Marcellus shale drilling is a big issue here in central Pennsylvania. I live downstream from the shale beds (they end just north of here), and Rendell just laid off a lot of Department of Environmental Protection workers at a time when gas extraction is gearing up. The hydraulic extraction process used to get gas out of the shale produces large quantities of water contaminated with toxic substances. The contaminated water is supposed to be contained and cleaned up before it is released, but already there are reports of contaminated wells in drilling areas. The state says that the DEP cuts won't affect oversight of the gas extraction efforts, but I have a hard time believing that given the scale of those cuts. I'll just have to drink more wine and less water.
As I hear it, there is concern in New York about the effects of gas extraction on the New York City water supply. Though New York seems to have handled the whole Marcellus shale thing in a more organized way than PA did...