By Brian Nearing

ALBANY -- Gov. David Paterson signed a law Wednesday that makes it easier for natural gas companies to use an environmentally risky underground drilling technique, promising his administration will also give regulators more power to prevent damage that has occurred in other gas-producing states.

"This new law will ensure greater efficiency in the processing of requests to permit oil and gas wells, while maintaining environmental and public health safeguards," said Paterson in a statement.

Natural gas companies are racing to lock up drilling rights in the state as the price of natural gas increases along with other fossil fuels. The companies hope to drill in an area of western New York and the Southern Tier where underground gas deposits are trapped in a deep layer of rock known as Marcellus shale.

However, the environmental protections that the governor promised are not contained in the law. Rather, they consist of future plans for beefed-up regulations at the Department of Environmental Conservation.

Paterson ordered the DEC to update a 16-year-old regulation -- a generic environmental impact statement that addresses gas drilling -- to reflect the perils of the current drilling technique, known as hydrofracking.

In states such as New Mexico and Colorado where this method has been used, groundwater around hundreds of wells has been tainted with a brew of hydrocarbons and toxic chemicals.

Hydrofracking involves drilling underground up to 9,000 feet into shale formations. A high-pressure injection of water, sand and chemicals is sent down the well, where it fractures rock and releases the gas bubbles, which are drawn up through the well.

The water -- up to 6 million gallons for each well -- is then extracted and stored in open pits for later treatment as toxic waste. The U.S. Department of Energy lists water from gas drilling as among the most toxic of any oil industry byproduct.

On Wednesday, Judith Enck, Paterson's deputy environmental secretary, said the state will update its impact statement rules, which will define how companies can exploit gas deposits, to reflect hydrofracking techniques that did not exist when rules were first written.

The update will examine potential impacts from new horizontal drilling techniques, in which wells are drilled at angles, as well as potential impacts to groundwater, surface water, wetlands, air quality, aesthetics, noise, traffic and community character, she said.

Also, rules will apply not just to individual well projects, but also to the combined impact of numerous wells "in case we start seeing problems," said Enck.

She said a proposed "scoping document," which will lay out details that could be in the impact statement, will be written by DEC staffers and offered for public review at hearings sometime this fall. The final impact statement regulations should be in place by next spring, Enck added.

Josh Nachowitz, state policy director for the New York League of Conservation Voters, who had been calling for Paterson to veto the law, said the governor was taking "a step in the right direction. It is clear that the administration had recognized the validity of the concerns raised by the environmental community."

DEC officials indicated that gas companies that race to file applications before new rules are in place won't face less scrutiny.

"We expect that the handful of pending permit applications for horizontal drilling in the Marcellus shale will be subject to the supplement to the GEIS when finalized, or will undergo individual comprehensive environmental reviews on a parallel path if the permit is processed before the supplement has been finalized," said DEC spokeswoman Maureen Wren. "In either event, no permit will be issued without a complete environmental review of the specific issues raised by horizontal drilling."

However, the DEC will have much additional work to do beyond what the new law required, including looking at how many regulators it has for well permits, as well as rules that control how gas companies can tap into water for hydrofracking.

So far, the DEC has received three drilling applications, from Fortuna Energy Inc., of Horseheads, N.Y.; Nornew Inc., of Houston, Texas; and Chesapeake Appalachia LLC, an Oklahoma-based company, for wells in Chenango, Tioga, and Chemung counties.

Many more applications are likely to flood in over the coming months as gas companies continue to buy thousands of acres of drilling rights over the last year.

On July 31 and Aug. 1, for example, officials from XTO Energy expect to sign $21.6 million in contracts with residents around Deposit in Delaware County to lease 9,000 more acres, according to a published report in the Binghamton Press & Sun-Bulletin.