I've been getting a quick education about this, went to a DEC public hearing that got rather heated, and it's quite the hot topic in the Southern Tier (south-central NY state). (edit to explain water angle in title)
Article in Albany Times-Union:
Upstate New York's looming natural gas nightmareRegulators asleep as lawmmakers attempt to declare vast acreage open to the energy industry's iffy underground fracturing technique
By ABRAHM LUSTGARTEN, ProPublica / Special to the Times Union
First published: Tuesday, July 22, 2008
On May 29, top state environmental officials assured state lawmakers that plans to drill for natural gas near the watershed that supplies New York City's drinking water posed little danger.
A survey of other states had found "not one instance of drinking water contamination" from the water-intensive, horizontal drilling that would take place across New York's southern tier, the officials said.
Reassured, the legislature quickly approved a bill to streamline the permitting process for a huge influx of wells which could bring the state upwards of $1 billion in annual revenue. Gov. David Paterson has only until Wednesday to sign the bill, and the state's Department of Environmental Conservation says drilling permits could be approved in as little as 12 weeks.
But a joint investigation by ProPublica and New York City public radio station WNYC revealed hundreds of instances of drinking water contamination in states where comparable drilling has been done.
n New Mexico, oil and gas drilling using waste pits like those proposed for New York has caused toxic chemicals to leach into the water table at some 800 sites. Colorado has reported more than 300 spills affecting its ground water.
DEC officials told ProPublica and WNYC they were not aware of those incidents, even though that information could have been found through a rudimentary internet search. They apparently hadn't understood that the new drilling techniques pump trace amounts of toxic chemicals into the ground, and they couldn't say for sure how New York would dispose of the millions of gallons of hazardous fluids that are the byproducts of this type of drilling. Four days after one interview, the DEC sent a letter to the drilling companies asking for detailed information about the type and amount of chemicals they will use.
continues at link
http://www.timesunion.com/ASPStories/storyPrint.asp?StoryID=705332