The federal Environmental Protection Agency has told the state that "essential environmental protection measures" must be taken before allowing The Chesapeake Energy Corporation to drill for gas within the 2,000- square-mile Catskills watershed that provides drinking water to millions of NYC residents. The EPA's letter to the State Department of Environmental Conservation reinforces criticism of the plan to blast huge volumes of water mixed with chemicals into rock to extract gas. There is worry that the drilling, which creates large amounts of wastewater, could contaminate NYC's water supply. Katherine Nadeau at Environmental Advocates of New York described the federal agency’s letter as “nothing short of awesome.”

The Times has a pdf of the letter, in which the EPA recommends "a very cautious approach in all watershed areas." A spokesman for Mayor Bloomberg says the state’s environmental impact statement is "flawed and should be rescinded. It does not adequately address the risks to the city’s drinking water." The DEC has not made a final decision on whether to allow Chesapeake Energy to drill in the watershed, and a spokesman says, "At this time we are still taking input from the public and it would not be appropriate to respond to specific comments."

Water from the upstate reservoirs has been consistently clean enough to enable the city to use it without extensive filtration, but the city's DEP commissioner says the drilling would force New York to build a $10 billion water filtration system to combat any contamination. Such a change could result in 30% increase in New Yorkers' water bill, the city DEP predicts.