 373-1.1(allowing variances for hazardous waste treatment, storage and disposal facilities); Id. at 373-3.10(allowing variances for owners and operators of hazardous waste facilities); 6 NYCRR § at 376.1 (allowing variances for hazardous waste land disposal); 6 NYCRR § 376.4 (allowing variances from treatment standards required for treatment of hazardous waste); 6 NYCRR § 380-3.5 (allowing variances for discharge and disposal of radioactive material to the environment); 6 NYCRR § 381.8 (allowing variances for transport of low level radioactive waste); 6 NYCRR § 382.4 (allowing variances for low level radioactive waste disposal facilities). Petroleum storage facilities are also provided a general variance provision. See 6 NYCRR 614.1. Indeed, even as part of remediating suspected or known contaminated sites as part of the Brownfield Cleanup Program the Department allows variation from a strict cleanup standard to suit a particular site. See 6 NYCRR §375-3.8(e)(4); see also 6 NYCRR § 375-1.8 (allowing flexibility in remedial programs). It is evident that even where, by statute, a substance is designated hazardous, radioactive, or otherwise a contamination risk, the Department has consistently included a flexible variance provision allowing site-specific standards that are protective of the environment. And yet, for HVHF, a temporary process with numerous safeguards included in the practice and required by the evolving regulatory standards, virtually no variance provisions are provided. There is demonstrably absent a general variance provision such as is provided for the solid, hazardous and radioactive waste industries, despite the critical need for one in light of the numerous setbacks and prohibitions the HVHF industry must follow. The Department has provided no rationale for its disparate treatment of HVHF, an industry whose practices present substantially fewer risks to the environment than industries involved in management, transport and disposal of solid waste, hazardous waste, radioactive waste, and petroleum - all industries with a long history of discharges to the environment and corresponding environmental contamination – whose regulations contain generous variance provisions. As the Department is well aware, the oil and gas industry has an excellent track record in New York State, both in terms of developing deep wells and hydraulically fracturing many wells, without any significant adverse environmental impacts. Although HVHF presents some additional challenges, those challenges are more than adequately managed through the extremely robust regulatory program that is being created under the SGEIS and the Revised Proposed Regulations. There is simply no justification for treating the oil and gas industry differently than virtually every other industry that is regulated by the Department. This is particularly so with the numerous prohibitions and setbacks that have been proposed, which will, absent the variance

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provision, render much of the state off-limits to oil and gas development. A proposed variance provision for Part 560 and for Part 750-3 is included in Exhibit A. Additionally, these proposed setbacks and prohibitions are arbitrary and capricious because the draft SGEIS5 does not provide data or other record support for the scope of the restrictions that the Department has proposed. Indeed, even in its response to comments the Department provides no basis for the setbacks and the need to expand them. Previous comments from industry have pointed out that the proposed setbacks vastly exceed those required by other states and the Department fails to provide a reasoned basis for asserting that those setbacks are inadequate. Such a failure renders the Revised Proposed Regulations arbitrary and capricious, and subject to annulment. See New York State Ass’n of Counties v. Axelrod, 78 N.Y.2d 158, 166-69 (1991) (finding regulations lacked rational basis because of lack of evidence in the record supporting across the board increase in cost); see also Law Enforcement Officers Union, Dist. Council 82, AFSCME, AFL-CIO v. State, 229 A.D.2d 286, 291 (3d Dep’t 1997) (finding single housing regulation arbitrary and capricious because it contains a minimum square footage requirement while double occupancy housing does not contain such a requirement). The Court of Appeals in New York State Association of Counties cited the often-repeated general rule that “an administrative regulation will be upheld only if it has a rational basis, and is not unreasonable, arbitrary or capricious.” New York State Ass’n of Counties, 78 N.Y.2d at 166. The Revised Proposed Regulations do not provide record support for a number of the proposed setbacks and, in particular, for the increases to setbacks previously included in the 2011 Proposed Regulations. In the absence of this explanation, the Revised Proposed Regulations could not stand judicial challenge. Compounding this arbitrary and capricious treatment of the oil and gas industry, the Revised Proposed Regulations impermissibly assert state jurisdiction over federal wetlands with the consequence that it will be extremely difficult, if not impossible, to site well pads and access roads. As noted above, Section 750-3.11(d) of the Revised Proposed Regulations disqualifies an operator from obtaining the general stormwater permit if any activities are located within 300 feet of a federal wetland. (The Revised Proposed Regulations now include a definition for “wetland” applicable to Part 750-3. See § 750-3.2(b)(54) (defining wetland as “any area regulated pursuant to Article 24 of the Environmental Conservation Law and any other wetlands regulated under Section 404 of 33 U.S.C. 1251 et seq.”). Initially, IOGA questions the legal authority of the Department to include within the definition of “wetland” wetlands that qualify as federal wetlands. As the Department is well aware, the limits of the Department’s jurisdiction regarding wetlands are detailed in ECL Article 24. This effort to incorporate federal wetlands into the regulatory definition is, therefore, ultra vires.6 The buffer contained in Section 750-3.11(d), which is three times greater than that established by statute for New York regulated freshwater wetlands generally, unduly restricts and complicates development of the Marcellus shale resource. See ECL 24-0701(2). Since federal regulations have no minimum acreage requirement and can be often found as ruts in old
See Footnote 3, above. Industry acknowledges its requirements to comply with federal laws regarding potential impacts to wetlands that are jurisdictional under those laws. As in the past, industry will continue to work with the United States Army Corps of Engineers concerning any permits or approvals that are necessary.
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logging roads and the like, this potential proposed setback could have devastating consequences on the development of the shale resources in New York. Indeed, substantial additional areas of the Marcellus shale will now be foreclosed from development through use of the HVHF SPDES General Permit, and operators would have to expend significant additional time and money on an individual SPDES permitting process, which could ultimately result in adjudicatory hearings and a waste of the resource in contravention of ECL 23-0301. With these new buffers and the additional setbacks contained elsewhere in the Revised Proposed Regulations, the already greatly reduced available areas, which were previously estimated to make approximately 50% of the resource off-limits to development, are further restricted such that it will be difficult for any company to justify an investment in New York. As mentioned above, a variance provision is desperately needed to avoid lengthy cost and delay in permitting and this illegal extension of the Department’s jurisdiction over wetlands should be eliminated from the Revised Proposed Regulations entirely. In addition, there is a fundamental unfairness to this restriction. No other SPDES General Permit imposes a 300 foot restriction based on proximity to wetlands or any other water resource. Indeed, the one general permit that includes any buffer at all includes only a 100 foot buffer, applicable to the actual deposit of waste on the ground near the wetland, in stark contrast to HVHF operations, which may only discharge stormwater. The other five SPDES general permits contain no wetland or similar buffers, including, notably, the SPDES construction permit for well drilling activities issued April 1, 2010. See SPDES General Permit for Stormwater Discharges from Construction Activity (GP-0-10-001) Requirements for Well Drilling Activities, NYS Dep’t of Environmental Conservation (Apr. 1, 2010), available at http://www.dec.ny.gov/docs/water_pdf/welldrilling.pdf. Therefore, any other applicant or industry could place their operations 100 feet from a New York-regulated wetland with no wetland or other permit, while, at the same time, that applicant could utilize the SPDES General Permit. The same unfairness exists for those projects proposed to be developed in a portion of the wetland, which could use the state freshwater wetland permitting program. Indeed, no other industry subject to Department regulation must comply with a flat prohibition relating to wetlands. (And, to the extent any buffers exist, those other programs could obtain a variance in relation to the buffer). This regulatory prohibition prevents solely the HVHF industry from using a SPDES general permit while being located near a wetland, and restricts the ability of the HVHF industry to utilize the existing statutory freshwater wetland permit program to develop sites. Additionally, with respect to federal wetlands, any other industry could develop as close as directly adjacent to the wetland with no wetland permit, and still utilize a NY SPDES General Permit. No other Department program attempts to usurp or piggyback on Federal permitting authority and then compound this illegal extension of its regulatory authority with an excessive buffer. Indeed, 6 NYCRR § 360-2.12(c)(8) shows proper deference to the governing federal agency in prohibiting siting landfills in federal wetlands unless an Army Corps of Engineers (“ACOE”) permit is obtained, and requiring consideration of alternatives, but only to the extent “required under federal or State law.” The Revised Proposed Regulations should similarly recognize the authority of the ACOE to determine proper regulation of the wetlands under its jurisdiction. Since the Revised Proposed Regulations seek to impose a buffer zone on federal

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wetlands, where none exists at federal law, not only does this extend the Department’s jurisdiction impermissibly, but it conflicts with the Clean Water Act. More specifically, in the absence of this restriction by the Department, a number of Nationwide Permits (“NWP”) exist that would allow HVHF operations to discharge into or even disturb federal wetlands while also using the SPDES General Permit. For example, the ACOE includes in its Nationwide Permit Program a specific NWP for construction or modification of outfall and associated intake structures. See Army Corps. of US Engineers, 2012 Nationwide Permits, Conditions, District Engineer’s Decision, Further Information, and Definitions (with corrections), Permit #7 (2012), available at http://www.usace.army.mil/Missions/CivilWorks/ RegulatoryProgramandPermits/NationwidePermits.aspx. The ACOE has also authorized up to a one-half acre loss of waters of the United States for the purpose of placing utility lines, including pipelines carrying natural gas. See id. at Permit #12. There are a number of other permits that, absent this substantial prohibition, an HVHF operator could utilize to develop its well pad. See id. at Permit #18 (authorizing minor discharges of dredged or fill material into up to one-tenth of an acre of federal wetlands); see also id. at Permit #19 (allowing up to 25 cubic yards of dredging in waters of the United States); see also id. at Permit #33 (authorizing temporary structures, work, and discharges, necessary for construction activities, access fills or dewatering of construction sites); see also id. at Permit #43 (permitting discharges of dredged or fill material to construct storm water management facilities). Even assuming it is legally permissible for the Department to infringe upon a federal agency’s regulatory authority in this way, it is confusing to the extreme that the Department would prohibit HVHF operations within 300 feet from wetlands from using a SPDES General Permit when the very Federal agency regulating them has determined those sites may be disturbed or impacted using the expedited NWP process. Beyond these numerous NWP avenues ordinarily available to an applicant, an individual permit could also normally be applied for. The proposed 300 foot buffer, therefore, also forecloses the HVHF industry from utilizing an existing federal statutory scheme to develop its property in an efficient manner which minimizes the regulatory burden. What this means is that an HVHF operator could obtain an approval from the ACOE to disturb wetlands to build its well pad, to then have the Department require an individual SPDES permit application, which would subject an operator to unnecessary, protracted proceedings, and which could ultimately preclude development, all on the basis of this excessive 300 foot buffer. Critically, the Department’s actions in engulfing all of the wetlands regulated by separate Federal agencies deprive the various Federal agencies charged by law with regulating these wetlands the opportunity to exercise that authority. This provision must be deleted, or at least modified to, at a minimum, remove the federal wetlands subject to other agencies’ review from the scope of “wetlands” subject to the buffer. Additionally, in the absence of a demonstration as to why a buffer three times the size of the statutory buffer surrounding New York regulated wetlands is necessary for use of the proposed HVHF SPDES General Permit, the 300 foot buffer should be rejected and the 100 foot buffer applicable to New York regulated wetlands in general reinstated. Since the 100 foot buffer zone is established by statute (ECL §24-0701(2)), this is yet a further example of where the Department has engaged in ultra vires activities.

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III.

State Administrative Procedures Act (SAPA) Issues

As IOGA commented previously in its 2012 Comments, the 2011 Proposed Regulations, and the related Regulatory Impact Statement (“RIS”) and Regulatory Flexibility Analysis (“RFA”) fail to comply with a number of the mandates of SAPA. Several defects continue to exist in the current Revised Regulatory Impact Statement (“RRIS”) and the Revised Regulatory Flexibility Analysis (“RRFA”) issued in conjunction with the Revised Proposed Regulations. Indeed, some of the defects have worsened. IOGA previously submitted substantial comments regarding the essential requirement that the RIS detail the significant financial costs to industry to comply with the 2011 Proposed Regulations. See SAPA 202-a (3)(c)(i) & (iii). To aid with this effort, IOGA provided an assessment of the permitting and planning costs associated with the 2011 Proposed Regulations. The RRIS acknowledges receipt of these costs, but largely reports the numbers as speculative and excessive, without documentation to support that claim. The RRIS notes some attempts that were made to obtain more information; however, it fails to provide “a statement setting forth its best estimate” in the absence of an analysis of costs as required by SAPA 202-a(3)(c)(iv). Rather than complying with these statutory requirements and either accepting the cost analyses provided by industry or documenting meaningful alternative numbers, the Department bootstraps this issue by asserting that the cost will include the “potential costs that the regulated community should have expected from the mitigation measures and/or permit conditions that have been identified in the rdSGEIS.” NYS Dep’t of Environmental Conservation, Revised Regulatory Impact Statement: High-Volume Hydraulic Fracturing - 6 NYCRR Parts 52, 190, 550-556, 560, and 750, Proposed Regulations (2013); available at http://www.dec.ny.gov/regulations/87440.html. This position fails to recognize that the Revised Proposed Regulations and the mitigation standards being developed under the SGEIS are being developed in tandem, on a parallel track. If the Department’s position were true, there never would be a requirement to assess the cost of new regulations if those regulations are evaluated under the State Environmental Quality Review Act. This, of course, is not true. Accordingly, the RRIS and related documents utterly fail to provide a quantifiable best estimate of cost to demonstrate “the cost for the implementation of, and continuing compliance with, the rule to regulated persons.” See RRIS; SAPA § 202a(3)(c)(i). Without this estimate, the enactment of the Revised Proposed Regulations violates SAPA. More importantly, there is no assessment of the cost to comply with the Revised Proposed Regulations or a meaningful basis to assess less costly alternatives for industry. Accordingly, the Department has failed to comply with a number of statutory mandates of SAPA, including those mandates which require that agencies minimize the cost to small businesses. IOGA also notes that its prior estimate of cost is likely inaccurate now, as the Revised Proposed Regulations include a number of new regulatory requirements that will impose additional cost on the regulated community. As just one example out of a number of new requirements imposing cost, additional water sampling is now required, both for baseline analysis (including an increase in the number of sources that must be tested, as well as the parameters to be tested for), and flowback and production brine. This sampling will generate new costs not previously assessed by IOGA and, critically, not addressed by the Department in 12

the RRIS. This violates SAPA. Likewise, the Department has not provided any meaningful analysis of the cost to develop all of the plans that are required to support permit applications. These regulatory omissions must be corrected. When these direct costs are included with the indirect costs incurred in the many areas of the state that will be off limits to development, resulting in loss of investment in the leases, geologic assessments and the like, the conclusion is inescapable that the Department has violated SAPA. (To say nothing of the staggering cost of compliance with the Revised Proposed Regulations). Additionally, the Revised Proposed Regulations now contain a requirement that applicants for HVHF well permits “pay all permit fees required under the Environmental Conservation Law” and that the “applicant . . . pay any costs assessed by the department pursuant to section 80109(7) of the Environmental Conservation Law and . . . sections 617.13 and 618.1” of 6 NYCRR. See § 560.3(f). Although 6 NYCRR Section 617.13 putatively allows the Department to recoup its costs in preparing or reviewing an EIS, including “a chargeback to recover a proportion of the lead agency's actual costs expended for the preparation of a generic EIS,” this is the first time that the Department has announced its intention to assess these costs against industry. Notably, even though the process to develop the SGEIS has been pending for approximately four and one-half years, the Department never raised this issue publicly. As such, the Department should be estopped from asserting these costs retroactively at this point in the process. In addition, the RRIS fails to specify any estimate of the actual costs the Department has expended in preparing the SGEIS, and has failed to provide any indication of how the costs to each applicant will be determined and assessed. As the costs to prepare the SGEIS are uniquely within the Department’s knowledge, omitting this information in its assessment of costs to industry in the RRIS cannot pass muster under SAPA. Indeed, the RRIS does not even mention that there is a cost associated with this new application fee requirement, or any of the other new costs the Revised Proposed Regulations include. Lastly, the proposal to assert SEQRA fees through 6 NYCRR §§ 617.13 and 618.1 does not even acknowledge the limits on those costs provided in the Department’s own SEQRA regulations. As provided in the regulations, those costs are limited to a percentage of development and other costs set forth in Section 617.13(b), (c) and (d). Of course, the Department is required to follow its own regulations. See Era Steel Constr. Corp. v. Egan, 145 A.D.2d 795, 799 (3d Dep’t 1988). Particularly relevant here is subparagraph (d), which limits costs associated with applications regulated under the minerals program. Since the oil and gas program is part of the minerals program, the Department is limited by subparagraph (d) in the amount that can be charged to each applicant. Under that regulatory provision, each applicant could be charged a maximum fee for each unit developed based upon a percentage of the total cost to develop the well pad and the access road, and the cost to run any utilities, if any, to the well pad. IOGA is willing to accept this limitation as a compromise concerning this issue. Those costs could be charged against the initial permit or permits that are part of the application leading to the development of the well pad and access road within the unit established by the initial permit application. Thereafter, no additional fees would be assessed against infill wells drilled from the common well pad. In addition to the violations noted above, SAPA Section 202-a(3)(g) requires a discussion of alternatives and the reasons why those alternatives were not incorporated into the rule. IOGA 13

previously commented that the RIS is required to have sufficient discussion of alternatives, and that the RIS failed to do this, which was particularly egregious given the significant costs being imposed on the regulated community and the failure of the Department to incorporate regulatory flexibility into the Revised Proposed Regulations. Additionally, IOGA noted that its “comments identify a number of less costly alternatives to avoid and/or minimize” impacts to the regulated community, including small businesses. 2012 Comments, Tab 3, p.3. The RRIS fails to acknowledge that any alternatives were suggested in public comment, particularly by the industry to be regulated, and instead continues to rely on the limited no-action alternative and the ‘denial of permits’ alternative. This violates SAPA. A significant evaluation of additional, less costly alternatives is required to properly finalize and adopt the Revised Proposed Regulations. Once again, IOGA is submitting proposed changes to the Revised Proposed Regulations that will accomplish the Department’s goal of protecting the environment while providing the industry with necessary flexibility. Should the Department fail to adopt these changes, it will be, yet again, in further violation of SAPA. Perhaps the most egregious violation of SAPA is the failure of the Department to acknowledge the significant regulatory impacts on small businesses and to identify measures to minimize those impacts. As the Department is well aware, SAPA contains a requirement for the Department to prepare a regulatory flexibility analysis. See SAPA § 202–b(2). IOGA previously commented that the RFA failed to consider impacts to small businesses engaging in HVHF as required by SAPA. IOGA additionally provided letters from ten (10) separate companies intending to engage in HVHF operations in New York that meet SAPA’s definition of “small business.” Notably, at least eight (8) of those letters were from operators who identified their prior investments that were intended to develop shale resources in New York State, which are in jeopardy, or were going to be sold because of the significant regulatory cost and burden included in the 2011 Proposed Regulations.7 Each letter discussed the impacts that will be experienced by that small business and many asked that the Department provide further review of the impact to small businesses and propose alternative, less costly requirements to allow small businesses to be competitive in the HVHF field. Several of the letters also emphatically stated that their businesses and the oil and gas industry in general, will be forced to stop doing business in New York if the regulatory requirements remain as burdensome as then proposed. The RRFA does not acknowledge any of these comments or the many other comments that have been received from small businesses. Instead, the RRFA outright states that “it is not expected that small businesses . . . will be engaged in HVHF itself.” See NYS Dep’t of Environmental Conservation, Revised Regulatory Flexibility Analysis for Small Businesses & Local Governments, p. 4 (2012), available at http://www.dec.ny.gov/docs/administration_pdf/ rhvhfrfa2.pdf. This statement patently false, as is demonstrated by the small business letters attached to the 2012 Comments and the new small business letters that are attached to these comments. See Exhibit C, attached. Notably, any impacts to small businesses that were reported in the 2012 Comments have increased, as the Revised Proposed Regulations include a number of new requirements that will increase costs experienced by small businesses. The Revised Proposed Regulations, therefore, place an enormous new burden on small businesses, particularly those that intend to engage in HVHF operations (such as the companies who
New small business letters are attached as Exhibit C, which includes letters from many of the same companies that provided letters in support of the 2012 Comments.
7

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previously commented), which requires that the RRFA make an effort to determine the impacts to those businesses. Accordingly, the RRFA is defective in its failure to consider any of these impacts to small businesses that may engage in HVHF operations. This is a direct result of the failure of the Department to acknowledge that small businesses will be impacted by the Revised Proposed Regulations and to provide regulatory flexibility in the revised proposal to minimize the impact to small businesses. Of course, the Department can still make revisions to the Revised Proposed Regulations to incorporate regulatory flexibility and, therefore, minimize the impact to small businesses. The best example is the need to provide general variance provisions, similar to the variance provisions in the many other regulatory programs administered by the Department, consistent with IOGA’s comments above. Also, the Department must eliminate a number of the regulatory proposals identified above that clearly are in excess of the jurisdiction of the Department. IV. Technical Comments a. 551.6 – Financial Security As mentioned above, IOGA acknowledges the amendment to proposed Section 551.6 to specify that the Department will approve a bonding cap for each owner. However, IOGA previously cited bonding levels of $15,000 to $60,000 for Ohio and West Virginia, with Pennsylvania considering a blanket bonding cap of $600,000. West Virginia ultimately adopted a bonding limit of $250,000 in Pennsylvania adopted a bonding limit of $600,000. The Department did not acknowledge the expertise of its sister states currently engaging in HVHF. Further, this proposed regulation provides financial uncertainty for industry, as they will not be able to reliably predict the capital requirements for a particular permit requirement with no indication whatsoever of the bonding the Department may impose. This uncertainty also violates SAPA, as discussed above. It warrants noting that the Department includes a variance procedure in at least two other regulatory programs (hazardous and radioactive waste) to allow an applicant to demonstrate financial responsibility and thereby be relieved from excessive financial assurances. See 6 NYCRR § 373-2.8 (allowing a variance from financial assurance requirements under the hazardous waste treatment, storage and disposal facilities program); see also 6 NYCRR § 3.8 (allowing a variance from financial assurance requirements for hazardous waste facilities); see also 6 NYCRR § 383-1.5 (providing procedure for variance from financial assurance requirements for low-level radioactive waste disposal facilities); see also 6 NYCRR § 383-6.11 (providing for variance from financial assurance requirements for radioactive waste land disposal facilities). A similar program could be incorporated in the Revised Proposed Regulations. Therefore, IOGA encourages the Department to adopt a reasonable cap on bonding consistent with other states, and with the requirements of SAPA, including, as previously requested in IOGA’s comments, a financial test for financial security.

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b. Part 553 – Well Spacing Requirements IOGA commends the Department for continuing to include a variance provision in the well spacing provisions, consistent with the recognition in the statute that nonconforming units should be available to operators. ECL § 23-0503(3). However, the Proposed Revised Regulations do not go far enough in that they do not incorporate the statutory standards set forth in ECL § 23-0503(3) for establishing a unit that does not conform to statewide spacing. Recommended additions are set forth in the IOGA revisions to the Revised Proposed Regulations. See Exhibit A. Many operators believe that when prudent planning and efficient resource development considerations are put into effect together with the many restrictions and setbacks that are proposed by the Department and the natural limitations of terrain and landowners’ restrictions to surface access that it will be necessary to propose nonconforming units and to propose wellbore paths that do not conform to the requirement to centralize the initial wellbore. Accordingly, these variance provisions will be important to determining whether the development of deep shale resources can be conducted in New York on a practical, operable or profitable basis. c. 554.1(c)(1) Recycling to the “Maximum Extent Feasible” The Department modified proposed Section 554.1(c)(1) from the 2011 Proposed Regulations to incorporate changes that could create significant additional costs and regulatory burdens upon industry. The 2011 Proposed Regulations based the requirement to prepare a fluid disposal plan on whether there is a “probability . . . that brine, salt water or other polluting fluids will be produced or obtained . . . in sufficient quantities to be deleterious to the surrounding environment.” Now, the Department has removed that limitation. Instead, a fluid disposition/disposal plan is required for all permit applications, as well as “any operation reported to the department on the Sundry Well Notice and Report form that requires pre-approval from the department.” See § 554.1(c)(1). This makes no distinction for de minimus generation of materials required for disposal, particularly for the Sundry Well Notice and Report form requirement, which may involve changes that do not generate waste, and yet a fluid disposal plan would be required. Further, the spectrum of materials that must be managed in the plan has greatly increased. Previously, the Department proposed to require disposal plan for “fluids.” Now, the Department has increased this to include “used drilling mud, flowback water, and production brine.” Id. Additionally, this proposed regulation now contains a requirement that “[t]he owner or operator [ ] state in its plan that it will maximize the reuse and/or recycling of used drilling mud, flowback water and production brine to the maximum extent feasible.” Id. While industry embraces reuse and/or recycling of materials resulting from the HVHF process, requiring reuse and/or recycling “to the maximum extent feasible” places an unclear and unmanageable burden on industry that could create frequent challenges to the sufficiency of a fluid disposition/disposal plan. Such a standard does not take cost or practicality into consideration, as various recycling or reuse methods may technically be “feasible,” but may be cost-prohibitive, or may generate impacts greater than disposal methods that do not involve recycling or reuse; e.g., some of the recycling technologies employ significant amounts of energy. In sum, this language is too absolute, and 16

would require an operator to follow what is viewed as the maximum reuse/recycling solution, regardless of cost. This is an unreasonable burden to impose on industry and is yet another example of where the Department has crafted the Revised Proposed Regulations in a manner that is too restrictive and without the required regulatory flexibility. To address the unreasonableness of the requirement that recycling and/or reuse of used drilling mud, flowback water and production brine be to the “maximum extent feasible,” while still accomplishing the goal to recycle and/or reuse materials as often as possible, IOGA has prepared suggested revisions to Section 554.1(c)(1) in the attached Exhibit A. d. 556.2(b), (c); 560.6(c)(28)(29); EPA NSPS, 40 CFR 60 Subpart OOOO Flaring Issues The Department made some revisions to various proposed regulatory provisions governing potential air emissions related to the HVHF process. See, e.g. 6 NYCRR §§ 556.2(b), (c), 560.6(c)(28), (29). The Revised Proposed Regulations require that venting gas during flowback must be through a 30 foot flare stack (unless previous wells show no hydrogen sulfide in the gas) and must be ignited “whenever possible.” § 560.6(c)(28). The stack must have a self igniting device. Id. The Revised Proposed Regulations also require that reduced emissions completions, with minimal venting and flaring, must be preformed if the infrastructure is in place to transport or market the gas. Over this past summer and fall the United States Environmental Protection Agency (EPA) proposed and adopted New Source Performance Standards (NSPS) for oil and gas wells including those that are completed using hydraulic fracturing unless more stringent state or local regulations are in place. “The rule covers any gas well that is an onshore well drilled principally for production of natural gas.’’ (Federal Register August 16, 2012; 77 FR 49490) This regulation became effective October 15, 2012. The federal regulations will be more stringent than the Revised Proposed Regulations as of January 1, 2015, except for the New York flowback and workover regulations at 6 NYCRR Part 556.2(b). Until this date, under the federal regulations, the owners/operators have the option of using reduced emissions completions (RECs) or completion combustion devices (with a continuous ignition source), the same as is required in the Revised Proposed Regulations. The federal regulations encourage the use of REC and complete combustion devices in the interim. For fractured and refractured gas wells, the federal rule generally requires owners/operators to use reduced emissions completions, also known as ‘‘RECs’’ or ‘‘green completions,’’ to reduce VOC emissions from well completions. To achieve these VOC reductions, owners and/or operators may use RECs or completion combustion devices, such as flaring, until January 1, 2015. As of January 1, 2015, owners and/or operators must use RECs and a completion combustion device. The rule does not require RECs where their use is not feasible, as specified in the rule. (See 40 CFR 60.5375; 77 FR 49543-44; Federal Register August 16, 2012 [Emphasis added]) Well completions subject to the new federal standards are gas well completions following hydraulic fracturing and refracturing operations. These completions include those conducted at newly drilled and fractured wells, as well as completions conducted following refracturing operations at various times over the life of the well. As was explained in the proposal preamble, 17

a completion operation associated with refracturing performed at a well is considered a modification under CAA section 111(a), because physical change occurs to the well resulting in emissions increases during the refracturing and completion operation. (Federal Register August 16, 2012). The Revised Proposed Regulations (6 NYCRR Part 556.2(b)) prohibit the release of gas to the atmosphere during a flowback or workover for more than 48 hours. Further, §556.2(c) indicates that flaring is considered a release of gas and must then be limited to 48 hours or have an extension filed on a per well basis. Such a requirement is infeasible as most well cleanouts will exceed a 48 hour period allowing for no clean up or flowback time. To file for extension for each well will be labor intensive. Furthermore, these restrictions exceed those required by EPA’s NSPS’s Subpart OOOO and may be operationally impossible to meet. IOGA recommends that the Revised Proposed Regulations follow, or incorporate by reference, the federal regulations. The federal regulations allow for more flexibility regarding REC use before January 1, 2015 and are not dependent on gathering lines. Moreover, the Revised Proposed Regulations will be out of date if they are not amended before January 1, 2015 to be as strict as the federal regulations. There are no time limits on the flowback operations for completion in the federal regulations since completion times will vary from well to well. Flowback, as defined by the federal government, ends with either well shut in or when the well is producing continuously to the flow line or to a storage vessel for collection, whichever occurs first. See 77 FR 49497. This change should be made to the Revised Proposed Regulations. The time limits imposed by the Revised Proposed Regulations cannot be met, are burdensome to operators, and would require more paperwork from the operators and unnecessarily consume time of state employees. Moreover, since paperwork burden was not discussed in the RRIS it is yet a further violation of SAPA. e. 560.2(b)(4) Best Management Practices The Revised Proposed Regulations include a clarification to the proposed definition of “best management practices” at Section 560.2(b)(4). This section now defines “best management practices” to “mean measure or methods used to prevent or minimize potential impacts on air quality, biological resources, land, and water quality caused by drilling, deepening, plugging back or converting or producing a well subject to this Part.” § 560.2(b)(4) (emphasis added). The changes noted in this definition broaden the duration of operations encompassed in the definition, as well as the scope of impacts that must be addressed. Additionally, no changes were made to make this definition consistent with the definition of best management practices contained in 6 NYCRR § 750-1.2 as IOGA previously suggested. Instead, a separate definition of “best management practices” applies to SPDES permits for HVHF operations. This is yet another example of differences between the well permitting regulations and the SPDES regulations, which should be eliminated or explained. Practically speaking, however, this definition is nearly meaningless as the Revised Proposed Regulations only employ the term in two places, in reference to invasive species requirements and in reference to restoration of native plant cover associated with partial site

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reclamation. See § 560.3(a)(16) & (17). Nearly all of the impacts cited in the definition of best management practices are irrelevant to these topics. The definition should, therefore, be deleted. f. 560.2(b)(7); 560.3(d)(1); 560.5(h) Chemical Disclosure Requirements The Revised Proposed Regulations include new requirements to disclose chemicals contained in hydraulic fracturing fluid, including most notably a new requirement to disclose the contents of the hydraulic fracturing fluid after fracturing is complete, a requirement to post chemical constituents used in an HVHF well on an online chemical disclosure registry, and better defined trade secret protections. IOGA fully supports the Department’s efforts to increase transparency of chemical constituents through new sections 560.2(b)(7), 560.3(d)(1) and 560.5(h)(4). Members of the service company industry who may seek protections for the chemical constituents within hydraulic fracturing fluid are generally comfortable with the Department’s approach in the Revised Proposed Regulations; however, these companies have a few concerns. Preliminarily, the Department’s approach and the Revised Proposed Regulations vastly overstate the potential impact from additives to hydraulic fracturing fluid by referencing material safety data sheets (“MSDS”) instead of analyzing the actual make up of the fluid as a percentage. The Revised Proposed Regulations should provide at least some acknowledgement that any chemicals used in hydraulic fracturing fluid are diluted by substantial measure. This dilution is critical in evaluating the impact a chemical constituent has on the environment in relation to the HVHF process. Referencing an MSDS does not provide an accurate view of the impacts, because the make-up of the fracturing fluid contains such a small percentage (in the range of 1 percent) of additives. It is commonplace for substances used every day by consumers as well as industries to have a standard based in parts per million, or even parts per billion. For example, chlorine is added to drinking water used every day by millions of people, but in much less quantity than that described on the MSDS sheet, which makes the MSDS sheet not relevant to the impacts experienced by water consumers. If a ppm or ppb standard was used for HVHF, it would give perspective to the actual risk presented, instead of reviewing the potential dangers of a material in its concentrated form as listed on the MSDS sheet. Such an approach allows the Department and the public to review the properties and any hazards associated with these substances in diluted form consistent with how industry utilizes all of the additives in the field.8 IOGA commends the Department for acknowledging protections for trade secrets in proposed Part 560 that are important to various sectors of the HVHF industry. Such a balance serves both New York State’s right to know with the protections normally afforded confidential trade secret information. The FOIL protections and procedures are generally consistent between the disclosure required during the well permit application process and the post-completion reporting, however; Section 560.5(h) contains an inconsistency in the protections afforded compared with the protections contained in Section 560.3(d). When applying for a well permit, Section 560.3(d) allows the applicant to seek trade secret protections for the identity of each
8

Industry acknowledges that an MSDS is relevant for emergency responders relative to the chemicals that are stored on site prior to use in the high volume hydraulic fracturing process.

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additive proposed for use (see § 560.3(d)(1)(ii) & (2)), while the identity of each additive is not protected in the post-completion disclosures. See § 560.5(h)(1)(viii) & (2). This should be corrected. It is also noted that the proposed SPDES regulations require disclosure of “a representative assay of the concentrations of chemical constituents present” to apply for treatment or disposal of HVHF wastewater for POTWs, privately owned disposal facilities, and for UIC wells. See § 750-3.12(c)(2), (d)(2) & (f)(3). Additionally, the POTW and privately owned disposal facilities must maintain “a list of chemical constituents used in HVHF, along with a representative assay of the concentrations of chemical constituents present, as well as other parameters that may be present.” See § 750-3.12(c)(5) & (d)(5); see also (c)(7). However, there are no specific trade secret protections notwithstanding that those constituents are protected during the well permit application and completion stages. While the general SPDES regulations9 allow an applicant to request confidentiality pursuant to 6 NYCRR Part 616, this does not provide sufficient protection, especially given the broad disclosure requirements unique to the HVHF program and the tailored trade secret protections the Department proposes in Part 560. IOGA recommends, therefore, that proposed Part 750-3 be modified to incorporate the trade secret protections contained in Section 560.3(d). See Exhibit A for proposed revisions to Section 750-3.12. In addition, Section 560.3(d)(1) should do more to encourage flexibility in disclosing components of hydraulic fracturing fluid as part of a permit application, such as allowing broad potential ingredient lists to be filed, with clarifications as to which of those ingredients disclosed were actually utilized provided in the later disclosure included in Section 560.5(h)(4). This type of flexibility would take into account the fact that, very often, permit applications will be drafted many months (6 to 12 months) before the well is actually drilled and before site-specific geologic conditions are identified through the drilling phase of well development, which may necessitate changes in the frac fluid composition. By allowing a broader array of potential chemicals to be used in the hydraulic fracturing stimulation process, the Department will give the industry, including the service sector of the industry, the flexibility that they need to make adjustments at the time of stimulation consistent with the statutory mandate to promote the ultimate recovery of the resource. IOGA previously submitted comments regarding the requirement to complete a “green” frac fluid analysis for each well permit contained in Section 560.3(d)(1)(v) (which is now subdivision (d)(1)(viii)), as well as Sections 750-3.7(k)(2). The 2012 Comments recommended conducting a biennial master chemical review with the HVHF service companies instead of a permit specific review. As the Department did not accept this recommendation, all of IOGA’s previous remarks regarding the “green” hydraulic fracturing fluid analysis are repeated and incorporated by reference here. Although IOGA supports the effort to encourage improvements to the hydraulic fracturing process that have resulted in a reduction in the number of chemicals used and improvements in efficacy, this is yet another example of the failure of the Department to implement regulatory flexibility.

9

See 6 NYCRR § 750-1.22.

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Additionally, while IOGA acknowledges that the documentation making up the green frac fluid analysis requirement, both in Part 560 and Part 750-3.7, is now limited to “existing data and studies,” industry is unclear as to the meaning and application of the requirement to document that additives “exhibit reduced aquatic toxicity.” See §§ 560.3(d)(1)(viii), 7503.7(k)(2). As with chemicals used in any industrial process, there are many substances that have not been fully tested on all species. Presumably, the new language limiting the analysis to existing data and studies would not require any additional aquatic toxicity studies, but this should be clarified. Further, Section 560.6(c)(23)’s prohibition on the use of hydraulic fracturing fluids other than those identified in the well permit application without Department approval should be clarified to provide flexibility, i.e. by allowing the Department to approve changes verbally, with written approval following if necessary. Such flexibility is necessary, as noted above, because of changing conditions in the field that can only be discovered during the drilling and hydraulic fracturing process. Alternatively, allowing applicants to identify a broad array of chemicals that may be used in the stimulation process would solve this problem by allowing flexibility. Finally, IOGA notes that there is an inconsistency in the Revised Proposed Regulations. An applicant for a well permit must identify the proposed hydraulic fracturing service company pursuant to Section 560.3(d)(1)(vii). Practically speaking, this company may change during the six to twelve months between submitting an application, receiving approval, and ultimately hydraulically fracturing a well, and there is no opportunity to amend this information in later disclosures or on the Pre-Frac Checklist and Certification. IOGA recommends that any changes to the service company be identified on the Pre-Frac Checklist and Certification. g. 560.3(a)(16) Invasive Species The Revised Proposed Regulations now include a requirement for an applicant to produce “a list of invasive species found at the well site and description of the best management practices which will be used for preventing the spread of these invasive species, including measures being used to prevent new invasive species from being transported to the site.” See § 560.3(a)(16). This provision, which is unique to any Department industrial or commercial permitting program, presents a number of concerns. In 2003, the State took initial steps to address the growing problem of invasive species and statutorily established the Invasive Species Task Force (Chapter 324 of the Laws of New York 2003). The Task Force studied the problem of invasive species and provided recommendations to the Governor and Legislature in the Final Report of the New York State Invasive Species Task Force (Task Force 2005). Subsequently, the Legislature implemented the first Task Force recommendation by establishing the NYS Invasive Species Council (Council) and the Advisory Committee to the Council (Chapter 26, Laws of New York, 2008, Environmental Conservation Law, Article 9, Title 17). According the to the New York State Invasive Species Management Strategy which was prepared for and submitted to the Department, it is recommended that the Invasive Species Council should “undertake an initiative to integrate invasive species concerns in all relevant state 21

and local planning and construction projects.” New York State Invasive Species Management Strategy, § 4.3, p. 4-8 (2011). The recommendations clearly state this approach should focus its limited resources and energies on state and local projects, not private sector activities. Additionally, the Management Strategy does not recommend best management practices or protocols for construction projects or other industrial activities. The provisions of proposed section 560.3(a)(16) call for the creation of a management strategy by industry that is not been contemplated, vetted or recommended by the state’s own Invasive Species Council, is not part of its Invasive Species Management Strategy nor is it discussed as part of the processes outlined by statute and subsequent tasks forces to address real and challenging invasive species issues. Furthermore, the construction and surface disturbance activities associated with HVHF differ in no way from the historic development of conventional well sites or with the development of typical commercial sites such as shopping centers. As the Invasive Species Council conducted a rigorous review of potential industrial and commercial activities that could serve as conduit for the spread of invasive species and failed to identify oil/gas well site development as a primary activity of concern, there is no basis for this requirement. Accordingly, IOGA believes that the Department is placing undue burden on the HVHF industry without any basis in law or policy, and without merit. Accordingly, Section 560.3(a)(16) should be removed from the Revised Proposed Regulations. In the event that the Department does not remove this provision, IOGA recommends that the Revised Proposed Regulations include flexibility to develop and implement an operator specific invasive plan. Prescribed requirements on analysis, mapping, identification, biological assessment, requirements to reintroduce native (yet now currently absent) species, and significant vehicle washing requirements, should not be advanced as prescriptive requirements. Additionally, failure include the potential cost associated with developing 1) best management practices for preventing the spread of invasive species and 2) measures for preventing transport of new invasive species to the site, violates SAPA, as described above. Indeed, in the absence of any guidance on how to control invasive species at an HVHF or similar industrial site, the time and cost to develop such a program may likely be considerable. Currently, no Department regulations require a permit applicant to address invasive species, with the exception of the transport of firewood. In the absence of any analysis as to cost in the RRIS and RRFA, however, IOGA cannot be certain how much this will cost and what unintended consequences will occur. It is, therefore, critical that the Department remove this requirement or provide significant changes so that it is workable for industry. h. 560.3(a)(17); 750-3.2(35) Partial Reclamation IOGA previously commented that the definition of “partial reclamation” was different in the proposed Part 560 regulations (§ 560.2(b)(18)) and the proposed Part 750-3 regulations (§ 750-3.2(b)(35)), and that the Part 750 definition should be deleted, with a reasonable timeframe imposed for partial reclamation imposed in the Part 560 regulations. The Department accepted none of these suggestions and, although modifications were made to the Part 750 definition of “partial reclamation,” these modifications to not adequately address IOGA’s concerns. As industry has made clear to the Department on a number of occasions, including in its 2012 22

Comments, there will be a variety of factors that will dictate the rate at which wells are developed on a common well pad. Well pads typically are not reclaimed at all until the well pad has had all of the wells drilled, the wells are hydraulically fractured and the wells have been turned into production. Where full well pad development is spread out over time, the sites are stabilized and seeded & mulched, where necessary, but not reclaimed. Requiring unnecessary reclamation promotes unnecessary land disturbance, which will actually increase the potential for impacts from stormwater runoff. i. 560.3(e) Application Procedures The Revised Proposed Regulations now contain a procedure for submission and review of HVHF well applications, which, as mentioned above, is useful to industry. However, IOGA is concerned that proposed Section 560.3(e)(5) will create an opportunity for inefficiency in the permitting process. By allowing comments on “local and site specific issues that have not been addressed in the Final Generic Environmental Impact Statement,” the Department may open itself up to continual comment challenging the sufficiency of the SGEIS and its applicability to a particular site. Additionally, this Section should make clear that the Part 560.3 regulations govern the application process and do not create any new requirements that might be interpreted as being subject to the Uniform Procedures Act, including any process that would give rise to the right to an adjudicatory hearing. j. 560.5(c) Non-Routine Incident Reporting The Revised Proposed Regulations include modifications to Section 560.5(c) regarding reporting of non-routine incidents. IOGA notes that a “non-routine incident” is described by statute at ECL Section 23-0305(8)(h), and the Revised Proposed Regulations do not contain a specific definition outside of proposed Section 560.5(c). IOGA recommends that a definition be added to the Part 560 definitions section. This terminology could be used in a definition of “nonroutine” incident. As currently proposed, the term “non-routine incident” includes incidents of water complaints and other items which were not really intended as a non-routine incident in the statute. IOGA has revised proposed Section 560.5(c) to be more consistent with the statutory definition in Exhibit A, attached. This terminology could be used in a definition of “non-routine incident.” k. 560.5(d) Sampling Parameters IOGA reviewed and compared the Revised Proposed Regulations to industry’s standard pre-drill baseline water parameters completed in the neighboring states (PA & OH). IOGA has a number of resulting comments. Section 560.5(d)(1) was modified to include a number of minimum parameters that must be sampled for all required water testing. Even with the addition of these minimum parameters, this regulation still seems to be open-ended. IOGA suggests having a defined list without the caveat of as “specified by the department.” The modifications to Section 560.5(d)(1) added a requirement to test Gross Alpha and Gross Beta. However, this sampling is not required in neighboring states such as Pennsylvania.

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Section 560.5(d)(1) added a requirement to test the Static Water Level (when possible), which requires, for accurate results, invasive measures on the subject water well. Performing these procedures will greatly increase the risk of exposure for the landowner’s well/water source and expose industry to potential claims from landowners concerning adverse impacts to their well by reason of the invasive procedure. Currently, industry’s program is only through “noninvasive” measures, which means industry does not open or measure anything within the confines of the water well or source. This minimizes the risk of a landowner claiming that their well has been contaminated, or damages to their water pump, flow or other water well features have occurred. Using any invasive measure for testing has a very high risk. Industry generally only performs invasive measures like this where required by lease water clause requirement, which do exist but generally are not a common part of a typical industry’s program. IOGA also notes that applying the “when possible” provision to the static water level testing could be difficult, as this Section contains no discussion on how the Department will determine if testing is possible. Section 560.5(d)(1) also adds Volatile Organic Compounds (VOCs), and specifically BTEX, to water sampling parameters. Industry in other states currently reports BTEX in their baseline analyses; however, IOGA questions the need to require sampling of other VOCs as part of the water sampling requirements. Other VOCs are not compounds commonly used in the HVHF industry, so no later comparison would be needed. Further, operations in Pennsylvania do not require this sampling. Sampling BTEX helps industry understand if there are legacy issues commonly associated with any underground storage tank (UST) and other downstream industry activity present. IOGA would, therefore, recommend deleting the requirement to sample VOCs other than BTEX. In the event the Department does not delete this requirement, industry requires a full understanding of which VOCs the Department will want tested, particularly to be able to assess cost, as there would be an added cost per sample. If VOC testing is required, IOGA recommends adopting a list of the VOCs that must be tested to the Revised Proposed Regulations in either a table within the regulations or an addendum. Section 560.5(d)(2) now includes a requirement that “all significant deviation(s) from the baseline compositions” be reported to the Department. This needs to be better clarified as to what is a “significant deviation” and the “timing” for when a “determination” is made. No other state has a requirement like this. Only one state (CO) currently has a “post-drill” sampling requirement, but it does not have any notification of variances with analytical results. An important consideration here is that there are common and normal “natural,” “seasonal” and “analytical” variances that are acceptable in environmental analysis. If this becomes a requirement, then thresholds for acceptance need to be clearly defined. Industry has additional questions regarding the sampling requirements in general. Will the sampling data be kept confidential? “Ambient” sampling might identify an individual well issue that might affect a landowner’s private property value or result in an enforcement action on the well owner. Section 560.5(d)(3) talks about submission of test results to New York State Department of Health. Will that lead to public disclosure? If so, that landowner should know 24

that going into the sampling process. The Revised Proposed Regulations do not appear to take into account or require any assessment of the well construction itself as part of this sampling requirement or identification of existing pollution sources that might already be impacting the well. Finally, what specifically constitutes a “reasonable attempt” to (1) obtain a landowner’s permission; and (2) to sample and test a well?” Industry needs to understand the outreach requirements that will be in effect. l. 560.5(f) Internet Posting of Waste Tracking Forms The Revised Proposed Regulations have added a requirement for the owner and operator to post completed Drilling and Production Waste Tracking Forms, for any wastes “disposed instead of recycled or reused,” on the owner or operator’s website within 30 days of receipt of the waste by the disposal company. See § 560.5(f). As the Revised Proposed Regulations require a Waste Tracking Form to be prepared “for any used drilling mud, flowback water, production brine and drill cuttings removed from the well site,” each time these materials move off a site to a disposal facility (i.e., each truckload), a form would have to be prepared. Id. For a given site, this could result in hundreds of postings per well. Initially, IOGA questions the legal authority for this requirement, which appears to be based upon “right to know” principles rather than environmental mitigation. Any such requirement should have a statutory foundation, which is totally lacking here. In addition, this requirement appears to be an arbitrary requirement that is being imposed upon the natural gas industry without any similar requirements being imposed upon other industries, including industries that engage in the business of generating, transporting or disposing of wastes. Indeed, the Department rarely requires posting of information on the internet and in no other case is industry required to post information on its own website for informational purposes only. Further, no federal environmental law imposes this requirement on the permit holder as a means of disclosure; the federal agency generally maintains and posts information of this nature in some form on its own website. All of this points to the conclusion that the Department is proceeding in excess of its legal authority. IOGA, therefore, recommends that the requirement to post Waste Tracking Forms on the operator’s website be removed, or in the alternative, that the Department be responsible for posting the information on the Department’s website, perhaps in a similar manner to its current environmental remediation sites and spill incidents or oil and gas well databases. m. 560.7(c) Mineral Oil Containing Drill Cuttings The Revised Proposed Regulations added a prohibition on the onsite burial of drill cuttings contaminated with polymer-based mud containing mineral oil lubricant. See § 560.7(c). This prohibition is unnecessary, and discourages flexibility and advances in technology. There are new nano-materials and advancing technology to render these materials inert and safely bury them onsite. These technological advances, should be properly evaluated and permitted by the Department pursuant to a Beneficial Use Determination or similar approval. IOGA, therefore, recommends removing this restriction and including a provision to allow these materials to be buried if proper approvals are received. 25

The wording used in Section 560.7(c) related to “disposal” (and seemingly excluding beneficial reuse opportunities) should also be revised for consistency with Section 554.1(c)(4). See Exhibit A for proposed revisions to this section. n. 560.7(i), (k); 750-3.7(k)(6) Radioactivity Issues A number of revisions were included in the Revised Proposed Regulations relating to radioactivity. For example, Section 560.7(i) now includes a requirement to analyze flowback water, production brine, and the soils adjacent to these fluids for radioactivity. The oil and gas industry conducts periodic external radiation surveys to detect the presence of NORM in equipment and wastes. The finding of external radiation levels in excess of standards, which differ somewhat from state to state, triggers requirements to handle wastes and decommissioned equipment according to regulations. Survey results are also used to determine the need for specific NORM management procedures to ensure appropriate industrial hygiene practices. It is also a routine practice to survey soils during the decommissioning of sites. A practical suggestion is to require periodic external radiation surveys and to establish a trigger level above which wastes and surplus equipment must be treated according to NORM management procedures. As the Department is well aware, data collected by the Department itself has demonstrated that flowback and produced water do not present significant NORM issues in New York State. In April, 1999 study entitled “An Investigation of Naturally Occurring Radioactive Materials (NORM) in Oil and Gas Wells in New York State” concluded that the amount of NORM in produced water is relatively insignificant and does not amount to any public health hazard. Specifically, the study included 43 brine (salty waters brought to the surface as a byproduct of gas production), 10 scale, two sludge, two water and one soil sample. Only two brine and one scale sample indicated radium isotope concentrations that were greater than 5.0 picocuries per gram (pCi/g) total radium (pCi/ml for liquid samples such as brines). The brine radium results, 0.95 and 24 picocuries per milliliter (pCi/ml) for one sample, and 3.8 and 7.7 pCi/ml for the other (Ra-226 and Ra-228 respectively), were found not to pose any threat to public health or the environment. This conclusion is supported by an analysis of road disposal of the brine with the U.S. Department of Energy’s (USDOE) Residual Radioactive Material Guideline computer model (RESRAD). The scale result, 11 pCi/g for Ra-226 and 3.8 pCi/g for Ra-228, was also found not to pose any threat to public health or the environment due to the low amount of scale deposited in gas plant piping. Based upon this analytical data the Department reached the following conclusions: 1. Several types of oil and gas well field wastes were found to contain slightly concentrated NORM but not at concentrations sufficiently high to pose a threat to the public health or the environment. These wastes include gas well field brines and well casing scales, and oil well sludges and sediments.

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2. Scale build-up on gas well casings is limited and though one scale sample revealed slightly elevated NORM concentrations, the scale is neither radioactive enough nor present in sufficient quantities to pose an environmental threat. 3. Concentrations of NORM in tank bottom scales and sludges and in brine pit sediments were not found to pose a significant threat to the public health or environment. If construction did occur on a former brine pit, construction activities and filling would likely decrease potential exposure well below the NYSDEC TAGM-4003 cleanup guideline of 10 mrem/yr. Tank bottom sludges would not be present at a high enough concentration and/or in sufficient quantities to generate a hazard to the public health or the environment. 4. Disposal of brines on roads as an aid to snow and ice control does not pose any significant radiological dose to the public due to NORM constituents. This issue was examined extensively using U.S. D.O.E. RESRAD modeling to assess potential doses to the public 5. Recycling of oil and gas well equipment should not pose a public health or environmental threat due to the small quantities of scale present and the low concentration of NORM found present in the scale. 6. This investigation demonstrates that the concentrations of NORM in oil field wastes in New York State were at least two to three orders of magnitude lower than those found in the North Sea. The NORM concentrations found in New York State well field wastes do not pose any significant occupational or nonoccupational radiological exposure to workers or residents. Against this backdrop, any effort to require extensive testing of water, soil or equipment is without a scientific or factual basis and is based upon speculation that these media may have NORM concentrations beyond those that are been documented in the field. Additionally, the inclusion of such excessive sampling requirements is arbitrary and capricious. The Revised Proposed Regulations, and the record, provide no scientific or other basis for the sampling proposed in Section 560.7(i) and (k). In light of the Department’s prior study of these very issues, with the above-cited conclusions, it can only be described as arbitrary and capricious for the Revised Proposed Regulations to ignore the Department’s own previous, extensive studies and require significant, unnecessary sampling without any justification for contradicting the findings of those studies. IOGA therefore, recommends, at a minimum, that further clarification is needed as to how often the Department expects the flowback water or production brine to be sampled & tested for NORM. The Revised Proposed Regulations currently suggest that any volume of flowback, or produced fluids that are being taken off site requires sampling and testing for NORM. This is clearly excessive and must be corrected. Specifically, the Revised Proposed Regulations require “[f]lowback water . . . must be tested for naturally occurring radioactive material prior to removal from the site,” and a similar requirement for fluids recovered during production. See § 560.7(i). The term “tested for” included in 560.7(i) in relation to testing of naturally occurring radioactive materials (“NORM”) 27

is vague as it could include full quantification of the concentrations of various radionuclides or just screening for the presence of same. This should be clarified. If this section intends to require sampling for every well, it seems to be a bit excessive. Based on industry’s experience in this area, it does not seem very likely that there will be enough NORM in the water phase to be detectable with instruments that can be used on site; therefore, a lab analysis would most likely be required. Furthermore, industry expects that the NORM concentrations in the initial flowback will be very low as during these stages it is mainly injected water that is produced. Additionally, if flowback water or production brine is coming from the same formation, the quality of the material isn’t going to change dramatically, especially if it’s coming from the same well pad or a well pad in close proximity geographically. For all of these reasons, having to sample every load or well seems excessive, and the Department should specify the sampling requirements in a practical manner or allow operators to develop a sampling plan as part of their Fluid Disposal Plan required pursuant to proposed Section 554.1(c). IOGA suggests one composite sampling over a 24 hr period and testing one time per well pad prior to those liquids being taken to disposal, or that a periodic analysis of water (e.g. quarterly) occur, and only if the water is to go to a POTW. If the water is to be disposed of by injection or reused, then the NORM content is irrelevant. Industry is unaware of any requirement to analyze NORM concentrations in produced water disposed of by injection anywhere else. The most efficient manner to address with this issue is, as is noted above, to review the needs of a specific site and its geology and include necessary sampling in the Fluid Disposal Plan required pursuant to proposed Section 554.1(c). Regarding the requirement to analyze production brine and flowback water for Ra226 and Ra228, industry reports that these parameters are commonly evaluated for drinking water (DW) sources. Based on industry’s prior experience, for high salt/barium concentrated samples like flowback water, the selection of analytical methods is critical. The standard DW method for these (e.g. – EPA 903/904) are very problematic to matrix interferences. The method requires the sample to be spread on a dish (called planchete) and higher salts will cause the material to “crack” causing errors in the emission counting process. Additionally, these methods commonly use barium as the surrogate of choice to show the accuracy and recovery of the method in a controlled environment. Since barite is used in some drilling fluids for a weighting material, this interferes with a possible biased high result thereby limiting the usefulness of the data. Therefore, use of Gamma Spectroscopy (Gamma Spec) is preferred when the analysis of high salts/barium potentially exists. The problem with Gamma Spec is that one has to make certain assumptions of equilibrium since the isotopes of Radium (226 and 228) are alpha and beta emitters and not a gamma emitter. Normally this is done through the inference/assumption of Bismuth 214 (Bi214) in equilibrium of Radium 228 in after a 21-day in growth process. Bi214 is a gamma emitter and can be measured through gamma spec. This method is more resilient to the matrix complications of high salts/barium concentrations; however, the detection limit is normally not to the 1 pCi/L standard EPA methods (903/904) use. Commonly, the wastewater limit of 30 pCi/L is often used for these samples and that limit is achievable with gamma spec. Accordingly, it is evident that this sampling requirement could cause confusion if a sampling method is not carefully considered in advance of analysis. Further, significant delays could result. Radiochemistry is very complex and interpretation of the data is a very detailed 28

process. The analysis alone takes 21 days to complete accurately with a common turnaround time of 28-30 days from an analytical lab. Given that all flowback water and production brine must be removed from a well site within 45 days after completion of drilling and simulation, this lengthy turnaround time could jeopardize an owner or operator’s ability to properly manage water within this timeframe. See § 560.7(a). Also, for the duration of sampling review and analysis, additional storage on site may be required, which would cause additional surface disturbance. IOGA also notes that commonly, the costs per sample for a suite of NORM testing would approximately be $300-$500 per sample. This would not include sampling costs (consultant if collected third-party). Therefore, a significant cost burden is imposed by this sampling requirement. IOGA also recommends that the requirement for testing “other analytes as directed by the department” should be eliminated from the Revised Proposed Regulations or specified, particularly in light of the potential significant cost and delay in turnaround time on receiving the results. For the testing of soils and other solids, the sampling issues are even more complex, which will result in further costs and delays. Again, this is an issue that does not have a factual or scientific basis to support the proposal. As the Department is well aware, New York already has significant experience with the handling and disposal of solids from Marcellus wells in Pennsylvania. Several landfills are already handling these materials and at least one landfill, the Chemung County Landfill, was required to develop and implement a screening procedure to screen for NORM concentrations in drill cuttings emanating from Marcellus shale wells in Pennsylvania that are being disposed of at that landfill. That landfill utilizes radiation detectors at the scale which weighs all wastes coming into the landfill. The detector is regularly calibrated and detection levels have been set under Department supervision. Notably, even though that system has been operational for several years, there have been no loads of drill cuttings that have detected concentrations of NORM at the detection levels specified by the Department. As an alternative to a prescriptive regulation requiring testing, IOGA recommends that the Department allow the industry to apply best management practices for the assessment of potential NORM accumulation in soils and equipment. Integral to these management practices is the use of commercially available direct reading hand-held radiation detection instrumentation along with risk-based action criteria. Sample equipment is as follows: ANALOG Ludlum model 3-97 NORM meter with internal and external probes This is a very robust NORM meter used in industry. Meter employs 2 probes with dual meter scale. • External pancake probe that detects alpha, beta and gamma radiation and is used to frisk personnel for NORM contamination and measure contamination on equipment surfaces. • Internal scintillation probe is built into the base of meter. This probe detects penetrating gamma 29

radiation and is used to identify or flag potentially NORM contaminated process equipment (even when in operation) This probe can also be used to measure gamma dose rates in occupied areas. This single meter is a very cost effective unit as compared to purchasing 2 separate meters, each dedicated to a scintillation & pancake probe. Note this meter is not intrinsically safe10. ANALOG Ludlum model 3IS meter connected to 44-2 scintillation probe

This meter and probe gives the user a robust and "Intrinsically Safe" instrument that detects penetrating gamma radiation and is used to identify & flag potentially NORM contaminated process equipment (even when in operation). This probe can also be used to measure gamma dose rates in occupied areas. Such management practices are in use in many oil / gas producing states and countries and have been shown to be protective of the both worker and public health and effective in screening equipment / solid wastes for proper disposal / disposition. Typical triggers strive to derive soil and equipment NORM criteria that is protective of public health in accordance with Title 10, Part 20 of the Code of Federal Regulations applying a public exposure criteria of 100mREM/yr. The evaluation of worker exposures should continue to follow existing Federal Department of Labor Regulations. These management practices and measurement practices would also be effective for the evaluation of NORM accumulation at the well head and other equipment and would be applicable to detecting NORM affected equipment that require additional management practices as well as equipment that can be released for recycle / reuse and or disposal. Such protocols would limit the need for confirmation laboratory analysis to avoid delays that could impact operations. IOGA is willing to work with the Department to define the basis of the required management practices that is aligned with existing federal regulations and recommendation of the NRCP that would be both protective of human health and cost effective. Each operator should be allowed to specify the screening methodology, screening levels and required testing if a screening level is exceeded as part of their Fluid and/or Cuttings Disposal Plan required pursuant to proposed Section 554.1(c)(1) and (4), as appropriate. This would be similar to the screening methodology that was approved for use at the Chemung County Landfill, which, as noted above, has been operational for several years.

10

A device that is not intrinsically safe is a device that should not be used in a confined space atmosphere.

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PROPOSED PART 750-3 IOGA commends the Department for its efforts to harmonize the water quality regulations with the well permitting regulations. However, as noted above, there are still differences between definitions and there are requirements that are imposed in the water quality regulations that are not required for well permitting. Every effort should be made to harmonize the two regulatory programs and explain any differences that are necessary. In addition, the Department has not responded to IOGA’s comments in the 2012 Comments to simplify the water quality regulations. As currently drafted, this program is difficult to follow as an HVHF SPDES Permit can either be an individual permit or a general permit. Section 750 – 3.2(b)(26). Although we recognize that there may be some drafting efficiencies in allowing the term to be used interchangeably for either an individual permit or a general permit, it creates regulatory confusion. More importantly, once again, the entire program seems to be drafted with the intent of disqualifying operators from obtaining general permits and requiring individual SPDES permits. For example, pursuant to the proposed Section 750-3.11(d), there are number of disqualifiers that disqualify eligibility for a general permit, including distance-based limitations from intermittent streams, wetlands, storm drains and the like. Likewise, pursuant to paragraph (f) of that same regulatory provision, inherently vague standards, such as adverse effect to threatened species or its critical habitat or adverse effect to a property listed or eligible for listing on the National Register of Historic Places can serve as a basis to disqualify an operator from obtaining a general permit. As was explained in the 2012 Comments, activities at well sites, including those that use high-volume hydraulic fracturing for stimulation, are no different from the stormwater standpoint than many other industrial commercial sites which operate under general permits in New York State. Moreover, they are no different from the thousands of well sites that have been constructed in New York under the regulatory auspices of the Division of Minerals or with a general permit, without any documented problem resulting from discharges from the oil and gas industry.11 The entire focus of the regulatory scheme should be changed to presume the general permits will be applicable and only require individual permits in very unique circumstances. Lastly, the Department has failed to comprehend the 2012 Comments, which pointed out that a number of operators design and operate well pads in a manner such that there are no discharges during active phases of drilling and completion. Those operators collect all stormwater and utilize that stormwater as part of water that is used in the drilling or completion process. In other contexts, the Department has recognized that if the site is operated without discharges of stormwater, that no individual SPDES permit or general permit is required. The Revised Proposed Regulations should include an exemption for sites that do not discharge storm water.

11

To be distinguished are the old, orphaned and abandoned sites which were created without regulatory standards and present another set of regulatory challenges that are not relevant to modern day oil and gas drilling.

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o. 750-3.7(o) Groundwater Monitoring Requirement The Revised Proposed Regulations now include a provision authorizing the Department to require groundwater monitoring in relation to either an individual or general SPDES Permit. See § 750-3.6(o), 3.7(o). There is no indication as to when or under what criteria the Department will require groundwater monitoring. IOGA questions this provision, because it lacks any definition concerning the number of groundwater monitoring wells that will be required, the frequency of sampling, the sampling parameters or the amount of baseline data that must be collected prior to drilling. In rare circumstances, groundwater monitoring wells may serve to analyze groundwater conditions after drilling, but the Department should proceed cautiously with groundwater monitoring as a condition to drilling. First, it takes months to establish baseline data from groundwater monitoring. Will this delay drilling? In addition, groundwater monitoring wells could serve as a mechanism to promote methane migration if the wells are not completed properly. Groundwater monitoring wells are not constructed with the precautions that are required in New York State for casing and cementing oil and gas producing wells. Since methane is known to exist in the shallow horizons in a number of places across the Southern Tier, this requirement could exacerbate those conditions. Finally, there was no mention of the costs associated with the imposition of this requirement under the RRIS. As such, this requirement should be deleted from the regulations. Again, since this requirement has not been explained, it is not surprising that the cost of this requirement has not been evaluated. This is yet, again, a further violation of SAPA. p. 750-3.11(f)(4) SPDES General Permit Prohibitions IOGA previously requested deletion of the prohibition from use of the HVHF SPDES general permit where “HVHF operations [ ] adversely affect a property that is listed or eligible for listing on the State or National Register of Historic Places” absent agreements with relevant government agencies to mitigate effects. § 750-3.11(f)(4). With the addition of yet more proposed multiple, independent and redundant safeguards to preclude contamination from leaving the site, IOGA repeats its comment that this prohibition should be deleted, as should the prohibition on use of the HVHF General Permit for HVHF operations that adversely affect a listed or proposed to be listed endangered or threatened species or its critical habitat. § 7503.11(f)(3). Additionally, these prohibitions ignore the temporal nature of HVHF operations. Even including time to construct the well pad, the HVHF process occurs for only a matter of a few months at a given site, after which the impacts from the well producing natural gas are virtually non-existent. The industry has a long history of working with officials at the New York State Office of Parks, Recreation and Historic Preservation siting well pads in a manner to avoid adverse impacts to historic resources. That system should remain in place without creating yet another potential obstacle to drilling in New York State.

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q. 750-3.11(h)(v) Fluid Disposal Plan Requirements Proposed Part 750-3 within the Revised Proposed Regulations contains a requirement to prepare a Fluid Disposal Plan as part of an application for either an individual HVHF SPDES permit, or for use of the HVHF General Permit. See §§ 750-3.6(d), 3.11(h)(v). In addition to the redundancy of this provision, as Section 554.1(c) requires preparation of such a plan, the Revised Proposed Regulations also contain an inconsistency. While Section 554.1(c) states that a contingency plan “may also be required at the department’s discretion,” Part 750-3 requires that an applicant submit a contingency plan. §§ 750-3.6(d), 3.11(h)(v). This discrepancy should be resolved, with the fluid disposal plan being submitted as part of the permitting process and not during the SPDES process and the requirement for submission of a contingency plan being left to the Department’s discretion.

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EXHIBIT A

EXHIBIT A Proposed Modifications to the Revised Proposed Regulations1

PROPOSED REVISIONS TO PARTS 553-560
6 NYCRR Part 553, Well Spacing (Statutory authority: Conservation Law, §§ 70, 73, 75, 77 , Environmental Conservation Law §§ 23-0501, 23-0503 ) Subdivisions (a) through (c) of Section 553.1 are re-lettered subdivision (d) through (f), and new subdivisions (a) through (c) are added to read: (a) 'Statewide spacing' means spacing units for gas or oil wells that are within ten percent of the following sizes, as applicable, unless another percentage is specifically stated: (1) For Medina gas pools at any depth, 40 acres with the wellbore within the target formation no less than 460 feet from any unit boundary, plus, if applicable, the number of additional acres necessary and sufficient to ensure that any horizontal wellbore within the target formation is not less than 460 feet from any unit boundary; (2) For Onondaga reef or Oriskany gas pools at any depth, 160 acres with the wellbore within the target formation no less than 660 feet from any unit boundary, plus, if applicable, the number of additional acres necessary and sufficient to ensure that any horizontal wellbore within the target formation is not less than 660 feet from any unit boundary; (3) For fault-bounded Trenton and/or Black River hydrothermal dolomite gas pools where the majority of the pool is between 4,000 and 8,000 feet deep, 320 acres with the proposed productive section of the wellbore within the target formation no less than one-half mile from any other well in another unit in the same pool and no less than 1,000 feet from any unit boundary that is not defined by a field-bounding fault but in no event less than 660 feet from any unit boundary;

These proposed revisions are not intended to be an exhaustive list of recommendations. IOGA includes these excerpts to illustrate some of the more important revisions that, in IOGA’s view, are necessary to make the Revised Proposed Regulations workable, while also reiterating all of its remarks contained in the formal comments submitted herewith.

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(4) For fault-bounded Trenton and/or Black River hydrothermal dolomite gas pools where the majority of the pool is below 8,000 feet, within five percent of 640 acres with the proposed productive section of the wellbore within the target formation no less than one mile from any other well in another unit in the same pool and no less than 1,500 feet from any unit boundary that is not defined by a field-bounding fault but in no event less than 660 feet from any unit boundary; (5) For shale gas pools at any depth, for a vertical well outside any existing spacing unit for the same formation, 40 acres with the wellbore within the target formation no less than 460 feet from any unit boundary; (6) For shale gas pools at any depth, for a horizontal well outside any existing spacing unit for the same formation and with a written commitment from the well operator to drill infill wells pursuant to subdivision (c) of this section, notwithstanding the ten percent tolerance , up to 640 acres with the initial horizontal wellbore or wellbores within the target formation approximately centered in the spacing unit and no wellbore in the target formation less than 330 feet from any unit boundary; (7) For shale gas pools at any depth, for a horizontal well outside any existing spacing unit for the same formation and in the absence of a written commitment from the well operator to drill infill wells pursuant to subdivision (c) of this section, 40 acres with the wellbore within the target formation no less than 330 feet from any unit boundary plus the number of additional acres necessary and sufficient to ensure that the wellbore within the target formation is not less than 330 feet from any unit boundary; (8) For all other gas pools where the majority of the pool is above the depth of 4,000 feet, 80 acres with the wellbore within the target formation no less than 460 feet from any unit boundary, plus, if applicable, the number of additional acres necessary and sufficient to ensure that any horizontal wellbore within the target formation is not less than 460 feet from any unit boundary; (9) For all other gas pools where the majority of the pool is 4,000 to 6,000 feet deep, 160 acres with the wellbore within the target formation no less than 660 feet from any unit boundary, plus, if applicable, the number of additional acres necessary and sufficient to ensure that any horizontal wellbore within the target formation is not less than 660 feet from any unit boundary; (10) For all other gas pools where the majority of the pool is 6,000 to 8,000 feet deep, 320 acres with the wellbore within the target formation no less than 1,000 feet from any unit boundary, 2

plus, if applicable, the number of additional acres necessary and sufficient to ensure that any horizontal wellbore within the target formation is not less than 1,000 feet from any unit boundary; (11) For all other gas pools where the majority of the pool is below 8,000 feet, within five percent of 640 acres with the wellbore within the target formation no less than 1,500 feet from any unit boundary, plus, if applicable, the number of additional acres necessary and sufficient to ensure that any horizontal wellbore within the target formation is not less than 1,500 feet from any unit boundary; (12) For oil pools in the Bass Island, Trenton, Black River, Onondaga reef or other oil-bearing reefs at any depth, 40 acres with the wellbore within the target formation no less than 460 feet from any unit boundary, plus, if applicable, the number of additional acres necessary and sufficient to ensure that any horizontal wellbore within the target formation is not less than 460 feet from any unit boundary; and (13) For all other oil pools at any depth, the wellbore within the target formation shall be no less than 165 feet from any lease boundary. (b) Wells completed under a well permit issued pursuant to paragraph (12) or (13) of subdivision (a) of this section that do not produce oil may not commence production of natural gas prior to modification of the spacing unit pursuant to section 553.3 of this Part. (c) The department may issue permits to drill infill wells on a reasonably uniform pattern within the spacing unit after an integration order has been issued, if required, and only if it determines that drilling infill wells is necessary to satisfy the policy objectives of Part 550 of this Title. The distances from the unit boundaries set forth in this section shall apply to any infill wells. For purposes of this section, new lateral wellbores drilled from the original wellbore in the unit are not considered infill wells if they are drilled prior to the first product sales from the original surface location. In a spacing unit established pursuant to paragraph (6) of subdivision (a) of this section, infill wells shall be deemed necessary. Newly re-lettered subdivisions (d) and (e) are amended to read: (d) Except as provided in subdivisions [(b) and (c)](a) and (e) of this section and absent a department order establishing spacing units, a well drilled, deepened, plugged back, or converted for the production of oil and gas cannot be located less than 660 feet from any boundary line of

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the lease, integrated leases or unit and cannot be closer than 1,320 feet from any other oil and gas well in the same pool. (e) Absent a department order establishing spacing units, a well which is on a lease, integrated leases, or unit having as one of its boundary lines the New York[] - Pennsylvania border may not be drilled, deepened, plugged back, or converted for the production of oil and gas within 330 feet of that border. A new subdivision (g) is added to Section 553.1 to read: (g) Gas wells drilled, deepened, plugged back or converted in natural gas fields or pools, which were discovered, developed and operated prior to January 1, 1995 and which are not being extended, are not subject to the provisions of subdivision (a) of this section. Section 553.2 is unchanged. Subdivisions (d) and (e) of Section 553.3 are repealed, subdivisions (a) though (c) are relettered subdivisions (c) through (e), and new subdivisions (a) and (b) are added to read: (a) The department shall issue a permit to drill, deepen, plug back or convert a well, if all applicable requirements are met and the proposed spacing unit conforms to statewide spacing provided in section 553.1 of this Part. (b) For wells which meet statewide spacing requirements, issuance of a permit to drill, deepen, plug back or convert a well shall establish the spacing unit for the permitted well. Newly re-lettered subdivisions (c) through (e) of Section 553.3 are amended to read: (c) [To] For wells exempt from statewide spacing requirements or wells that do not meet such statewide spacing requirements as provided in section 553.1 of this Part, an order establishing well spacing may be issued by the department to promote effective development, use or conservation of the natural resources of oil and gas[, an order establishing well spacing may be promulgated by the department]. The Department must find that such proposed spacing unit satisfies the policy objectives established by ECL 23-0301. (1) To make this determination, the Department must issue a notice of intent to issue a permit and spacing order, which shall be published in a form and manner prescribed by the department. The notice of intent to issue a permit and spacing order must include any adjustment of allowables as set forth in subdivision (2) herein. 4

(2)For proposed spacing units that are not of a uniform size and shape with other spacing units for the field or pool, the Department may make such adjustment of the allowable production from the well to be drilled thereon so that the owners in the spacing unit receive their just and equitable shares of the production from the pool. (3)Any comments regarding a notice of intent to issue a permit and spacing order must be received by the department within thirty days of the date of the notice of intent and must meet the substantive and significant requirement for establishing an issue for adjudication. (4) Any challenge to a spacing unit must contain: (i) a description and a map of the proposed alternative spacing unit; (ii) a technical justification of the proposed alternative spacing unit, which shall include a description and analysis of the scientific data intended by the owner to support its proposed spacing unit configuration; and (iii) the name, address and experience of any expert witness proposed to support the proposed alternative spacing unit configuration. (3) The department may request the owner challenging the spacing unit to present its scientific data to the department. (4) Based on the application for a spacing order and any comments received on the notice of intent to issue a permit and spacing order, the department shall determine whether substantive and significant issues have been raised. If the department receives no comments or if the comments do not raise a substantive and significant issue, the department shall issue the permit and the final spacing order. If the department determines that substantive and significant issues have been raised in a timely manner, the department shall schedule an adjudicatory hearing. (d) Prior to [promulgation] issuance of any spacing order, a public hearing on the matter will be conducted by the department acting either on its own [motion] initiative or upon receipt of an application therefore from any interested owner or operator. (e)Any application for a spacing order shall be made in writing and should include any information the applying owner or operator deems relevant to the following factors which the department will consider in deciding upon a spacing order: (1) the lease and unit boundaries of the lands underlaid by the pool; 5

(2) the plan of well spacing currently being employed and that proposed for the pool; (3) the depth at which production from said pool has been found; (4) the nature and character of the stratum containing the pool and the fluids contained therein; (5) an estimate of the maximum area which may be drained efficiently and economically by one well; and (6) any other available information pertaining to said pool which may be of probative value to the department in determining the proper spacing therefore, with due and relative allowance for protection of correlative rights and prevention of waste. A new subdivision (f) is added to Section 553.3 to read: (f) The Department may, upon its own initiative or at the request of the owner or operator, upon good cause shown, modify an order establishing a spacing unit or a spacing unit which conforms to statewide spacing without conducting a hearing if a finding has been made that no facts are in dispute after all affected persons have been provided a reasonable opportunity to comment. For spacing units established pursuant to paragraph (6) of subdivision (a) of section 553.1 of this Part, failure to drill infill wells pursuant to subdivision (c) of section 553.1 of this Part shall constitute good cause for the department to initiate a modification of the spacing unit. Section 553.4 is amended to read: 553.4 [Exceptions] Variances [Where in its opinion there exists good and sufficient reason to permit an exception to the well spacing provision of sections 553.1, 553.2 and 553.3 of this Part, the] (a) The department may permit reasonable well location [exceptions which will] variances to the well spacing provisions of subdivisions (a) (d) and (e) of section 553.1 and sections 553.2 and 553.3 of this Part, in order to protect correlative rights and prevent waste. Any application for such [an exception] a variance shall be made [in writing in triplicate] on a form prescribed by the department, as a separate attachment to the application for permit as outlined in section 552.1 of this Title and shall set forth in ample detail the reason or reasons for such [exception] variance request. Upon receipt of this [exception] variance request, the department shall [promptly schedule a public hearing to facilitate a decision on the application] publish a notice of intent to issue a permit and spacing variance in the environmental notice bulletin and provide for a public comment period of at least 15 days . The owner or operator shall also, in advance of the 15-day public comment 6

period required by this subdivision, provide notice by publication of the request for a variance, in a manner prescribed by the department. When a location [exception] variance is granted, the department may adjust the production from such well or take such other action as it may deem necessary for the protection of correlative rights or to prevent waste. (b) Following the public comment period required by subdivision (a) of this section, the department shall determine whether substantive and significant issues have been raised. If the department receives no comments or if the comments do not raise a substantive and significant issue, the department may issue the variance. If the department determines that substantive and significant issues have been raised in a timely manner, the department shall schedule a hearing to facilitate a decision on the variance application.

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Part 554, Drilling Practices and Reports Subdivisions (a) and (b) of Section 554.1 are unchanged. Paragraph (1) of subdivision (c) of Section 554.1 is amended and a new paragraph (4) is added to read: (1) Prior to the issuance of a [well-drilling] permit [for any operation in which the probability exists that brine, salt water or other polluting fluids will be produced or obtained during drilling operations in sufficient quantities to be deleterious to the surrounding environment,] to drill, deepen, plug back or convert a well, or for any operation reported to the department on the Sundry Well Notice and Report form that requires pre-approval from the department the owner or operator must submit and receive approval for a plan for the environmentally safe and proper ultimate disposition and/or disposal of [such] used drilling mud, flowback water and production brine . [For purposes of this subdivision, drilling muds are not considered to be polluting fluids.] The owner or operator must state that the in its plan is designed to that it will maximize the reuse and/or recycling of used drilling mud, flowback water and production brine to the best, economically-maximum feasible extent feasible. Before [requesting] approving a plan for disposition and/or disposal of such fluids, the department will take into consideration the known geology of the area, the sensitivity of the surrounding environment to [the polluting] such fluids , and the history of any other drilling operations in the area. Depending on the method or methods of disposal chosen by the [applicant] owner or operator , a permit for discharge and/or disposal may be required by the department in addition to the [well-drilling] permit to drill, deepen, plug back or convert a well . An [applicant] owner or operator may also be required at the department's discretion to submit an acceptable contingency plan, the use of which shall be required if the primary plan is unsafe or impracticable at the time of disposition or disposal. (4) [Prior] If applicable, prior to the issuance of a permit to drill, deepen, plug back or convert a well or for any operation noticed to the department on the Sundry Well Notice and Report form that requires pre-approval from the department, the owner or operator must submit and receive approval of a plan for the environmentally safe and proper disposal or beneficial re-use of drill cuttings on-site or off-site.

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Proposed Variance Provision to be Added to Part 560.3: A new paragraph (g) is added to Section 560.3 to read: (g) Variances. (1) Unless otherwise precluded by law, the department may, upon written application from any person who is subject to this Part, grant a variance from one or more specific provisions of this Part under the conditions set forth in this subdivision. (2) Every application for a variance must: (i) identify the specific provisions of this Part from which a variance is sought; (ii) demonstrate that compliance with the identified provisions would, on the basis of conditions unique to the person's particular situation, impose an unreasonable economic, technological or safety burden on the person or the public; and (iii) demonstrate that the proposed activity will have no significant adverse impact on the public health, safety or welfare, the environment or natural resources and will be consistent with the provisions of the ECL and the performance expected from application of this Part. (3) In granting any variance under this subdivision, the department may impose specific conditions necessary to assure that the subject activity will have no significant adverse impact on the public health, safety or welfare, the environment or natural resources.

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560.4 Setbacks (a) No well pad or portion of a well pad may be located: (1) within 500 feet from a residential water well, domestic supply spring or water well or spring used as a water supply for livestock or crops; (2) within 500 feet from an inhabited dwelling or place of assembly; (3) within a primary aquifer and a 500-foot buffer from the boundary of a primary aquifer; (4) within a 100-year floodplain; and (5) within 2,000 feet of any public water supply (municipal or otherwise, or the boundaries of any public water supply reservoir, natural lake or man-made impoundment (except engineered impoundments constructed for fresh water storage associated with fracturing operations) . (b)All distances noted above are measured from the closest edge of the well pad. (c)The department may permit reasonable well location variances to the setback requirements in sections 560.4(a) (1), 560.4(a) (2) and 750-3.3 (a)(61) of this Title. Any such variance to the setback requirement of section 560.4(a) (1) or Section 750-3.3(a)(61) of this Title shall be subject to the written consent of the landowner or landowners whose residential water well, domestic supply spring, or water well or spring used for livestock or crops is located within 500 feet of the proposed well pad. Any variance to the setback requirement of section 560.4(a) (2) of this Part shall be subject to the written consent of the landowner of the inhabited dwelling or place of assembly within 500 feet of a well pad, and, in the case of an inhabited dwelling, the written consent of all tenant(s), if any. The applicant for a variance must show that there are no reasonable allowable alternative locations within the spacing unit where the well pad could be sited consistent with the setback requirements of this section and the well spacing requirements of Part 553 of this Title. In approving a variance, the department shall maximize the separation distance by granting the minimum variance that it deems necessary and adequate. The department shall have the authority to impose such reasonable and necessary conditions to minimize any adverse impact on the water supplies, inhabited dwellings or places of assembly within 500 feet of the well pad.

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560.5(c) Testing, Recordkeeping and Reporting Requirements (c) Any non-routine incident of potential environmental and/or public safety significance during access road and well pad construction, well drilling and stimulation, well production, and well plugging that may affect the health, safety, welfare, or property of any person must be verbally reported to the department within two four hours of the incident's known occurrence or discovery, with a written report detailing the non-routine incident to follow within twenty-four hours of the incident's known occurrence or discovery. Non-routine incidents of potential environmental and/or public safety significance may include, but are not limited to,: casing, drill pipe or hydraulic fracturing equipment failures;, cement failures, ; fishing jobs, ; fires;, seepages, ; blowouts,; surface chemical spills,; observed leaks in surface equipment, observed pit liner failure, surface effects at previously plugged or other wells, observed effects at water wells or at the surface, complaints of water well contamination, anomalous pressure and/or flow conditions indicated or occurring during hydraulic fracturing operations and other incidents during drilling, completion, producing, plugging or replugging operations that may affect the health, safety, welfare or property of any person,., or other potentially polluting non-routine incident or incident that may affect the health, safety, welfare, or property of any person. Provided the environment and public safety would not be further endangered, The first event in a series of related events shall be considered the reportable event. Aany action and/or condition known or suspected of causing and/or contributing to a non-routine incident must cease immediately upon known occurrence or discovery of the incident, and appropriate initial remedial actions commenced. The required written non-routine incident report noted above must provide details of the incident and include, as necessary, a proposed remedial plan for department review and approval. In the case of suspended hydraulic fracturing pumping operations and non-routine incident reporting of such, the owner or operator must receive department approval prior to recommencing hydraulic fracturing activities in the same well. The department may issue an order to take appropriate actions consistent with this subdivision, including an order to cease all activities.

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560.7 Waste Management and Reclamation (a) Fluids must be removed from any on-site pit and the pit reclaimed no later than 45 days after completion of drilling and stimulation operations at the last well on the pad, unless the department grants an extension pursuant to paragraph 554.1(c)(3) of this Title. Flowback water must be removed from on-site tanks within the same time frame. (b) Removed pit fluids including used drilling mud must be disposed, recycled or reused as described in the approved fluid disposal plan submitted pursuant to paragraph 554.1(c)(1) of this Title. Transport off-site of used drilling mud, flowback water and production brine by vehicle must be undertaken by a waste transporter permitted pursuant to Part 364 of this Title. (c) Drill cuttings must be disposed of or reused as described in the approved drill cuttings disposal/beneficial reuse plan submitted pursuant to paragraph 554.1(c)(4) of this Title. Cuttings contaminated with oil-based mud or polymer-based mud containing mineral oil lubricant must be contained and managed in a closed-loop tank system and may not be buried on site, and must be removed from the site for disposal in a solid waste disposal facility. Transport off-site of drill cuttings, except cutting samples collected upon the request of the department or for analytical purposes by the owner or operator, and the pit liner by vehicle must be undertaken by a waste transporter permitted pursuant to Part 364 of this Title. Disposal or on-site burial of cuttings associated with other drilling fluids and any associated pit liner must conform to all applicable department regulations. (d)The pit liner must be ripped and perforated prior to any department-approved burial on-site and to the extent practical, excess pit liner material must be removed and disposed of properly. (e)Permission of the surface owner is required for any department-approved on-site burial of cuttings and pit liner, regardless of type of drilling proposed for use, listed byfluids used. (f) Burial of any other solid waste on-site is specifically prohibited and all such waste must be removed from the site and disposed of properly. (g) A site-specific acid rock drainage mitigation plan must be prepared by the owner or operator, approved by the department and followed for on-site burial of cuttings from any horizontal drilling in the Marcellus if the owner or operator elects to bury these cuttings. The approved plan must be available on-site to a department inspector while activities addressed by the plan are taking place.

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(h) Unless otherwise approved by the department, well pads and access roads constructed for drilling and production operations must be scarified or ripped to alleviate compaction prior to replacement of topsoil. Reclaimed areas must be seeded and mulched after topsoil replacement. Any proposal by the owner or operator to waive these reclamation requirements must be accompanied by documentation of the landowner's consent. (i) Flowback water recovered after high-volume hydraulic fracturing operations must be tested for naturally occurring radioactive material prior to removal from the site. Fluids recovered during the production phase (i.e., production brine) must also be tested for naturally occurring radioactive material prior to removal. Radiological analyses of flowback water and production brine must include analysis for combined radium (Ra-226 and Ra-228) and other analytes as directed by the department. The soils adjacent to the flowback water and production brine tanks must be measured for radioactivity upon removal of the tanks, and at such other times as the department may require. For soil samples, analyses must at a minimum include gamma spectroscopy for all naturally occurring gamma emitters including Ra-226 and Ra-228 (as determined from the presence of their decay products). (j) Production brine is prohibited from being directed to or stored in any on-site pit or freshwater impoundment. Covered watertight steel, fiberglass or plastic tanks, or covered watertight tanks constructed of another material approved by the department, are required for production brine handling and containment on the well pad. Production brine tanks, piping and conveyances, including valves, must be constructed of suitable materials, be of sufficient pressure rating and be maintained in a leak-free condition. (k) Radiation surveys of the well head, piping, and flowback water and production brine tanks must be performed using instrumentation, and on a schedule, prescribed by the department. (l) Partial reclamation and final reclamation of any well pad and access road must be performed in conformance with plans approved by the department.

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PROPOSED REVISIONS TO PART 750-3

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750-3.3 Prohibited Activities and Discharges (a) The prohibitions in this section are in addition to those listed in section 750-1.3 of this Part, unless in conflict, superseded or expressly stated otherwise in this section. Well pads for HVHF operations are prohibited, and no SPDES permit will be issued authorizing any such activity or discharge: (1) within any of setbacks set forth in 6 NYCRR 560.4(a)(1)-(5), provided that, a variance may be obtained from any of these setbacks consistent with the terms of 6 NYCRR 560.4(c). (2) within 4,000 feet of, and including, an unfiltered surface drinking water supply watersheds; and (2) within 500 feet of, and including, a primary aquifer; (3) within 100-year floodplains; (4) within 2,000 feet of any public (municipal or otherwise) drinking water supply well, reservoir, natural lake,man-made impoundment, or spring; and (53) within 2,000 feet around a public (municipal or otherwise) drinking water supply intake in flowing water with an additional prohibition of 1,000 feet on each side of the main flowing waterbody and any upstream tributary to that waterbody for a distance of one mile from the public drinking water supply intake; and (6) within 500 feet of a private water well or domestic use spring, or water supply for crops or livestock, unless the Department has granted a variance from the setback pursuant to subparagraph 560.4(c) of this Title, adopted on XX, 20XX. (b) All distances noted above are measured from the closest edge of the HVHF well pad.

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Proposed Variance Provision to be Added to Part 750-3.5: Section 750-3.5 is amended to read: Exceptions and Variances A new paragraph (f) is added to Section 750-3.5 to read: (f) Variances. (1) Unless otherwise precluded by law, the department may, upon written application from any person who is subject to this Part, grant a variance from one or more specific provisions of this Part under the conditions set forth in this subdivision. (2) Every application for a variance must: (i) identify the specific provisions of this Part from which a variance is sought; (ii) demonstrate that compliance with the identified provisions would, on the basis of conditions unique to the person's particular situation, impose an unreasonable economic, technological or safety burden on the person or the public; and (iii) demonstrate that the proposed activity will have no significant adverse impact on the public health, safety or welfare, the environment or natural resources and will be consistent with the provisions of the ECL and the performance expected from application of this Part. (3) In granting any variance under this subdivision, the department may impose specific conditions necessary to assure that the subject activity will have no significant adverse impact on the public health, safety or welfare, the environment or natural resources.

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750-3.12 Disposal of HVHF wastewater (a) All HVHF wastewater must be treated, recycled, or otherwise properly disposed through the life of the well in accordance with all applicable federal and state laws. (b) The discharge of flowback to the ground is prohibited. The discharge of drilling fluids, formation fluids and production brine to the ground is prohibited, except in accordance with the terms and conditions of a BUD. (c) Requirements for acceptance, treatment, and disposal of HVHF wastewater at a POTW: (1) HVHF wastewater may be accepted only by a POTW that has a valid SPDES permit and a pretreatment program approved by EPA or a mini-pretreatment program approved by the department, and is permitted by the department to accept HVHF wastewater. (2) Prior to being permitted to accept HVHF wastewater, the POTW must perform a headworks analysis for the HVHF wastewater and submit the analysis for review and approval by the department and EPA. The headworks analysis must meet the requirements of 40 CFR Part 403, including a representative assay of the concentrations of chemical constituents present, as well as other parameters that may be present in the HVHF wastewater. The headworks analysis must demonstrate that the HVHF wastewater will not cause a violation of the POTW's effluent limits or sludge disposal criteria, and will not result in pass through of substances present in HVHF wastewater, or adversely affect the POTW's treatment processes. (3) Once the headworks analysis is approved by both the department and EPA, the department shall include in the POTW's SPDES permit, or may modify the POTW's existing SPDES permit to include appropriate monitoring, recording, and reporting requirements, and effluent limitations associated with HVHF wastewater. (4) Any HVHF wastewater to be treated by the POTW must be introduced to the headworks of the POTW, unless otherwise permitted by the department. (5) For each introduction of HVHF wastewater to the headworks of the POTW, the following documentation must be maintained by the POTW: (i) the source well of the HVHF wastewater, including the identity of the HVHF well owner or operator;

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(ii) a list of chemical constituents used in HVHF, along with a representative assay of the concentrations of chemical constituents present, as well as other parameters that may be present; and (iii) the volume of wastewater to be accepted by the POTW. (6) Prior to being permitted to accept HVHF wastewater the POTW must demonstrate that it has an approved method for transport and disposal of residuals in compliance with Parts 360, 364, 380 and 381 and subdivision 750-2.8(e) of this Part. (7) All POTWs shall provide adequate notice to the Department and to EPA of the following: (i) Any new introduction of pollutants to the POTW from an indirect discharger that would be subject to section 301 or 306 of the CWA if it were directly discharging those pollutants; (ii) Any substantial changes in the volume or character of pollutants being introduced into that POTW by a source introducing pollutants into the POTW at the time of issuance of the permit (iii) For the purposes of this paragraph, adequate notice shall include information on: (a) the quality and quantity of effluent introduced into the POTW; and (b) any anticipated impact of the change on the quantity or quality of effluent to be discharged from the POTW. (d) Requirements for offsite acceptance, treatment, recycling, and disposal of HVHF wastewater at a privately owned industrial wastewater treatment facility: (1) HVHF wastewater may be accepted only by a facility that has a valid SPDES permit and is permitted by the department to accept HVHF wastewater. (2) Prior to being permitted to accept HVHF wastewater, the facility must complete an approvable treatability analysis for the HVHF wastewater. The treatability analysis must demonstrate that the HVHF wastewater will not cause a violation of the facility's effluent limits or sludge disposal criteria, and will not result in pass through of substances present in HVHF wastewater, or adversely affect the facility's treatment processes. The treatability analysis must include the following: (i) each source of HVHF wastewater to be accepted and the identity of each HVHF well owner or operator;

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(ii) the total volume of HVHF wastewater to be accepted by the facility from each source of HVHF wastewater, and the proposed rate of introduction into the facility; (iii) for each identified source of HVHF wastewater, a representative assay of the concentrations of chemical constituents present, as well as other parameters that may be present in the HVHF wastewater; (iv) the expected effluent concentrations of all chemical constituents present, as well as other parameters that may be present in the HVHF wastewater; and (v) the volume of treated HVHF wastewater to be discharged as effluent and the volume of treated HVHF wastewater to be generated for reuse. (3) Once the treatability analysis is approved by the department, the department shall include in the facility's SPDES permit, or may modify the facility's existing SPDES permit to include, appropriate monitoring, recording and reporting requirements, and effluent limitations associated with HVHF wastewater. (4) Any HVHF wastewater to be treated by the facility must be introduced to the headworks of the facility, unless otherwise permitted by the department. (5) For each introduction of HVHF wastewater to the headworks of the facility, the following documentation must be maintained by the facility: (i) the source well of the HVHF wastewater, including the identity of the HVHF well owner or operator; (ii) a list of all chemical constituents used in HVHF, along with a copy of the representative assay required in subparagraph (2) (iii) above; and (iii) the volume of wastewater to be accepted by the facility. (6) Prior to being permitted to accept HVHF wastewater, the facility must also demonstrate that it has an approved method for transport and disposal of residuals in compliance with Parts 360, 364, 380 and 381 and subdivision 750-2.8(e) of this Part. (e) Requirements for onsite treatment and recycling of HVHF wastewater: (1) Facilities constructed specifically for the onsite treatment of HVHF wastewater are prohibited from directly discharging to the waters of the State pursuant to 40 CFR Part 435. These onsite facilities are not eligible to obtain a SPDES permit. All HVHF wastewater accepted and treated 19

by these onsite facilities must be either reused, as approved by the department, or transported for offsite disposal at a permitted facility. (2) Prior to acceptance of any HVHF wastewater , the onsite facility must demonstrate to the department that it has an approved method of disposal of residuals in compliance with Parts 360, 364, 380, and 381 of this Title and subdivision 750-2.8(e) of this Part. (f) Requirements for deep well injection of HVHF wastewater: (1) HVHF wastewater may be accepted only by a deep well injection facility that has a valid SPDES permit and is permitted by the department to accept HVHF wastewater. (2) The owner or operator of the disposal well must obtain a permit, or a modification to an existing permit, under the EPA Underground Injection Control (UIC) program for disposal wells prior to applying for a SPDES permit, or a modification to an existing SPDES permit, in accordance with this subpart and subpart 750-1. (3) The SPDES permit application for a new deep well injection facility or modification of an existing deep well injection facility SPDES permit to accept HVHF wastewater must include the following: (i) each source of HVHF wastewater and the identity of each HVHF well owner or operator; (ii) the total volume of HVHF wastewater from each source of HVHF wastewater, and the proposed rate of introduction into the disposal well; (iii) for each identified source of HVHF wastewater, a representative assay of the concentrations of chemical constituents present, as well as other parameters that may be present in the HVHF wastewater; (iv) geotechnical information regarding the ability of the disposal stratum to accept and retain the injected fluid, including an estimate of available capacity; (v) a water quality analysis of the receiving stratum for chemical constituents present, as well as other parameters that may be present in the HVHF wastewater; and (vi) injection well construction and operational control information showing that the well meets the applicable EPA UIC injection well standards as promulgated under 40 CFR Parts 144-148 and sections 1423 and 1425 of the Safe Drinking Water Act.

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(4) The SPDES permit application for an existing deep well injection facility that has already been approved to accept HVHF wastewater, but wishes to accept another source of HVHF wastewater must include the items listed in paragraph 750-3.12 (f)(3). (5) In addition to the requirements of the EPA UIC program, the department may propose appropriate monitoring, recording and reporting requirements and effluent limitations in the SPDES permit, including: (i) effluent limitations, pursuant to Parts 701-706 of this Title for chemical constituents present, as well as other parameters that may be present in the HVHF wastewater; (ii) the proposed well construction and operation program; and (iii) installation of upgradient and downgradient monitoring wells and a monitoring program with periodic monitoring for chemical constituents present, as well as other parameters that may be present in the HVHF wastewater. (g) (1) In the event the department or any governmental agency administering the relevant POTW, privately owned industrial wastewater treatment facility, and/or deep well injection facility is required by this Part or other governing law to disclose to the public the information submitted pursuant to paragraphs 750-3.12(c)(2), (c)(5), (c)(7), (d)(2), (d)(5), (f)(3) and/or (f)(4) of this subdivision, owner or operators or other persons who supply information subject to paragraphs 750-3.12(c)(2), (c)(5), (c) (7), (d)(2), (d)(5), (f)(3) and/or (f)(4) of this subdivision may request such records to be exempt from disclosure as trade secret as provided by Part 616 of this Title. (3)To the extent that information considered trade secret has already been submitted to the department and/or any other governmental agency holding records in relation to paragraphs 7503.12(c)(2), (c)(5), (c)(7), (d)(2), (d)(5), (f)(3) and/or (f)(4) of this subdivision, whether in connection with a prior application made pursuant to 6 NYCRR Part 560, this Part, or otherwise, the prior submission may be referenced in the information submitted pursuant to paragraphs 7503.12(c)(2), (c)(5), (c)(7), (d)(2), (d)(5), (f)(3) and/or (f)(4) of this subdivision, in lieu of submitting duplicative trade secret information.

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EXHIBIT B

The following is a list of all the regulatory variance provisions the Department has enacted for the numerous programs it administers. Each provision allows applicants to vary or modify the requirements under the governing regulations. 6 NYCRR 225-1.4-Exceptions Contingent Upon Fuel Shortage (Air Resources- Fuel Composition & Use-Sulfur Limitations) (a) Upon application by an air contamination source owner or a fuel supplier, or upon his own initiative, the commissioner may issue an order granting a temporary variance from the provisions of this Subpart where it can be shown, to the commissioner's satisfaction, that there is an insufficient supply of conforming fuel, either: (1) of the proper type required for use in a particular air contamination source; or (2) generally throughout an area of the State. (b) The Commissioner of the State Energy Office must certify that there exists an insufficient supply of fuel which conforms to the standards in this Subpart before a sulfur-in-fuel variance may be granted under this subdivision. (c) The commissioner may grant a sulfur-in-fuel variance contingent upon a fuel shortage for a period not longer than 45 days. (d) The commissioner may grant a sulfur-in-fuel variance contingent upon a fuel shortage for a period longer than 45 days but not longer than one year only after a public hearing is held to gather information relevant to such a variance. The applicant for the variance must publish notice of such hearings, in a form acceptable to the commissioner, in a newspaper of general circulation in the area for which the variance is sought. The applicant will bear the cost of publication of the notice, of the hearing transcript, and for rental of space in which the hearing is conducted. (e) An economic adjustment fee must be deposited with the commissioner before a variance will be granted. The economic adjustment fee is computed by multiplying the cost per unit of conforming fuel, less the cost per unit of nonconforming fuel, by the quantity of nonconforming fuel allowed to be supplied by the variance. 6 NYCRR 225-1.5-General Variances (Air Resources-Fuel Composition & Use- Sulfur Limitations) (7) The owner or operator may obtain a variance from the requirements of this subdivision if the commissioner finds, as a result of a demonstration by the owner or operator, either: that alternative design and operating practices together with location characteristics will prevent the migration of hazardous waste or hazardous constituents into the ground water or surface water at least as effectively as secondary containment during the active life of the tank system; or that in the event of a release that does migrate to ground water or surface water, no substantial present or potential hazard will be posed to human health or the environment. New underground tank systems may not, per a demonstration in accordance with subparagraph (ii) of this paragraph, be exempted from the secondary containment requirements of this subdivision. Application for a variance as allowed in this paragraph does not waive compliance with the requirements of this section for new tank systems. (i) In deciding whether to grant a variance based on a demonstration of equivalent protection of ground water and surface water, the commissioner will consider: (a) the nature and quantity of the waste; (b) the proposed alternate design and operation; 1

(c) the hydrogeologic setting of the facility, including the thickness of soils between the tank system and ground water; and (d) all other factors that would influence the quality and mobility of the hazardous constituents and the potential for them to migrate to ground water or surface water. (ii) In deciding whether to grant a variance, based on a demonstration of no substantial present or potential hazard, the commissioner will consider: (a) the potential adverse effects on ground water, surface water, and land quality taking into account: (1) the physical and chemical characteristics of the waste in the tank system, including its potential for migration; (2) the hydrogeological characteristics of the facility and surrounding land; (3) the potential for health risks caused by human exposure to waste constituents; (4) the potential for damage to wildlife, crops, vegetation, and physical structures caused by exposure to waste constituents; and (5) the persistence and permanence of the potential adverse effects; (b) the potential adverse effects of a release on ground water quality, taking into account: (1) the quantity and quality of ground water and the direction of ground water flow; (2) the proximity and withdrawal rates of water in the area; (3) the current and future uses of ground water in the area; and (4) the existing quality of ground water, including other sources of contamination and their cumulative impact on the ground water quality; (c) the potential adverse effects of a release on surface water quality, taking into account: (1) the quantity and quality of ground water and the direction of ground water flow; (2) the patterns of rainfall in the region; (3) the proximity of the tank system to surface waters; (4) the current and future uses of surface waters in the area and any water quality standards established for those surface waters; and (5) the existing quality of surface water, including other sources of contamination and the cumulative impact on surface water quality; and (d) the potential adverse effects of a release on the land surrounding the tank system, taking into account: (1) the patterns of rainfall in the region; and (2) the current and future uses of the surrounding land. (iii) The owner or operator of a tank system, for which a variance from secondary containment had been granted in accordance with the requirements of subparagraph (i) of this paragraph, at which a release of hazardous waste has occurred from the primary tank system but has not migrated beyond the zone of engineering control (as established in the variance), must:

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(a) comply with the requirements of subdivision (g) of this section, except paragraph (4); and (b) decontaminate or remove contaminated soil to the extent necessary to: (1) enable the tank system, for which the variance was granted, to resume operation with the capability for the detection of and response to releases at least equivalent to the capability it had prior to the release; and (2) prevent the migration of hazardous waste or hazardous constituents to ground water or surface water; and (c) if contaminated soil cannot be removed or decontaminated in accordance with clause (b) of this subparagraph, comply with the requirements of paragraph (h)(2) of this section. (iv) The owner or operator of a tank system, for which a variance from secondary containment had been granted in accordance with the requirements of subparagraph (i) of this paragraph, at which a release of hazardous waste has occurred from the primary tank system and has migrated beyond the zone of engineering control (as established in the variance), must: (a) comply with the requirements of paragraphs (g)(1)-(4) of this section; (b) prevent the migration of hazardous waste or hazardous constituents to ground water or surface water, if possible, and decontaminate or remove contaminated soil. If contaminated soil cannot be decontaminated or removed, or if ground water has been contaminated, the owner or operator must comply with the requirements of paragraph (h)(2) of this section; and (c) provide secondary containment in accordance with the requirements of paragraphs (1)-(6) of this subdivision if repairing, replacing, or reinstalling the tank system, or reapply for a variance from secondary containment and meet the requirements for new tank systems in subdivision (c) of this section if the tank system is replaced. The owner or operator must comply with these requirements even if contaminated soil can be decontaminated or removed, and ground water or surface water has not been contaminated. (8) The following procedures must be followed in order to request a variance from secondary containment. (i) The commissioner must be notified in writing by the owner or operator that the owner or operator intends to conduct and submit a demonstration for a variance from secondary containment as allowed in paragraph (7) of this subdivision according to the following schedule: (a) for existing tank systems, at least 24 months prior to the date that secondary containment must be provided in accordance with paragraph (1) of this subdivision; and (b) for new tank systems, at least 30 days prior to entering into a contract for installation of the tank system. (ii) As part of the notification, the owner or operator must also submit to the commissioner a description of the steps necessary to conduct the demonstration and a timetable for completing each of the steps. The demonstration must address each of the factors listed in subparagraph (7)(i) or (ii) of this subdivision.

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(iii) The demonstration for a variance must be completed and submitted to the commissioner within 180 days after notifying the commissioner of intent to conduct the demonstration. 6 NYCRR 225-3.5-Exceptions & Variances-Volatility (Air Resources-Fuel Composition & Use-gasoline) (b) Effective September 16, 1989, upon application, the commissioner, after consultation with the President of the New York State Energy Research and Development Authority, may grant a temporary variance from the requirements of section 225-3.3 of this Subpart if the applicant for such an exception can demonstrate to the commissioner that quantities of gasoline sufficient to meet the demand in New York State cannot be manufactured in time to meet all the requirements of section 225-3.3 of this Subpart. (1) The President of the New York State Energy Research and Development Authority, must certify that there exists an insufficient supply of fuel which conforms to the standards in section 225-3.3 of this Subpart before a temporary variance may be granted under this subdivision. (2) The commissioner shall impose an interim volatility standard and/or restrictions on the quantity of gasoline permitted to be supplied as conditions of a variance granted pursuant to this subdivision. (3) The commissioner shall require that an economic adjustment fee must be deposited with the commissioner before a temporary variance will be granted. The economic adjustment fee shall equal the economic benefit that may accrue because of the lower cost of gasoline that does not comply with section 225-3.3 of this Subpart, in comparison with gasoline that does. 6 NYCRR 230.8-Variances (Air Resources-Gasoline Dispensing Sites & Transport Vehicles) Where it can be shown to the satisfaction of the commissioner that a gasoline dispensing site or gasoline transport vehicle cannot comply with the requirements of this Part for reasons of technological or economic feasibility, the commissioner may, upon submission of satisfactory evidence, grant to the source owner or operator a variance from the requirements of this Part and accept a lesser degree of control or an alternate compliance schedule. 6 NYCRR 231-7.4-General Requirements (Air Resources- New Major Facilities and Modifications to Existing Non-Major Facilities in Attainment Areas (Prevention of Significant Deterioration) (5) Federal class I variances. The owner or operator of a proposed new or modified facility may demonstrate to the Federal land manager that the emissions from the new or modified facility would have no adverse impact on the air quality related values (including visibility) of any such lands, notwithstanding that the change in air quality resulting from emissions from the new or modified facility would cause or contribute to concentrations which would exceed the maximum allowable increases for a Federal class I area. If the Federal land manager concurs with such demonstration and so certifies, provided that the applicable requirements of this section are otherwise met, the State may issue the permit with such emission limitations as may be necessary to assure that emissions of SO2, PM, and NOx would not exceed the

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maximum allowable increases over minor source baseline concentration as listed in table 7 of Subpart 231-13 of this Part. (6) SO2 variance by Governor of the Federal class I area with Federal land manager's concurrence. The owner or operator of a proposed new or modified facility which cannot be approved under paragraph (4) of this subdivision may demonstrate to the governor of the Federal class I area that the new or modified facility cannot be constructed by reason of any maximum allowable increase for SO2 for a period of 24 hours or less applicable to any Federal class I area, and that a variance under this clause would not adversely affect the air quality related values of the area (including visibility). The governor of the Federal class I area, after consideration of the Federal land manager's recommendation (if any) and subject to his concurrence, may, after notice and public hearing, grant a variance from such maximum allowable increase. If such variance is granted, the department will issue a permit to the new or modified facility, provided that the applicable requirements of this Subpart are otherwise met. In this instance, the SO2 concentrations must meet the maximum allowable increase in SO2 concentrations in table 8 of Subpart 231-13 of this Part. 6 NYCRR 231-8.5 – General Requirements (Air Resources-Modifications to Existing Major Facilities in Attainment Areas (Prevention of Significant Deterioration) (5) Federal Class I variances. The owner or operator of a proposed new or modified facility may demonstrate to the Federal land manager that the emissions from the new or modified facility would have no adverse impact on the air quality related values (including visibility) of any such lands, notwithstanding that the change in air quality resulting from emissions from the new or modified facility would cause or contribute to concentrations which would exceed the maximum allowable increases for a Federal Class I area. If the Federal land manager concurs with such demonstration and so certifies, provided that the applicable requirements of this section are otherwise met, the State may issue the permit with such emission limitations as may be necessary to assure that emissions of SO2, PM, and NOx would not exceed the maximum allowable increases over minor source baseline concentration as listed in Table 7 of Subpart 231-13 of this Part. (6) SO2 variance by Governor of the Federal Class I area with Federal land manager's concurrence. The owner or operator of a proposed new or modified facility which cannot be approved under Paragraph 231-8.5(f)(4) of this Subdivision may demonstrate to the Governor of the Federal Class I area that the new or modified facility cannot be constructed by reason of any maximum allowable increase for SO2 for a period of 24 hours or less applicable to any Federal Class I area, and that a variance under this Clause would not adversely affect the air quality related values of the area (including visibility). The Governor of the Federal Class I area, after consideration of the Federal land manager's recommendation (if any) and subject to his concurrence, may, after notice and public hearing, grant a variance from such maximum allowable increase. If such variance is granted, the department will issue a permit to the new or modified facility, provided that the applicable requirements of this Subpart are otherwise met.

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6 NYCRR 232.3- Variances (Air Resources-Perchloroethylene Dry Cleaning Facilties) (a) Unless otherwise precluded by federal statute, or subdivision (d) of this section, the Department may, upon written application from any person who is subject to this Part, grant a variance from one or more specific provisions of this Part under the conditions set forth in this section. However, it should be noted that variances will only be granted under exceptional or extraordinary circumstances. (b) Every application for a variance must: (1) identify the specific provisions of this Part from which a variance is sought; (2) demonstrate that compliance with the identified provisions would, on the basis of conditions unique to the person's particular situation in contrast to the rest of the industry or any segment thereof, tend to impose an unreasonable economic, technological, or safety burden on the person or the public; and (3) demonstrate that the proposed activity will have no significant adverse impact on the public health, safety, or welfare, the environment or natural resources and will be consistent with the provisions of the Environmental Conservation Law (ECL) and the performance expected from an activity permitted under the provisions of this Part. 6 NYCRR 235-8.1-Variances (Air Resources-Consumer Products) (a) Any person who cannot comply with the requirements set forth in Subpart 235-3 of this Part, because of extraordinary reasons beyond the person's reasonable control may apply in writing to the director, Division of Air Resources, Department of Environmental Conservation for a variance. When approved by the director, Division of Air Resources, Department of Environmental Conservation, the variance will be submitted to the United States Environmental Protection Agency as a State Implementation Plan revision for approval. The variance application shall set forth: (1) the specific grounds upon which the variance is sought; (2) the proposed date(s) by which compliance with the provisions of Subpart 235-3 of this Part will be achieved; and (3) a compliance report reasonably detailing the method(s) by which compliance will be achieved. (b) No variance shall be granted unless all of the following findings are made: (1) that, because of reasons beyond the reasonable control of the applicant, requiring compliance with Subpart 235-3 of this Part would result in extraordinary economic hardship; (2) that the public interest in mitigating the extraordinary hardship to the applicant by issuing the variance outweighs the public interest in avoiding any increased emissions of air contaminants which would result from issuing the variance; and (3) that the compliance report proposed by the applicant can reasonably be implemented, and will achieve compliance as expeditiously as possible. 6 NYCRR 239-7.1 Variances (Air Resources – Portable Fuel Container Spillage Control) (a) Any person or manufacturer who cannot comply with the requirements set forth in Subpart 239-3 of this Part, due to extraordinary reasons beyond the person's reasonable control, may apply in writing to the department for a variance. The variance application must set forth: (1) the specific grounds upon which the variance is sought;

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(2) the proposed date(s) by which compliance with the provisions of Subpart 239-3 of this Part will be achieved; and (3) a compliance report detailing the method(s) by which compliance will be achieved. (b) No variance may be granted unless all of the following findings are made: (1) that, due to reasons beyond the reasonable control of the applicant, required compliance with Subpart 239-3 of this Part would result in extraordinary economic hardship; (2) that the public interest in mitigating the extraordinary hardship to the applicant by issuing the variance outweighs the public interest in avoiding any increased emissions of air contaminants that would result from issuing the variance; and (3) that the compliance report proposed by the applicant can reasonably be implemented, and will achieve compliance as expeditiously as possible. 6 NYCRR 360-1.7-Permit Requirements, Exemptions & Variances (Quality ServicesGeneral Provisions) (c) Variances. (1) Unless otherwise precluded by law, the department may, upon written application from any person who is subject to this Part, grant a variance from one or more specific provisions of this Part under the conditions set forth in this subdivision. In any event, no variance will be granted which would authorize a municipal solid waste landfill to be designed, constructed or operated at standards less stringent then those defined under 40 CFR part 258, Criteria For Municipal Solid Waste Landfills. (2) Every application for a variance must: (i) identify the specific provisions of this Part from which a variance is sought; (ii) demonstrate that compliance with the identified provisions would, on the basis of conditions unique to the person's particular situation, and to impose an unreasonable economic, technological or safety burden on the person or the public; and (iii) demonstrate that the proposed activity will have no significant adverse impact on the public health, safety or welfare, the environment or natural resources and will be consistent with the provisions of the ECL and the performance expected from application of this Part. (3) In granting any variance under this subdivision, the department will impose specific conditions necessary to assure that the subject activity will have no significant adverse impact on the public health, safety or welfare, the environment or natural resources. 6NYCRR 361.1-General (Quality Services-Siting of Industrial Hazardous Waste Facilities) (e) Variances. (1) Upon written application from any person who is subject to this Part, the department and, after constituting of a board, the board, may grant a variance from one or more specific provisions of this Part, consistent with this subdivision. (2) Any application for a variance hereunder must: (i) identify the specific provisions of this Part from which a variance is sought; (ii) demonstrate that compliance with the identified provisions would, on the basis of conditions unique and peculiar to the applicant's particular situation, tend to

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impose a substantial financial, technological, or safety burden on the applicant or the public; and (iii) demonstrate that the proposed activity will have no significant adverse impact on the health, safety, welfare, natural resources, or environment of the People of the State and will be consistent with the provisions of the ECL, the purpose of these rules and regulations, and the performance expected from application of these rules and regulations. 6 NYCRR 364-1(e)(4) General (Quality Services-Waste Transporter Permits) (4) The department may, upon written application from a transporter who is subject to this Part, grant approval for exemption of vehicles owned and operated by the transporter from specified permit requirements of this Part. Any such transporter is still subject to the requirements of subparagraph (ii) of this paragraph and other conditions which the department may impose on the granting of such approval, which are reasonably necessary to effectuate the purposes of this Part. (i) Any application for such an exemption must demonstrate: (a) That compliance with the specified permit requirement provisions would create a hardship on the applicant's business activities; (b) The transporter owns and operates a minimum of 500 vehicles which operate in interstate commerce; (c) The applicant does not have any vehicles specifically designated for the transport of regulated waste and that such designation would create a hardship; (d) The transport of regulated waste accounts for no greater than one percent of the applicant's total annual cargo; and (e) The transport of regulated waste is over irregular routes on a non-regularly scheduled call-on-demand basis. (ii) An exemption pursuant to this paragraph is subject to the following terms and conditions: (a) The transporter shall comply with all applicable manifest requirements under Part 372 of this title; (b) A copy of the department's approval for exemption shall be carried in all vehicles transporting regulated waste in this state; (c) A waste transporter annual report shall be submitted to the department on forms issued or approved by the department; (d) Vehicles used for transporting regulated waste shall not be used for transporting any food for human consumption or animal feed or any articles destined for sale to the general public whose use normally involves physical contact with humans (e.g., clothing). This prohibition shall not apply if the vehicle has been properly cleaned in accordance with all applicable federal and state regulations governing decontamination or other methods approved by the department; and (e) Other requirements specified by the Commissioner. (iii) The exemption shall be valid for the specific time period as indicated in the exemption letter and under no circumstances for longer than one year. Any exemption granted hereunder may be revoked for any violation of the terms of such exemption or for a violation of any other applicable rules and regulations of the department related to the 8

transportation of regulated waste, or upon a showing that the transporter no longer meets the requirements for exemption. Such revocation will be subject to the procedures specified in the Uniform Procedures Act and Part 621 of this Title. 6 NYCRR 364.1(g)-General (Quality Services- Waste Transporter Permits) (g) Variances. (1) The department may, upon written application from any person who is subject to this Part, grant a variance from one or more specific provisions of this Part, consistent with this subdivision. (2) Any application for a variance hereunder must: (i) identify the specific provisions of this Part from which a variance is sought; (ii) demonstrate that compliance with the identified provisions would, on the basis of conditions unique and peculiar to the applicant's particular situation, impose a substantial financial, technological or safety burden on the applicant or the public; and (iii) demonstrate that the proposed activity will have no significant adverse impact on public health, safety or welfare, the environment or natural resources, and will be consistent with the provisions of the ECL, the purpose of this Part and the performance expected from applications of this Part. (3) In granting any variance hereunder, the department may impose specific conditions reasonably necessary to assure that the subject activity will have no significant adverse impact on public health, safety or welfare, the environment or natural resources. 6 NYCRR 370.3-Variances (Quality Services- Hazardous Waste Management System: General) (a) General. (1) Any person may petition the commissioner to use an equivalent testing or analytical method, to exclude a waste produced at a particular facility from the requirements of Part 370 through 374, and 376 of this Title, to be granted a variance from classification as a solid waste or to be granted a variance to be classified as a boiler. This subdivision sets forth general requirements which apply to these petitions. Subdivision (b) of this section sets forth additional requirements for petitions to use a testing or analytical method that varies from the methods specified in Part 371 and Subparts 373-2 and 373-3 of this Title. Subdivision (c) of this section sets forth additional requirements for petitions to exclude a waste at a particular facility from subdivision 371.1(d) and section 371.4 of this Title. Subdivisions (d) and (e) of this section set forth additional requirements for petitions to be granted a variance from classification as a solid waste under subdivision 371.1(c) of this Title. Subdivision (f) of this section sets forth additional requirements for petitions to be granted a variance to be classified as a boiler. (2) Each petition must be submitted to the commissioner and must include: (i) the petitioner's name and address; (ii) a statement of the petitioner's interest in the proposed action; (iii) a description of the proposed action; (iv) a statement of the need and justification of the proposed action, including any supporting tests, studies, or other information; and

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(v) the following statement signed by the petitioner or an authorized representative: “I certify under penalty of law that I have personally examined and am familiar with the information submitted in this demonstration and all attached documents, and that, based on my inquiry of those individuals immediately responsible for obtaining the information, I believe that the submitted information is true, accurate, and complete. I am aware that submitting false information is punishable under 210.45 of the State Penal Law, including the possibility of fine and imprisonment.“ (3) The commissioner will determine if sufficient information has been submitted in order to grant or deny a petition. (i) If the commissioner determines that sufficient information has been submitted, a tentative decision will be made to grant or deny a petition. A notice of such tentative decision will be published by the department in the Environmental Notice Bulletin for written public comment. In the case of a petition under subdivisions (d) and (f) of this section, notification of this tentative decision will also be provided by newspaper advertisement and radio broadcast in the locality where the petitioner's facility is located. The public will be provided a minimum comment period of thirty days. (ii) If the commissioner determines that additional information is needed, the commissioner will notify the petitioner in writing of the needed information. (4) Upon the written request of any interested person, the commissioner may then hold a legislative public hearing to consider oral comments on the tentative decision. A person requesting a hearing must state the issues to be raised and explain why written comments would not suffice to communicate the person's views. The commissioner may in any case decide to initiate a motion to hold a legislative public hearing. (5) After evaluating all public comments, the commissioner will make a final decision and shall publish notice of the decision in the Environmental Notice Bulletin. (b) Petitions for equivalent testing or analytical methods. (1) Any person seeking to add a testing or analytical method to Part 371, Subpart 373-2, or Subpart 373-3 of this Title must first petition the EPA Administrator for a regulatory amendment under 40 CFR 260.21 and 40 CFR 260.20, as incorporated by reference in subdivision 370.1(e) of this Part. Upon approval by the EPA Administrator, the petitioner must then demonstrate to the commissioner that the proposed method is equal to or superior to the corresponding method prescribed in Part 371 and Subparts 373-2 and 3733 of this Title, in terms of its sensitivity, accuracy and precision (i.e., reproducibility). (2) Each petition must include, in addition to the information required by paragraph (a)(2) of this section: (i) a full description of the proposed method, including all steps and equipment used in the method; (ii) a description of the types of wastes or waste matrices for which the proposed method may be used; (iii) comparative results obtained from using the relevant or corresponding methods prescribed in Part 371 and Subparts 373-2 and 373-3 of this Title; (iv) an assessment of any factors which may interfere with or limit the use of the proposed method; and 10

(v) a description of the quality control procedures necessary to ensure the sensitivity, accuracy and precision of the proposed method. (c) Petitions to exclude a waste produced at a particular facility. (1) Any person seeking to exclude a waste from the lists in section 371.4 of this Title at a particular generating facility must first petition the EPA Administrator for a regulatory amendment under 40 CFR 260.22 and 40 CFR 260.20, as incorporated by reference in subdivision 370.1(e) of this Part. Upon approval by the EPA Administrator, the petitioner may then seek concurrence from the commissioner under this subdivision and subdivision (a) of this section. To be successful: (i) The Petitioner must demonstrate to the commissioner that the waste produced by a particular generating facility does not meet any of the criteria under which the waste was listed as a hazardous or an acutely hazardous waste; and (ii) based on a complete petition, the commissioner must determine, where there is a reasonable basis to believe that factors (including additional constituents) other than those for which the waste was listed could cause the waste to be a hazardous waste, that such factors do not warrant retaining the waste as a hazardous waste. A waste which is so excluded, however, is a hazardous waste if it fails one of the characteristic tests of section 371.3 of this Title. (2) The procedures in this subdivision and subdivision (a) of this section may also be used to petition the commissioner for an exclusion from section 371.1(d)(1)(ii)(b) and (d)(3) of this Title, a waste which is described in those sections and is either a waste listed in section 371.4, or is derived from a waste listed in section 371.4. This exclusion may only be used for a particular generating storage, treatment, or disposal facility. The petitioner must make the same demonstration as required by paragraph (1) of this subdivision. Where the waste is a mixture of solid waste and one or more listed hazardous wastes or is derived from one or more hazardous wastes, the petitioner's demonstration may be made with respect to the waste mixture as a whole; analysis must be conducted for not only those constituents for which the waste contained in the mixture was listed as hazardous, but also for factors (including additional constituents) that could cause the waste mixture to be a hazardous waste. A waste which is so excluded is still a hazardous waste if it exhibits any of the characteristics identified in section 371.3 of this Title. (3) If the waste is listed with codes “I“, “C“, “R“, or “E“ in section 371.4 of this Title: (i) the petitioner must show that the waste does not exhibit the relevant characteristic for which the waste was listed as defined in section 371.3(b),(c),(d), or (e) of this Title using any applicable methods prescribed therein. The petitioner also must show that the wastes does not exhibit any of the other characteristics defined in section 371.3(b), (c), (d), or (e)of this Title using any applicable methods prescribed therein; and (ii) based on a complete petition, the commissioner must determine, where there is a reasonable basis to believe that factors (including additional constituents) other than those for which the waste was listed could cause the waste to be a hazardous waste, that such factors do not warrant retaining the waste as a hazardous waste. A waste which is so excluded, however, is a hazardous waste if it fails one of the characteristic tests of section 371.3 of this Title. (4) If the waste is listed with code “T“ in section 371.4 of this Title: 11

(i)(a) the petitioner must demonstrate that the waste does not contain the constituent or constituents (as defined in Appendix 22 of this Title) that caused the commissioner to list the waste, using the appropriate test methods prescribed in “Test Methods for Evaluating Solid Waste, Physical/Chemical Methods,“ EPA Publication SW-846, as incorporated by reference in subdivision 370.1(e) of this Part; or (b) the waste, although containing one or more of the hazardous constituents (as defined in Appendix 22 of this Title) that caused the commissioner to list the waste, does not meet the criterion of section 371.2(b)(1)(iii) of this Title when considering the factors in clauses (a) through (k) of such section under which the waste was listed as hazardous; and (ii) the petitioner must demonstrate that the waste does not exhibit any of the characteristics defined in section 371.3(b),(c),(d), and (e) of this Title using any applicable method prescribed therein; (iii) based on a complete petition, the commissioner must determine, where there is reasonable basis to believe that factors (including additional constituents) other than those for which the waste was listed could cause the waste to be a hazardous waste, that such factors do not warrant retaining the waste as a hazardous waste; and (iv) a waste which is so excluded, however, is a hazardous waste if it fails one of the characteristic tests of section 371.3 of this Title. (5) If the waste is listed with the code “H“ in section 371.4 of this Title: (i) (a) the petitioner must demonstrate that the waste does not meet the criterion for listing acute hazardous wastes of section 371.2(b)(1)(ii) of this Title; and (b) the waste does not exhibit any of the characteristics defined in section 371.3(b), (c), (d) and (e) of this Title using any applicable methods prescribed therein; (ii) based on a complete petition, the commissioner must determine, where there is reasonable basis to believe that additional factors (including additional constituents) other than those for which the waste was listed could cause the waste to be a hazardous waste, that such factors do not warrant retaining the waste as a hazardous waste; and (iii) a waste which is so excluded, however, is a hazardous waste if it fails one of the characteristic tests of section 371.3 of this Title. (6) Demonstration samples must consist of enough representative samples, but in no case less than four samples, taken over a period of time sufficient to represent the variability or the uniformity of the waste. (7) Each petition must include, in addition to the information required by paragraph (a)(2) of this section; (i) the name and address of the laboratory facility performing the sampling or tests of the waste; (ii) the names and qualifications of the persons sampling and testing the waste; (iii) the dates of sampling and testing; (iv) the location of the generating facility;

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(v) a description of the manufacturing processes or other operations and feed materials producing the waste and an assessment of whether such processes, operations, or feed materials can or might produce a waste that is not covered by the demonstration; (vi) a description of the waste and an estimate of the average and maximum monthly and annual quantities of waste covered by the demonstration; (vii) pertinent data on and discussion of the factors delineated in the respective criterion for listing a hazardous waste, where the demonstration is based on the factors in section 371.2(b)(1)(iii) of this Title; (viii) a description of the methodologies and equipment used to obtain the representative sample; (ix) a description of the sample handling and preparation techniques, including techniques used for extraction, containerization and preservation of the samples; (x) a description of the tests performed (including results); (xi) the names and model numbers of the instruments used in performing the tests; and (xii) the following statement signed by the generator of the waste or an authorized representative: “I certify under penalty of law that I have personally examined and am familiar with the information submitted in this demonstration and all attached documents, and that, based on my inquiry of those individuals immediately responsible for obtaining the information, I believe that the submitted information is true, accurate, and complete. I am aware that submitting false information is punishable under section 210.45 of the State Penal Law, including the possibility of fine and imprisonment.“ (8) After receiving a petition for an exclusion, the commissioner may request any additional information reasonably required to evaluate the petition. (9) An exclusion will only apply to the waste generated by the individual facility covered by the demonstration and will not apply to waste from any other facility. (10) The commissioner may exclude only part of the waste for which the demonstration is submitted where there is reason to believe that variability of the waste justifies a partial exclusion. (d) Variances from classification as a solid waste. (1) In accordance with the standards and criteria in subdivision (e) and the procedures in subdivision (a) of this section, the commissioner may determine on a case-by-case basis that the following recycled materials are not solid wastes: (i) materials that are accumulated speculatively without sufficient amounts being recycled (as defined in paragraph 371.1(a)(1) of this Part); (ii) materials that are reclaimed and then reused by the same person within the original production process in which they were generated; and (iii) materials that have been reclaimed but must be reclaimed further before the materials are completely recovered. (e) Standards and criteria for variances from classification as a solid waste. (1) The commissioner may grant requests for a variance from classifying as a solid waste those materials that are accumulated speculatively without sufficient amounts being recycled if the applicant demonstrates that sufficient amounts of the material will be recycled or transferred for recycling in the following year. If a variance is granted, it is 13

valid only for the following year, but can be renewed, on an annual basis, by filing a new application. The commissioner's decision will be based on the following criteria: (i) the manner in which the material is expected to be recycled, when the material is expected to be recycled, and whether, because of past practices, market factors, the nature of the material, or contractual arrangements, the recycling is likely to occur; (ii) the reason that the applicant has accumulated the material for one or more years without recycling at least 75 percent of the volume accumulated at the beginning of the year; (iii) the quantity of material already accumulated and the quantity expected to be generated and accumulated before the material is recycled; (iv) the extent to which the material is handled to minimize loss; (v) other relevant factors. (2) The commissioner may grant requests for a variance from classifying as a solid waste those materials that are reclaimed and then reused as feedstock within the original production process in which the materials were generated if the reclamation operation is an essential part of the production process. This determination will be based on the following criteria: (i) how economically viable the production process would be if it were to use virgin materials, rather than reclaimed materials; (ii) the prevalence of the practice on an industry-wide basis; (iii) the extent to which the materials is handled before reclamation to minimize loss; (iv) the time periods between generating the material and its reclamation, and between reclamation and return to the original primary production process; (v) the location of the reclamation operation in relation to the production process; (vi) whether the reclaimed material is used for the purpose for which it was originally produced when it is returned to the original process, and whether it is returned to the process in substantially its original form; (vii) whether the person who generates the material also reclaims it; and (viii) other relevant factors. (3) The commissioner may grant requests for a variance from classifying as a solid waste those materials that have been reclaimed but must be reclaimed further before recovery is completed if, after initial reclamation, the resulting material is commodity-like (even though it is not yet a commercial product, and has to be reclaimed further). This determination will be based on the following factors: (i) the degree of processing the materials has undergone and the degree of further processing that is required; (ii) the value of the material after it has been reclaimed; (iii) the degree to which the reclaimed material is like an analogous raw material; (iv) the extent to which an end market for the reclaimed material is guaranteed; (v) the extent to which the reclaimed material is handled to minimize loss; and (vi) other relevant factors. (f) Variance to be classified as a boiler. (1) In accordance with the standards and criteria in section 370.2(b) of this Part (definition of “boiler“), and the procedures in subdivision (a) of this section, the 14

commissioner may determine on a case-by-case basis that certain enclosed devices using controlled flame combustion are boilers, even though they do not otherwise meet the definition of boiler contained in section 370.2(b), after considering the following criteria: (i) the extent to which the unit has provisions for recovering and exporting thermal energy in the form of steam, heated fluids, or heated gases; (ii) the extent to which the combustion chamber and energy recovery equipment are of integral design; (iii) the efficiency of energy recovery, calculated in terms of the recovered energy compared with the thermal value of the fuel; (iv) the extent to which exported energy is utilized; (v) the extent to which the device is in common and customary use as a “boiler“ functioning primarily to produce steam, heated fluids, or heated gases; and (vi) other relevant factors. 6 NYCRR 373-1.1 (Quality Services-Hazardous Waste Treatment, Storage & Disposal Facility Permitting Requirements) (e) Variances. The department may, upon written application from any person who is subject to this Part, grant a variance from one or more specific provisions of this Part under the following conditions: (1) Any application for a variance must: (i) identify the specific provisions of this Part from which a variance is sought; (ii) demonstrate that compliance with the identified provision would, on the basis of conditions unique and peculiar to the applicant's particular situation, tend to impose a substantial financial, technological, or safety burden on the applicant or the public; and (iii) demonstrate that the proposed activity will have no significant adverse impact on the public health, safety or welfare, the environment or natural resources. (2) The commissioner will not grant any variance which would result in regulatory controls less stringent than those in the RCRA delegated program. (3) In granting any variance, the commissioner may impose specific conditions necessary to assure that the subject activity will have no significant adverse impact on the public health, safety or welfare, the environment or natural resources. 6 NYCRR 373-2.8-Financial Requirements (Quality Services-Final Status Standards for Owners and Operators of Hazardous Waste Treatment, Storage and Disposal Facilities) (3) Request for variance. If an owner or operator can demonstrate to the satisfaction of the commissioner that the levels of financial responsibility required by paragraph (1) or (2) of this subdivision are not consistent with the degree and duration of risk associated with treatment, storage, or disposal at the facility or group of facilities, the owner or operator may obtain a variance from the commissioner. The request for a variance must be submitted to the commissioner as part of the application under section 373-1.5(a) of this Part for a facility that does not have a permit, or pursuant to the procedures for permit modification under section 3731.7 for a facility that has a permit. If granted, the variance will take the form of an adjusted level of required liability coverage, such level to be based on the commissioner's assessment of the degree and duration of risk associated with the ownership or operation of the facility or group of facilities. The commissioner may require an owner or operator who requests a variance to 15

provide such technical and engineering information as is deemed necessary by the commissioner to determine a level of financial responsibility other than that required by paragraph (1) or (2) of this subdivision. Any request for a variance for a permitted facility will be treated as a request for a permit modification under section 373-1.7. 6 NYCRR 373-3.8-Financial Requirements (Quality Services-Interim Status Standards Regulations for Owners and Operators of Hazardous Waste Facilities) (3) Request for variance. If an owner or operator can demonstrate to the satisfaction of the commissioner that the levels of financial responsibility required by paragraphs (1) or (2) of this subdivision are not consistent with the degree and duration of risk associated with treatment, storage, or disposal at the facility or group of facilities, the owner or operator may obtain a variance from the commissioner. The request for a variance must be submitted in writing to the commissioner. If granted, the variance will take the form of an adjusted level of required liability coverage, such level to be based on the commissioner's assessment of the degree and duration of risk associated with the ownership or operation of the facility or group of facilities. The commissioner may require an owner or operator who requests a variance to provide such technical and engineering information as is deemed necessary by the commissioner to determine a level of financial responsibility other than that required by paragraph (1) or (2) of this subdivision. The commissioner will process a variance request as if it were a permit modification request under section 373-1.7 of this Part and subject to the procedures of Part 621 of this Title. Notwithstanding any other provision, the commissioner may hold a public hearing at his or her discretion or whenever the commissioner finds, on the basis of requests for a public hearing, a significant degree of public interest in a tentative decision to grant a variance. 6 NYCRR 373-3.10-Tank Systems (Quality Services- Interim Status Standards Regulations for Owners and Operators of Hazardous Waste Facilities) (7) The owner or operator may obtain a variance from the requirements of this subdivision if the commissioner finds, as a result of a demonstration by the owner or operator, either: that alternative design and operating practices together with location characteristics will prevent the migration of hazardous waste or hazardous constituents into the ground water or surface water at least as effectively as secondary containment during the active life of the tank system; or that in the event of a release that does migrate to ground water or surface water, no substantial present or potential hazard will be posed to human health or the environment. New underground tank systems may not, per a demonstration in accordance with subparagraph (ii) of this paragraph, be exempted from the secondary containment requirements of this subdivision. Application for a variance as allowed in this paragraph does not waive compliance with the requirements of this section for new tank systems. (i) In deciding whether to grant a variance based on a demonstration of equivalent protection of ground water and surface water, the commissioner will consider: (a) the nature and quantity of the waste; (b) the proposed alternate design and operation; (c) the hydrogeologic setting of the facility, including the thickness of soils between the tank system and ground water; and (d) all other factors that would influence the quality and mobility of the hazardous constituents and the potential for them to migrate to ground water or surface water. 16

(ii) In deciding whether to grant a variance, based on a demonstration of no substantial present or potential hazard, the commissioner will consider: (a) the potential adverse effects on ground water, surface water, and land quality taking into account: (1) the physical and chemical characteristics of the waste in the tank system, including its potential for migration; (2) the hydrogeological characteristics of the facility and surrounding land; (3) the potential for health risks caused by human exposure to waste constituents; (4) the potential for damage to wildlife, crops, vegetation, and physical structures caused by exposure to waste constituents; and (5) the persistence and permanence of the potential adverse effects; (b) the potential adverse effects of a release on ground water quality, taking into account: (1) the quantity and quality of ground water and the direction of ground water flow; (2) the proximity and withdrawal rates of water in the area; (3) the current and future uses of ground water in the area; and (4) the existing quality of ground water, including other sources of contamination and their cumulative impact on the ground water quality; (c) the potential adverse effects of a release on surface water quality, taking into account: (1) the quantity and quality of ground water and the direction of ground water flow; (2) the patterns of rainfall in the region; (3) the proximity of the tank system to surface waters; (4) the current and future uses of surface waters in the area and any water quality standards established for those surface waters; and (5) the existing quality of surface water, including other sources of contamination and the cumulative impact on surface water quality; and (d) the potential adverse effects of a release on the land surrounding the tank system, taking into account: (1) the patterns of rainfall in the region; and (2) the current and future uses of the surrounding land. (iii) The owner or operator of a tank system, for which a variance from secondary containment had been granted in accordance with the requirements of subparagraph (i) of this paragraph, at which a release of hazardous waste has occurred from the primary tank system but has not migrated beyond the zone of engineering control (as established in the variance), must: (a) comply with the requirements of subdivision (g) of this section, except paragraph (4); and (b) decontaminate or remove contaminated soil to the extent necessary to: (1) enable the tank system, for which the variance was granted, to resume operation with the capability for the detection of and response to releases at least equivalent to the capability it had prior to the release; and 17

(2) prevent the migration of hazardous waste or hazardous constituents to ground water or surface water; and (c) if contaminated soil cannot be removed or decontaminated in accordance with clause (b) of this subparagraph, comply with the requirements of paragraph (h)(2) of this section. (iv) The owner or operator of a tank system, for which a variance from secondary containment had been granted in accordance with the requirements of subparagraph (i) of this paragraph, at which a release of hazardous waste has occurred from the primary tank system and has migrated beyond the zone of engineering control (as established in the variance), must: (a) comply with the requirements of paragraphs (g)(1)-(4) of this section; (b) prevent the migration of hazardous waste or hazardous constituents to ground water or surface water, if possible, and decontaminate or remove contaminated soil. If contaminated soil cannot be decontaminated or removed, or if ground water has been contaminated, the owner or operator must comply with the requirements of paragraph (h)(2) of this section; and (c) provide secondary containment in accordance with the requirements of paragraphs (1)-(6) of this subdivision if repairing, replacing, or reinstalling the tank system, or reapply for a variance from secondary containment and meet the requirements for new tank systems in subdivision (c) of this section if the tank system is replaced. The owner or operator must comply with these requirements even if contaminated soil can be decontaminated or removed, and ground water or surface water has not been contaminated. (8) The following procedures must be followed in order to request a variance from secondary containment. (i) The commissioner must be notified in writing by the owner or operator that the owner or operator intends to conduct and submit a demonstration for a variance from secondary containment as allowed in paragraph (7) of this subdivision according to the following schedule: (a) for existing tank systems, at least 24 months prior to the date that secondary containment must be provided in accordance with paragraph (1) of this subdivision; and (b) for new tank systems, at least 30 days prior to entering into a contract for installation of the tank system. (ii) As part of the notification, the owner or operator must also submit to the commissioner a description of the steps necessary to conduct the demonstration and a timetable for completing each of the steps. The demonstration must address each of the factors listed in subparagraph (7)(i) or (ii) of this subdivision. (iii) The demonstration for a variance must be completed and submitted to the commissioner within 180 days after notifying the commissioner of intent to conduct the demonstration. 6 NYCRR 375-1.8- Remedial Program (Quality Services-General Remedial Program Requirements) (c) Source removal and control measures. The following is the hierarchy of source removal and control measures which are to be used, ranked from most preferable to least preferable: 18

(1) Removal and/or treatment. All sources, concentrated solid or semi-solid hazardous substances, dense non-aqueous phase liquid, light non-aqueous phase liquid and/or grossly contaminated media shall be removed and/or treated; provided however, if the removal and/or treatment of all such contamination is not feasible, such contamination shall be removed or treated to the greatest extent feasible. (2) Containment. Any source remaining following removal and/or treatment set forth in this subdivision shall be contained; provided however, if full containment is not feasible, such source shall be contained to the greatest extent feasible. (3) Elimination of exposure. Exposure to any source remaining following removal, treatment and/or containment set forth in this subdivision shall be eliminated through additional measures, including but not limited to, as applicable, the timely and sustained provision of alternative water supplies and the elimination of volatilization into buildings; provided however, if such elimination is not feasible such exposure shall be eliminated to the greatest extent feasible. (4) Treatment of source at the point of exposure. Treatment of the exposure resulting from a source of environmental contamination at the point of exposure, as applicable, including but not limited to, wellhead treatment or the management of volatile contamination within buildings, shall be considered as a measure of last resort. 6 NYCRR 375-3.8-Remedial Program (Quality Services-Brownfield Clean Up Program) (e) Cleanup tracks. For sites or portions of sites where the Department has determined that remediation is needed to meet the remedial program requirements, each remedial alternative that is developed and evaluated shall, in addition to all other requirements in this section and section 375-1.8(c), conform to the requirements of one of the following cleanup tracks. (1) Track 1: Unrestricted use. The following provisions apply to a site, or portion thereof, being addressed pursuant to Track 1: (i) the remedial program shall achieve a cleanup level that will allow the site to be used for any purpose without any restrictions on the use of the site as described in subparagraph 375-1.8(g)(1)(i); (ii) the soil component of the remedial program shall achieve the unrestricted soil cleanup objectives as set forth in Table 375-6.8(a) for all soils above bedrock. (iii) the remedial program shall not include the use of long-term institutional or engineering controls; provided, however, that a restriction on groundwater use may be included as a component of the remedial program if the applicant: (a) is a volunteer; and (b) has demonstrated to the Department's satisfaction that there has been a bulk reduction in groundwater contamination to asymptotic levels; (iv) the remedial program may include the use of short-term employment of institutional or engineering controls provided: (a) the remedial program includes an active treatment system, either exsitu or in-situ, which will operate for, or require, no more than 5 years to meet the applicable contaminant-specific soil cleanup objectives or remedial goals established for other contaminated media; (b) the remedial program requires the institutional control to assure the operation and integrity of the remedy, as well as to address potential human health exposures during this period; and 19

(c) the remedial program includes a provision for the applicant to implement an alternative remedy to meet the soil cleanup objectives in the event that the short-term institutional period is exceeded; and (v) the Department may require the Applicant, or the Applicant may request, to develop a soil cleanup objective for a contaminant not included in Table 3756.8(a) as set forth in section 375-6.9. (2) Track 2: Restricted use with generic soil cleanup objectives. The following provisions apply to a site, or portion thereof, being addressed pursuant to Track 2: (i) the remedial program may provide for the restriction of the use of the site as described in subparagraph 375-1.8(g)(2)(i); (ii) the soil component of the remedial program shall achieve the lowest of the three applicable contaminant-specific soil cleanup objectives for all soils above bedrock, as set forth in sections 375-6.4, 375-6.5 and 375-6.6, except as provided in subparagraph (iii) below; (iii) the requirement to achieve contaminant-specific soil cleanup objectives as set forth in Table 375-6.8(2) for all soils above bedrock shall not apply to soils at a depth greater than 15 feet below ground surface, provided that: (a) the soils below 15 feet do not represent a source of contamination; (b) the environmental easement for the site requires that any contaminated soils remaining at depth will be managed along with other site soils, pursuant to a site management plan; (c) off-site groundwater does not exceed standards; and (d) on-site groundwater use is restricted; and (iv) the remedial program shall not use long-term institutional or engineering controls to achieve the restricted soil cleanup objectives. The use of short-term institutional or engineering controls is allowed, provided: (a) the remedial program includes an active treatment system, either exsitu or in-situ, which will operate for, or require, no more than 5 years to meet the applicable contaminant-specific soil cleanup objectives or remedial goals established; (b) the remedial program requires the institutional control to assure the operation and integrity of the remedy, as well as to address potential human health exposures during this period; and (c) the remedial program includes a provision for the applicant to implement an alternative remedy to meet the soil cleanup objectives in the event that the short-term institutional period is exceeded; (v) the remedial program may include the use of long-term institutional or engineering controls to address contamination related to other media including, but not limited to groundwater and soil vapor; and (vi) the Department may require the remedial party, or the remedial party may request, to develop a soil cleanup objective for a contaminant not included in Table 375-6.8(b) as set forth in section 375-6.9. (3) Track 3: Restricted use with modified soil cleanup objectives. The remedial program for a site being addressed pursuant to Track 3 shall satisfy the provisions for a Track 2 remedial program; provided, however, the Department may approve the modification of one or more of the contaminant-specific soil cleanup objectives set forth in Table 37520

6.8(b) based upon site-specific data. Any such modification shall be performed in accordance with section 375-6.9. (4) Track 4: Restricted use with site-specific soil cleanup objectives. The following provisions apply to a site, or portion thereof, being addressed pursuant to Track 4: (i) in developing the site-specific soil cleanup objectives, the Applicant may, solely or in combination: (a) use the soil cleanup objectives, as set forth in subpart 375-6; (b) develop or modify site specific soil cleanup objectives, as set forth at section 375-6.9; or (c) propose site-specific soil cleanup objectives which are protective of public health and the environment; (ii) the remedial program may include the use of long-term institutional or engineering controls to address all media; and (iii) exposed surface soils in a Track 4 remedy will be addressed as follows: (a) for residential use: (1) the top two feet of all exposed surface soils which exceed the site background values for contaminants of concern and are not otherwise covered by the components of the development of the site (e.g. buildings, pavement), shall not exceed the applicable contaminant-specific soil cleanup objectives as set forth in subparagraph (2)(ii) above; and (2) where it is necessary to utilize off-site soil to achieve this requirement, the soil brought to the site will satisfy the requirements of subdivision 375-6.7(d); (b) for commercial use: (1) the top one foot of all exposed surface soils which exceed the site background values for contaminants of concern and are not otherwise covered by the components of the development of the site (e.g. buildings, pavement), shall not exceed the applicable contaminant-specific soil cleanup objectives as set forth in subparagraph (2)(ii) above; and (2) where it is necessary to utilize off-site soil to achieve this requirement, the soil brought to the site will satisfy the requirements of subdivision 375-6.7(d); (c) for industrial use: (1) the top one foot of all exposed surface soils which exceed the site background values for contaminants of concern and are not otherwise covered by the components of the development of the site (e.g. buildings, pavement), shall not exceed the applicable contaminant-specific soil cleanup objectives as set forth in subparagraph (2)(ii) above; and (2) where it is necessary to utilize off-site soil to achieve this requirement, the soil brought to the site will satisfy the requirements of subdivision 375-6.7(d); (5) All Tracks. For remedial programs under all Tracks, the threat to public health and the environment resulting from contamination in environmental media other than soil shall 21

be evaluated in the development of remedial alternatives and addressed in the alternatives analysis to ensure that the remedial program meets the requirements of ECL 27-1415(1), subdivisions 375-3.8(a) and (f), and section 375-6.7. 6 NYCRR 376.1-General (Quality Services-Land Disposal Restrictions) (5) The commissioner may authorize an exemption, extension, or variance from any provision of this Part, so long as such action will not result in requirements that are less broad or less stringent than the requirements of 40 CFR Part. 268 (see 370.1(e) of this Title). If an exemption, extension, or variance from the land disposal provisions of 40 CFR Part 268 (see 370.1(e) of this Title has been granted by the EPA Administrator pursuant to 40 CFR sections 268.5, 268.6, 268.42(b), or 268.44, the commissioner must, if such action is to become effective in New York State, subsequently also approve such action, but the commissioner shall not grant approval in any way as to make such action broader in scope, longer in duration, or less stringent than authorized by the person of the obligation to comply with all other applicable provisions of this Part. Applications for exemptions, extensions, or variances by any generator or facility shall be in accordance with the petition provisions of subdivision 373-1.1(e) of this Title. 6 NYCRR 376.4- Treatment Standards (Quality Services-Land Disposal Restrictions) (e) Variance from a Treatment Standard. (1) Based on a petition filed by a generator or treater of hazardous waste with the EPA Administrator, pursuant to 40 CFR section 268.44 and the commissioner, the commissioner may approve a variance from an applicable treatment standard if: (i) It is not physically possible to treat the waste to the level specified in the treatment standard, or by the method specified as the treatment standard. To show that this is the case, the petitioner must demonstrate that because the physical or chemical properties of the waste differ significantly from waste analyzed in developing the treatment standard, the waste cannot be treated to the specified level or by the specified method; or (ii) It is inappropriate to require the waste to be treated to the level specified in the treatment standard or by the method specified as the treatment standard, even though such treatment is technically possible. To show that this is the case, the petitioner must either demonstrate that: (a) Treatment to the specified level or by the specified method is technically inappropriate (for example, resulting in combustion of large amounts of mildly contaminated environmental media); or (b) For remediation waste only, treatment to the specified level or by the specified method is environmentally inappropriate because it would likely discourage aggressive remediation. (iii) The EPA Administrator must also have approved the variance pursuant to 40 CFR section 268.44. (2) Each petition must be submitted in accordance with the procedures in 6 NYCRR Part 370.3(a). (3) Each petition must include the following statement signed by the petitioner or an authorized representative: “I certify under penalty of law that I have personally examined and am familiar with the information submitted in this petition and all attached documents, and that, based on my 22

inquiry of those individuals immediately responsible for obtaining the information, I believe that the submitted information is true, accurate, and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment.“ (4) After receiving a petition for variance from a treatment standard, the commissioner may request any additional information or samples which he may require to evaluate the petition. Additional copies of the complete petition may be requested as needed. 6 NYCRR 380-3.5-Variances (Quality Services-Permits for Discharge and Disposal of Radioactive Material to the Environment) (a) Unless otherwise precluded by law, the department may, upon written application from any person who is subject to this Part, grant a variance from one or more specific provisions of this Part under the conditions set forth in this section. (b) Every application for a variance must: (1) be submitted to the department in writing; and (2) be submitted in conjunction with an application for a permit, where a permit is also required pursuant to this Part; and (3) identify the specific provisions of this Part from which a variance is sought; and (4) demonstrate that compliance with the identified provisions would, on the basis of conditions unique to the person's particular situation, tend to impose an unreasonable economic, technological, or safety burden on the person or the public, and (5) demonstrate that the proposed activity will have no significant adverse impact on the public health and safety and the environment,will be consistent with the provisions of the ECL, and will meet all other provisions of this Part. (c) An application for a permit, for approval of proposed procedures to discharge or dispose of radioactive material subject to this Part not otherwise authorized by Subpart 380.4 of this Part, must also meet the following: (1) The application must satisfy the general requirements for complete applications contained in Part 621 of this Title; and (2) The application must include all information required in section 380-3.2(b) of this Subpart; and (3) The application must include: (i) A description of the waste containing radioactive material to be disposed of, including the physical and chemical properties relevant to risk evaluation, and the proposed manner and conditions of waste disposal; and (ii) an analysis and evaluation of pertinent information on the nature of the environment; and (iii) the nature and location of other potentially affected licensed and unlicensed facilities; and (iv) analyses and procedures to ensure that doses are maintained ALARA and within the dose limits in section 380-5.1 of this Part.

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6NYCRR 381.8- Permit Application Procedures (Quality Services- Transporters of LowLevel Radioactive Waste) (b) Variances. (1) The department may, upon written application from any person who is subject to this Part, grant a variance from one or more specific provisions of this Part, consistent with this subdivision. (2) Any application for a variance hereunder must: (i) identify the specific provisions of this Part from which a variance is sought; (ii) demonstrate that compliance with the identified provisions would, on the basis of conditions unique and peculiar to the applicant's particular situation, impose a substantial financial, technological or safety burden on the applicant or the public; and (iii) demonstrate that the proposed activity will have no significant adverse impact on public health, safety or welfare, the environment or natural resources, and will be consistent with the provisions of the ECL, the purpose of this Part and the performance expected from applications of this Part. 6 NYCRR 382.22- Additional Siting Criteria for Aboveground & Belowground Disposal (Quality Services - Regulation of Low-Level Radioactive Waste Disposal Facilities Siting Criteria for Low-Level Radioactive Waste Disposal Sites) (b) Groundwater and hydrogeology. (1) The disposal site must have sufficient depth to the water table that groundwater intrusion, perennial or otherwise, will not contact the disposal units. An exception to this requirement that would allow disposal below the water table may be approved by the department if it can be conclusively shown that disposal site characteristics will result in molecular diffusion being the predominant means of radionuclide movement and the rate of movement will result in compliance with the performance objectives of sections 382.10 - 382.15 of this Part. In no case will the waste disposal units be permitted in the zone of fluctuation of the water table. 6 NYCRR 382.4- Variances & Exemptions (Quality Services -Regulation of Low-Level Radioactive Waste Disposal Facilities) (a) The department may grant a variance from any of the provisions of this Part except the performance objectives in sections 382.10 - 382.15. The department may grant such a variance if an applicant establishes, to the satisfaction of the department, that: (1) compliance with the provision from which the variance is sought would impose on the applicant or the public an unreasonable safety or economic hardship; (2) with the requested variance in effect, the proposed land disposal facility would meet the performance objectives in sections 382.10 - 382.15 of this Part; and (3) the requested variance would have no significant adverse impact on the public health, safety or welfare, the environment or natural resources, and would be consistent with the provisions of the ECL and the purpose of this Part. (b) In granting any variance pursuant to this section, the department may impose specific conditions reasonably necessary to ensure that the granting of such variance will have no adverse impact on the environment, natural resources, or on the public health, safety or welfare.

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6 NYCRR 383-1.5-Variances (Quality Services -Regulations for Low-Level Radioactive Waste Disposal Facilities Financial Assurance Requirements) (a) Unless otherwise precluded by law, the department may, upon written application from any person who is subject to this Part, grant a variance from one or more provisions of this Part except the performance objectives under the conditions set forth in this Subpart. An application for a variance must: (1) identify the specific provisions of this Part from which a variance is sought; (2) demonstrate to the satisfaction of the department that compliance with the identified provision would impose on the applicant or the public an unreasonable safety or economic hardship; (3) demonstrate to the satisfaction of the department that, with the requested variance in effect, there would be reasonable assurance that the performance objectives would be met; and (4) demonstrate to the satisfaction of the department that the requested variance would: (i) cause no significant adverse impact on the environment, natural resources, or the public health, safety and welfare; and (ii) would be consistent with the other provisions of the ECL and this Part and Part 382 of this Title. (b) In granting a variance pursuant to this section, the department may impose specific conditions reasonably necessary to ensure that the granting of such variance will cause no significant adverse impact on the environment, natural resources, or on the public health, safety, or welfare. 6 NYCRR 383-6.11- Other Provisions (Quality Services-Radioactive Waste Land Disposal Facilities Financial Assurance Requirements) (a) Modification/variance. (1) The department may, upon written application from any person who is subject to this Subpart, concurrent with an application for a new permit, or for a modification or renewal of an existing permit, grant a modification/variance from one or more specific provisions of this Subpart under the conditions set forth in this section. (2) Every application for modification/variance must: (i) identify the specific provisions of this Subpart from which a modification/variance is sought; (ii) demonstrate that compliance with the identified provisions, on the basis of conditions unique and peculiar to the applicant's particular situation, is unnecessary or inappropriate consistent with the public interest; (iii) demonstrate that the proposed modification/variance will have no significant adverse impact on the public health, safety or welfare, the environment or natural resources; (iv) demonstrate that the minimum requirements of this Subpart which ensure proper facility closure based upon the estimates approved pursuant to this Subpart and coverage of personal injury and property damage to third parties caused by the operation of the land disposal facility will not be reduced or eliminated. (3) The commissioner may, in his discretion, grant a modification/variance from any provision of this Subpart upon a written finding that each of the demonstrations identified in paragraph (2) of this section are successfully made, and that such 25

modification/variance is consistent with public interest and the purposes of this Subpart; provided, however, the commissioner shall not grant a modification/variance from the minimum requirements of this Subpart which insure proper facility closure and coverage of personal injury and property damage to third parties caused by the operation of the facility. 6 NYCRR 422.1-General Provisions (Quality Services- Mined Land-Use Plan) (f) The department may modify any of the substantive requirements of this Part upon a showing by the applicant that the proposed modification will achieve the same degree of environmental protection as would be achieved by compliance with the provision for which modification is requested. Requests for modification must be in writing in the original application, renewal application or by amendment. 6 NYCRR 422.2- Mining Plans, Specific Provisions (Quality Services- Mined Land-Use Plan) (3) a description of the mining method indicating the method of extraction, the sequence of cuts and excavations, the disposition of materials other than through sale, exchange, commercial, industrial or municipal use, and the use of haulageways. The applicant shall be governed by the following standards when submitting the required information. (i) the method of extraction shall mean removal such as by drilling and blasting, the use of mechanical equipment (backhoe, shovel, front end loader, dragline) or by dredging. (ii) Any cut or excavation within the permit area, whether it is for the purpose of gaining access to a mineral, mining a mineral, or of transporting a mineral shall be considered to affect the reclamation plan unless the applicant can demonstrate otherwise. Shafts, drifts, adits, tunnels, lifts,and inclines shall be considered types of cuts and excavations. (iii) The perimeter of a temporary or permanent mine floor shall not be established closer to either the property line most nearly adjacent to the affected land or to any easement within or adjacent to the affected land that the following: a distance of 25 feet measured in a horizontal plane when the adjacent property or easement is at or below the proposed final elevation of the affected land; a distance equal to the sum of 25 feet plus one and one-half times the height of the mine face in an unconsolidated material or a distance equal to the sum of 25 feet plus one and one-quarter times the height of the mine face in a consolidated material, when the adjacent property is at al higher elevation than the affected land. The applicant may, with the approval of the department, modify the distance requirements contained in this subparagraph. (iv) The perimeter of a stockpile or spoil bank shall not be established closer to either the property line most nearly adjacent to the affected land or to any easement within or adjacent to the affected land than a distance of 25 feet. The applicant may, with the approval of the department, modify the distance requirement contained in this subparagraph.

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6 NYCRR 422.3- Reclamation Plan, Specific Provisions (Quality Services- Mined Land-Use Plan) ([b]) All ridges, peaks and slopes created either by excavation of a mineral or by the disposal of spoil shall be left no steeper than the following: rock (ledge or bedrock)-90 degrees depending upon the condition and characteristics of the formation as it exists in the mine; talus (broken rock)-37 degrees, or a slope of one vertical on one and one-quarter horizontal, unless the talus is to be covered and revegetated in which case the slope shall not exceed that which is required for fine sand, silt and clay; coarse sand and gravel-33 degrees, or a slope of one vertical on one and one-half horizontal; fine sand, silt and clay-26 degrees or a slope of one vertical on two horizontal. The slope provisions contained in this clause may be modified with the approval of the department. 6 NYCRR 500.12- Variances (Resource Management Services- Floodplain Management Regulations Development Permits) (a) Persons seeking a variance from the provisions of this Part must submit a written request to the regional permit administrator. Such request will be treated as an application for a development permit modification for purposes of the procedures specified in this Part and in Part 621 of this Title. The variance request must: (1) state the name and address of the applicant; (2) describe the location and scope of the proposed project; (3) indicate the basis for the applicant's claim of unnecessary hardships or practical difficulties in complying with any provisions of this Part. Insufficient lot size does not constitute an unnecessary hardship or a practical difficulty; and (4) be accompanied by such information as the regional permit administrator deems necessary for the request for the variance to be considered complete as prescribed in Part 621 of this Title. (b) A variance will be granted if the department determines that: (1) the applicant has shown good and sufficient cause; (2) failure to grant the variance would result in exceptional hardship to the applicant; (3) granting the variance will not result in increased flood heights, additional threats to public safety or extraordinary public expense, create nuisances, cause fraud on or victimization of the public relative to the goals and objectives of the National Flood Insurance Program or conflict with local laws or ordinances; (4) the terms of the variance, if granted, would be the minimum necessary to afford relief considering the flood hazard; and (5) if the proposed project is located within a designated regulatory floodway, the applicant has provided an engineering report certified by a licensed professional engineer which demonstrates through hydrologic and hydraulic analyses performed in accordance with standard engineering practice that the proposed encroachment will not result in any increase in flood levels within the community during the occurrence of the base flood discharge.

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6 NYCRR 502.8- Variance Provisions for State Agencies (Resource Management ServicesFloodplain Management Criteria for State Projects) (a) Variances to the provisions of this Part may be granted by the department in accord with this section. No project or activity which requires a variance to any provision of this Part shall be commenced unless the department grants a variance in accord with this section. (b) Requests for variances to the provisions of this Part shall be submitted in writing to the department by the State agency requesting such variance. Any request for a variance pursuant to this section shall be filed, by the State agency requesting the variance, with the department at the earliest time practicable in the planning of the project or activity involved, and to the maximum extent possible prior to the submission of a formal budget request for the funding of said project or activity. (c) The procedures for the submission of requests for variances under this section, time periods for department action thereon, provisions relating to minor projects, and notice and hearing requirements, shall be governed by the provisions of Part 621 of this Title. A copy of the department's decision shall be sent by mail to the State agency requesting the subject variance and to the director of the Division of the Budget. (d) Variances shall not be issued by the department for any project or activity within any designated regulatory floodway if any increase in flood levels would result during the base flood discharge. (e) Variances shall be issued by the department only upon: (1) a showing of good and sufficient cause; (2) a determination that the project will, consistent with social, economic and other essential considerations of State policy, be undertaken in accordance with the purposes of this Part to the maximum extent possible; (3) a determination that the granting of a variance will not result in materially increased flood damages, add additional threats to public safety, result in extraordinary public expense, or create nuisances or cause victimization of the public; and (4) a determination that the variance granted is the minimum necessary, considering flood hazard, to afford relief. (f) The department may attach to any variance issued, pursuant to this section, such conditions as are necessary to insure that any action taken pursuant to said variance is consistent with the purposes and limitations of sections 502.4, 502.5 and 502.6 of this Part to the maximum extent possible. 6 NYCRR 502.9 – Variance Provisions Relating to Certain Facilities & Lands Owned or Formerly Owned by the State (Resource Management Services – Floodplain Management Criteria for State Projects) (e) Standards for the granting of a variance. (1) The petitioner shall establish to the satisfaction of the commissioner that he will suffer an unnecessary hardship if the variance is not granted, or that there are practical difficulties in the way of carrying out the strict letter of the requirements of the covenant and use restriction. In the absence of a satisfactory showing of good and sufficient cause, no variance will be issued. (2) The basis for the granting of a variance shall be a determination that the petitioner has established:

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(i) that the proposed project or use of such lands is consistent with the findings and purposes of the New York State Legislature as expressed in section 36-0101 of the Environmental Conservation Law; and (ii) that the public safety and welfare will be secured and substantial justice done. 6 NYCRR 505.13- Variances (Resource Management Services –Coastal Erosion Management) (a) When an applicant can demonstrate that the strict application of the restrictions or requirements of sections 505.7 - 505.9 of this Part will cause practical difficulty or unnecessary hardship, any such restriction or requirement may be varied or modified, provided that the following criteria are met: (1) no reasonable, prudent, alternative site is available; (2) all responsible means and measures to mitigate adverse impacts on natural systems and the functions and protective values described in section 505.3 of this Part have been incorporated into the project design and will be implemented at the developer's expense; (3) the development will be reasonably safe from flood and erosion damage; (4) the variance requested is the minimum necessary to overcome the practical difficulty or hardship which was the basis for requesting it; and (5) where public funds are utilized, the public benefits clearly outweigh the long-term adverse effects for any proposed activities and development. (b) Any person wishing to make a request for a variance must do so in writing. The variance request must specify the standard, restriction or requirement to be varied and how the requested variance meets the criteria established in subdivision (a) of this section. The burden of demonstrating that the requested variance meets these criteria rests entirely with the applicant. 6 NYCRR 553.4- Exceptions (Resource Management Services- Well Spacing) Where in its opinion there exists good and sufficient reason to permit an exception to the well spacing provisions of sections 553.1, 553.2 and 553.3 of this Part, the department may permit reasonable well location exceptions which will protect correlative rights and prevent waste. Any application for such an exception shall be made in writing in triplicate as a separate attachment to the application for permit as outlined in section 552.1 of this Title and shall set forth in ample detail the reason or reasons for such exception request. Upon receipt of this exception request, the department shall promptly schedule a public hearing to facilitate a decision on the application. When a location exception is granted, the department may adjust the production from such well or take such other action as it may deem necessary for the protection of correlative rights or to prevent waste. 6 NYCRR 554.5- Deviation (Resources Management Services-Drilling Practices & Reports) (a) The maximum point at which a well penetrates a producing formation shall not vary unreasonably from the vertical drawn from the center of the hole at the surface. Minor deviations will be permitted, however, without special permission for short distances, to straighten the hole, to sidetrack junk, or to correct other mechanical difficulties. (b) If for any reason the department feels that a well has been deviated excessively, it shall have the right to require the operator to have a complete angular deviation and directional survey made in the well by an approved well surveying company and certified as to correctness at the operator's sole cost, risk and expense. In the event the survey reveals any unreasonable 29

violations of the applicable well location or spacing regulations, the department may either require the excessively deviated well to be redrilled or to be plugged and abandoned at the option of the operator. (c) Any owner or operator so desiring, also may petition the department for permission to have an angular deviation and directional survey made in any wells on leases or units offsetting the leases or units of the interested owner or operator. If after public hearing on the petition, the department feels the request is justified, and the petitioner has deposited good and sufficient security or bond, the department may issue an order authorizing the survey to be made by an approved well surveying company and certified as to correctness at the sole cost, risk and expense of the petitioner. In the event the survey reveals an unreasonable violation of the applicable well location or spacing requirements, the department then will assess all the costs of the survey to the violator and may either require any excessively deviated well to be redrilled or to be plugged and abandoned at the option of its operator. (d) Controlled directional drilling also shall be permitted upon the approval of the department. Any operator desiring to intentionally deviate a well from the vertical shall first make written application to the department. The application, which shall be in addition to the permit application as provided in section 552.1 of this Title, must contain the following information: (1) names of the county, field or area, pool and lease and well number; (2) description of the surface location and of the target bottomhole location in feet from the two nearest lease boundaries; (3) reason for the proposed intentional deviation; (4) names and addresses of the offsetting operators and a statement that each has been sent a copy of the application by registered mail, and the date of such mailing. (e) The application must be accompanied by a neat, legible plat drawn to scale which shows the well, all offsetting leases and the wells located thereon, the pool in which they are completed, and the names of the offsetting operators. (f) Concurrently with the filing with the department of the application to intentionally deviate the well, the applicant must send a copy of said application and accompanying plat or plats by registered mail to the operators of all leases or units offsetting the lease or unit on which the well is to be drilled. (g) Upon receipt of the application to intentionally deviate the well, the department will hold same for 10 days. If within said 10-day period any offset operator reciting reasonable cause, shall file in writing with the department a protest to such intentional deviation, or if the department is not in accord with the proposed deviation, the application shall be scheduled for public hearing. If no objection from either an offset operator or the department is interposed within the 10-day period, and all other things being in order, the application shall be approved and written permission for the intentional deviation shall be issued by the department. The compulsory 10-day waiting period shall not be required if the application for permission to intentionally deviate the well is accompanied by the written consent of the operators of all leases or units offsetting the lease or unit containing the well proposed for deviation. (h) Within 30 days after the completion of an intentionally deviated well, a complete angular deviation and directional survey of the well obtained by an approved well surveying company and certified as to correctness shall be filed with the department.

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6 NYCRR 598.1-General (Resources Management Services-Handling & Storage of Hazardous Substances) (e) Variances. (1) The Department may, upon written request from any person subject to this Part, grant a variance from one or more specific provisions of this Part. An application for a variance must: (i) identify the specific provisions of this Part from which a variance is sought; (ii) demonstrate that compliance with the identified provisions would, on the basis of conditions unique to the person's particular situation, tend to impose a substantial economic, technological or safety burden on the person; and (iii) demonstrate that the proposed activity will have no significant adverse impact on the public health, safety, welfare or the environment and will be consistent with the provisions of the ECL and the performance expected from application of this Part. 6 NYCRR 599.1-General (Resources Management Services-Standards for New or Modified Hazardous Substance Storage Facilities) (e) Variances. (1) The department may, upon written request from any person subject to this Part, grant a variance from one or more specific provisions of this Part. An application for a variance must: (i) identify the specific provisions of this Part from which a variance is sought; (ii) demonstrate that compliance with the identified provisions would, on the basis of conditions unique to the person's particular situation, tend to impose a substantial economic, technological or safety burden on the person; and (iii) demonstrate that the proposed activity will have no significant adverse impact on the public health, safety, welfare or the environment and will be consistent with the provisions of the ECL and the performance expected from application of this Part. (2) The department may not grant any variance which would result in regulatory controls less stringent than those in 40 CFR Parts 280 and 281 (see section 598.1[j] of this Title). (3) In granting any variance, the department may impose specific conditions necessary to assure that the subject activity will have no significant adverse impact on the public health, safety, welfare or the environment. 6 NYCRR 614.1-General (Resources Management Services-Standards for New and Substantially Modified Petroleum Storage Facilities) (e) Variances. The department may, upon written application from any person subject to this Part, grant a variance from one or more specific provisions of this Part. In granting a variance, the department may impose specific conditions necessary to assure that the variance will have no significant adverse impact on the environment or public health. An application for a variance must: (1) identify the specific section or sections from which a variance is sought; and (2) provide the department with evidence including data, plans, specifications and test results that show the new or alternative designs, practices or methods protect the environment in a manner equal to or greater than the requirements of this Part. 31

6 NYCRR 621.3-General Requirements for Applications (General Regulations-Uniform Procedures Permit Application Procedures) (5) If variances from permit standards are sought and are specifically provided for in a permit program's implementing regulations, then the application must include a request and justification for such variances as outlined in the program's implementing regulations. 6 NYCRR 645-8.2- Procedure (Independent Agencies Within the Department- Variance Procedures) (a) Any person seeking a variance from the commission shall submit an application for a variance to the commission on such form as the commission may prescribe. The application for a variance shall be processed as a permit application in accordance with the procedures specified in Subpart 645-5 of this Part. (b) At a minimum, any application for a variance must: (1) identify the specific provisions of the regulations of the commission from which a variance is sought; (2) demonstrate that compliance with the identified provisions would, on the basis of conditions unique and peculiar to the applicant's particular situation, impose a substantial technological, financial or safety burden upon the applicant or the public; and (3) demonstrate that the proposed activity will have no adverse impact on the public health, safety or welfare, the environment or the natural resources of the park. 6 NYCRR 645-8.3-Standard (Independent Agencies Within the Department- Variance Procedures) (a) No variance shall be granted under this Subpart unless the applicant shall establish by substantial, credible evidence unnecessary hardship. (b) In order to establish unnecessary hardship, an applicant must demonstrate: (1) unique and peculiar conditions to the applicant's particular situation which impose a substantial technological, financial or safety burden upon the applicant or the public; (2) that because of such uniqueness, there is no reasonable possibility that the applicant's property or, if no property is involved, the continuation of the applicant's business, enterprise, use or activity will bring a reasonable return following conformity with the regulations of the commission; (3) that the proposed activity will have no adverse impact on the public health, safety or welfare, the environment or the resources of the park; and (4) that the granting of a variance will not alter the essential character of the area in which the proposed use or activity is located, and will not lead to congestion in the park. 6 NYCRR 646-4.18- Variances from Stormwater Regulatory Programs (Independent Agencies Within the Department- Stormwater Management) (d) A permit application involving a variance shall be processed in accordance with Subpart 6455 of this Title except that no variance shall be granted unless the commission finds that the applicant has demonstrated entitlement to the variance pursuant to the criteria in section 267-b3. (b) of the New York State Town Law. The decision on a variance under municipal jurisdiction shall be in accordance with sections 267-a and 267-b of the New York Town Law in the case of a town or sections 7-712-a and 7-712-b of the New York State Village Law in the case of a village, and any amendments thereto provided, however, that the grant of any variance to the 32

shoreline or cutting restrictions of section 806 of the Adirondack Park Agency Act (Executive Law, article 27) must be in compliance with that section and section 807 of the act, if applicable. 6 NYCRR 646-8.5-Variances (Independent Agencies Within the Department- Substantive Regulations) Any person who experiences unnecessary hardship by reason of this Subpart may apply to the Lake George Park Commission for a variance from this Subpart subject to the standards, procedures and conditions required by 6 NYCRR Subpart 645-8. Notwithstanding the failure of an applicant to demonstrate unnecessary hardship, the commission may grant a variance upon a showing by the applicant that the proposed project or activity incorporates best technologies available, as determined by the commission, for wastewater and stormwater management. Upon any application for a variance, the commission may coordinate its review of the variance application with the review of the project or activity by other involved agencies. 6 NYCRR 653.6- Variances (Division of Water Resources- Approval of Realty Subdivisions) (a) The commissioner may on written application grant a variance from a specific provision of this Part in a particular case, subject to appropriate conditions, where such variance is in harmony with the general purpose and intent of this Part. (b) The commissioner may impose more stringent requirements in a specific case when necessary to assure an adequate and satisfactory water supply and sewerage facility for the subdivision. 6 NYCRR 661.11-Variances (Division of Water Resources-Tidal Wetlands-Land Use Regulations) (a) Where there are practical difficulties in the way of carrying out any of the provisions of section 661.6 of this Part or where in the department's judgment the strict application of the provisions of section 661.6 would be contrary to the purposes of this Part, the department shall have authority in connection with its review of an application for a permit under this Part to vary or modify the application of any provisions in such a manner that the spirit and intent of the pertinent provisions shall be observed, that public safety and welfare are secured and substantial justice done and that action pursuant to the variance will not have an undue adverse impact on the present or potential value of any tidal wetland for marine food production, wildlife habitat, flood and hurricane and storm control, cleansing ecosystems, absorption of silt and organic material, recreation, education, research, or open space and aesthetic appreciation. Any person wishing to make application for a variance shall do so in writing in conjunction with his or her application for a permit under this Part and shall specify the proposed variance, which elements of section 661.6 Development Restrictions, relief is sought from, the minimum relief that is necessary, the practical difficulties claimed, a discussion of alternate site possibilities, a discussion of change of project objective possibilities and a discussion of environmental impact reduction and/or mitigation measures to be employed. The burden of showing that a variance to such provisions should be granted shall rest entirely on the applicant.

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6 NYCRR 665.8-Variances From Statewide Minimum Land-use Regulations (Division of Water Resources- Local Government Implementation of the Freshwater Wetlands Act & Statewide Land-use Regulations for Freshwater Wetlands) (a) In accordance with subdivision 24-0903.2 of the act, a local government that has assumed regulatory authority pursuant to this part may submit within six months of receipt, and then annually to the commissioner a proposed variance from the statewide minimum land-use regulations in section 665.7(G) of this Part to govern wetlands within its boundaries. (b) Such a proposed variance must be consistent with the purposes of the act and may be more or less restrictive than the statewide minimum land-use regulations. Where less restrictive, the proposed variance must be accompanied by supporting material setting forth, among other things, that there are overriding economic and social considerations vital to the growth and economic base of the local government that clearly require such variance. 6 NYCRR 666.9-Variances from the Regulations (Division of Water Resources-Regulation or Administration and Management of the Wild, Scenic and Recreational Rivers System in New York State Excepting Private Land in the Adirondack Park ) (a) No variance may authorize any development or improvement prohibited by the act. The department, upon receipt of a written request made in conjunction with a permit application pursuant to this Part, may vary or modify any provision of this Part relating to allowable land uses or development so long as it is the minimum variance necessary and only if: (1) in the case of a request for a use variance, the provision(s) to be varied or modified would cause an unnecessary hardship for the applicant. In order to prove such unnecessary hardship the applicant must demonstrate that: (i) the provision(s) to be varied or modified deprive the applicant of all economic use or benefit from the property in question, which deprivation must be established by competent financial evidence; (ii) the alleged hardship relating to the property in question is unique, and does not apply to a substantial portion of the river corridor; (iii) the requested use variance, if granted, will not alter the essential character of the river corridor; and (iv) the alleged hardship has not been self-created; and (2) in the case of a request for an area variance, the area or dimensional provision(s) to be varied or modified would cause practical difficulty for the applicant. In making its determination, the department will consider the benefit to the applicant if the variance is granted, as weighed against the adverse impacts upon river resources. The department will also consider: (i) whether and to what extent a change will be produced in the character of the river corridor or a detriment to nearby properties will be created by the granting of the area variance; (ii) whether the benefit sought by the applicant can be achieved by some method, feasible for the applicant to pursue, other than an area variance; (iii) whether the requested area variance is substantial; (iv) whether the proposed variance will have an adverse effect or impact on the physical or environmental conditions in the river corridor; and (v) whether the alleged practical difficulty was self-created, which consideration will be relevant to the decision of the department, but will not necessarily 34

preclude the granting of the area variance.In addition to addressing the foregoing considerations, an applicant for an area variance has the option of seeking to prove, by competent financial evidence, that the strict application of the subject provision(s) of this Part will result in significant economic injury. Such evidence will be limited to the effect of such provision(s) upon the value of the property in question; whether the value would be enhanced were a variance granted will not be relevant. If the applicant demonstrates significant economic injury, the burden is on the department to establish that the strict application of the subject provision(s) is reasonably related to the purpose and policy of the act and this Part. (3) in the case of applicants which are State agencies or municipal corporations, the granting of a variance must be equally as environmentally protective of the river values identified in section 666.2(e) of this Part as compliance with the provision(s) to be varied and must fulfill a public health, safety or welfare function. (b) A written request for a variance will contain each of the following: (1) a description of the variance requested; (2) a listing of each standard to be varied; (3) a statement of the minimum relief necessary from each standard to be varied; (4) a map of the area showing the location of the requested variance, proposed mitigation, property boundaries, and adjacent owners of record, if deemed necessary by the department; (5) in the case of a request for a use variance, the applicant may be required to provide financial evidence which may include the following: (i) the rate of return on the property both with and without the requested variance; (ii) the owner's investment in the property, including purchase price, taxes, expenses, carrying costs, and cost of improvements; and (iii) income, if any, produced by the property; (6) a discussion of alternative site possibilities outside the river area; and (7) a discussion of proposals for environmental impact reduction and/or mitigation. Such proposed mitigation must comply with the following: (i) the mitigation must occur on or in the immediate vicinity of the site of the proposed variance if possible; (ii) the location of the proposed mitigation must be subject to regulation under the act and this Part upon completion; and (iii) the mitigation must provide substantially the same or more benefits than will be lost through the proposed activity. (c) Any mitigation required in connection with the grant of a variance will be included as a permit condition and must be completed if other work is commenced. (d) Any land use or development which, but for this subdivision, would require a variance due to noncompliance with one or more specific standards or criteria in this Part, may be permitted by the department without such variance if: (1) the department determines that the project, if approved, will not adversely impact any affected river resource; and (2) the project satisfies all other applicable standards and criteria, including the standards for permit issuance set forth in section 666.8 of this Part.

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For the purposes of this subdivision, a determination of complete application pursuant to Part 621 of this Title shall not preclude the department from requiring an applicant to submit additional information in the event that one or more potential significant adverse impacts are identified and a variance is necessary for the project to proceed. 6 NYCRR 702.17-Variances to Effluent Limitations Based on Standards and Guidance Values (Division of Water Resources- Derivation & Use of Standards & Guidance Values (a) The department may grant, to an applicant for a SPDES permit or to a SPDES permittee, a variance to a water quality-based effluent limitation or groundwater effluent limitation included in a SPDES permit. (1) A variance applies only to the permittee identified in such variance and only to the pollutant specified in the variance. A variance does not affect or require the department to modify a corresponding standard or guidance value. A variance does not affect or require the department to modify a corresponding groundwater effluent limitation for the groundwater as a whole. (2) A variance shall not apply to a new or recommencing discharger in the Great Lakes System unless the proposed discharge is a temporary one that is necessary to alleviate an imminent and substantial danger to the public health or the environment that is greater than the danger from not achieving the standard or guidance value. For the purpose of this Part, an imminent and substantial danger to the public health or the environment shall include, but not be limited to, a significant threat to the environment as defined in Part 375 of this Title. (3) A variance shall not be granted that would likely jeopardize the continued existence of any endangered or threatened species or result in the destruction or adverse modification of such species' critical habitat. (4) A variance shall not be granted if standards or guidance values will be attained by implementing effluent limits required under section 750-1.11(a) of this Title and by the permittee implementing cost-effective and reasonable best management practices for nonpoint source control. (5) A variance term shall not exceed the term of the SPDES permit. Where the term of the variance is the same as the permit, the variance shall stay in effect until the permit is reissued, modified or revoked. (b) A variance may be granted if the requester demonstrates that achieving the effluent limitation is not feasible because: (1) naturally occurring pollutant concentrations prevent attainment of the standard or guidance value; (2) natural, ephemeral, intermittent or low flow conditions or water levels prevent attainment, unless these conditions may be compensated for by the discharge of sufficient volume of effluent to enable the standard or guidance value to be met without violating water conservation requirements; (3) human-caused conditions or sources of pollution prevent attainment of the standard or guidance value and cannot be remedied or would cause more environmental damage to correct than to leave in place; (4) dams, diversions or other types of hydrologic modifications preclude attainment of the standard or guidance value, and it is not feasible to restore the waterbody to its

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original condition or to operate such modification in a way that would result in such attainment; (5) physical conditions related to the natural features of the waterbody, such as the lack of a proper substrate cover, flow, depth, pools, riffles, and the like, unrelated to chemical water quality, preclude attainment of the standard or guidance value; or (6) controls more stringent than those required by section 750-1.11(a) of this Title would result in substantial and widespread economic and social impact. (c) In addition to the requirements of subdivision (b) of this section, the requestor shall also characterize, using adequate and sufficient data and principles, any increased risk to human health and the environment associated with granting the variance compared with attainment of the standard or guidance value absent the variance, and demonstrate to the satisfaction of the department that the risk will not adversely affect the public health, safety and welfare. (d) The requestor shall submit a written application for a variance to the department. The application shall include: (1) all relevant information demonstrating that achieving the effluent limitation is not feasible based on subdivision (b) of this section; and (2) all relevant information demonstrating compliance with the conditions in subdivision (c) of this section. 6 NYCRR 750-1.6-Application to Obtain Individual SPDES Permits (Division of Water Resources-Obtaining a Spdes Permit) (f) A permit for a sewage disposal system or approval of a sewer extension serving or intended to serve more than one separately owned property shall be issued only to either a governmental agency, municipality, or sewage disposal corporation formed and regulated pursuant to article 10 of the Transportation Corporations Law. The commissioner may, on written application, grant a variance from this provision in a particular case, subject to appropriate conditions, including bonding requirements, where such variance is in harmony with the general purposes and intent of this Chapter.

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EXHIBIT C