Gov. David Paterson has vetoed a moratorium on hydraulic fracturing, a controversial natural gas drilling method, but replaced it with an executive order prohibiting the practice until July at the earliest. 

At the heart of the issue is a specific method known as high-volume horizontal hydraulic fracturing, or "hydrofracking," in which millions of gallons of water, sand and chemicals are blasted into existing wells to release gas deposits far below the surface. Industry officials are eyeing the vast Marcellus Shale, which extends from New York's Southern Tier into West Virginia, as a prime site for this type of extraction. 

The moratorium bill would have banned all types of gas drilling, not just horizontal hydrofracking, until May 15. Paterson said the bill was too broad and would have resulted in job losses and decreased revenue for the cash-strapped state.

"Enacting this legislation would put people out of work - work that is permitted by the Department of Environmental Conservation and causes no demonstrated environmental harm, in order to effectuate a moratorium that is principally symbolic," Paterson said.  "Symbols can have great importance, but particularly in our current terrible economic straits, I cannot agree to put individuals out of work for a symbolic act."

Paterson replaced the vetoed bill with an executive order that narrows the scope of the moratorium to include only horizontal hydrofracking, and not its vertical counterpart of other extraction methods. The ban will stay in effect until at least July 1, when the Department of Environmental Conservation is set to release the results of a study into the effects of hydrofracking on water and air quality.

Assemblyman Kenneth Zebrowski, D-New City, says he belives Paterson should have signed the moratorium bill as the best method of protecting drinking water and the environment.

"However, I am happy the governor recognized the potential hazards of this activity and has placed a ban on certain drilling permits through an executive order," Zebrowski said. " I encourage Governor Paterson to ensure that the state DEC has the proper resources to carry out their review of "hydrofracking" drilling in New York State."

Environmental groups gave the move cautious approval, lauding the governor for acting on the issue but warning that vertical hydrofracking can be just as harmful as horizontal drilling.

"Governor Paterson has acknowledged that fracking poses serious threats to our health and our safe drinking water, but his moratorium only protects us so much. While he has called time-out on some kinds of drilling, there's a gaping loophole remaining that leaves New Yorkers at risk from the dangers of fracking," said Kate Sinding of the National Resources Defense Council. 

Vertical drilling, she said, utilizes the same potent cocktail of chemicals that has been identified as the culprit in groundwater contamination in Pennsylvania, Colorado and several other states. Further, vertical wells can be converted into horizontal wells, meaning Paterson's order could give gas companies a giant loophole through which they can still eventually begin horizontal hydrofracking.

"Because it may be harder to deny permits for horizontal wells once vertical wells are drilled, there is a risk that companies could do an end-run around the on-going environmental review process," Sinding said, adding that while "only one horizontal well can be drilled per square mile, 16 vertical wells could occupy the same area, carrying with them significant additional surface disturbance and environmental impacts."

While environmentalists gave Paterson's order a tepid response, industry officials are applauding the move.

"We are very pleased that the governor saw the bill for what it was; a flawed piece of legislation replete with unintended and dire consequences for the people and businesses in our industry," said Brad Gill, head of the Independent Oil and Gas Association of New York, a trade group. "We're hopeful that the governor's veto will set the stage for a more reasoned and rational public discussion about these issues going forward."

Gill and other officials have maintained that the purported negative effects of hydrofracking have been exaggerated by environmentalists and the media, through such mediums as the hit HBO documentary Gasland. They also suggest that the financial situation in New York and other states is too dire to suspend gas drilling because of a handful of negative results out of the thousands of horizontal wells that have been drilled nationwide. 

The issue is particularly contentious upstate, where the oil and gas industry is one of the few remaining economic engines in a region rocked by high unemployment.

"Through this veto the governor has saved an important sector of the upstate economy," said Brian Sampson, executive director of the trade group Unshackle Upstate. "[Paterson] recognized that the legislation's technical flaws would have shut down numerous small businesses across the Southern Tier. These are businesses that have operated in an environmentally safe manner for years, if not decades."

Sinding, the environmentalist, said that she's hopeful that incoming Gov. Andrew Cuomo will take the lead on the issue and close the "loophole" left open by Paterson's order. 

"With Paterson on his way out, and powerful oil and gas corporations still eyeing our backyards, it will be up to the incoming governor to close the loophole and follow through on protecting our future," Sinding said. "We're counting on Cuomo to make sure our health and environment are protected from the very real threats knocking on our door."

A spokesman for Cuomo was not immediately available for comment. During his campaign for governor, Cuomo said that he is sensitive to the environmental issues surrounding gas drilling, but did not single out any particular methods that he would prohibit or investigate.