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Fund from drilling fees proposed to pay for damage from 'fracking'

State Comptroller Thomas DiNapoli proposed Tuesday establishing a fund supported by fees from natural gas drillers to clean up environmental damage from high-volume hydraulic fracturing.

The program, which would require legislation and also apply to current drilling operations, would be similar to the existing state fund for oil spills.

DiNapoli hasn't specified amounts for the gas drilling fund and fees, decisions that would be left to the Department of Environmental Conservation. His proposed bill would also require anyone engaging in natural gas production in New York to post a bond to cover potential contamination liability.

"The only current remedy for private citizens who suffer damages to their property from natural gas production is to enter into litigation, which has the potential to be costly, difficult and slow," DiNapoli said.

The DEC last month proposed regulations to permit hydraulic fracturing, or "fracking," in most of the state's potentially lucrative Marcellus Shale formation across the Southern Tier but prohibited it in the New York City and Syracuse watersheds, on state land and within primary aquifers.

The technology extracts natural gas from shale by pumping water, chemicals and sand into the ground to create fissures in the rock and release the gas.

The DEC plans to issue revised draft rules by late this month, accept more public comments for 60 days and issue final rules, now expected next year.

Brad Gill, executive director of the Independent Oil & Gas Association of New York, said DiNapoli's proposal seemed premature and doesn't take into account existing permit requirements that address bonding for site reclamation or existing law that holds businesses accountable.

He said the industry has a good environmental record in New York. "There is simply no basis for such a fund at this time," he said.

Several environmental groups said DiNapoli's proposal recognizes "the risks of dirty drilling, including those inherent in every phase of hydrofracking, from trucking dangerous fluid to drill sites, to transporting resulting wastewater through our communities," and New York's "bedrock principle" that polluters pay to clean up their own messes.

Assemblyman Robert Sweeney, a Long Island Democrat who heads the Assembly Environmental Conservation Committee, expects overwhelming support for the proposal in the Democrat-controlled Assembly.

Lawmakers, whose session ended in June, may return in the fall to approve public employee contracts should the unions accept them. Sweeney said it's not clear whether they would consider this or any other legislation then.

A spokesman for the State Senate Republican majority had no immediate comment.

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