New York City officials have demanded a ban on natural gas drilling near upstate reservoirs because they fear the drilling could contaminate the city’s drinking water.

They’ve asked the state Department of Environmental Conservation to establish a one-mile protective perimeter around each of the city’s six major Catskill reservoirs and connecting infrastructure — a buffer that would put at least half a million acres off-limits to drilling. They also want to wrest more regulatory control from Albany.

New York is one of just four major cities in America with a special permit allowing its drinking water to go unfiltered, and that pristine water comes from a network of reservoirs and rivers in five upstate counties. If the special permit was revoked, the city would have to build a treatment facility that could cost nearly $10 billion, a senior official at the U.S. Environmental Protection Agency, Walter Mugden, said. That’s roughly what the state estimated it would earn from gas development during the nxt decade.

The commissioner of the city Department of Environmental Protection, Emily Lloyd, in a letter to state officials that was obtained by ProPublica, said she was not satisfied with the state’s assurances that the environment would be protected from drilling in the Marcellus Shale, a layer of rock that reaches up to 9,000 feet below much of the Appalachian east, including south-central New York State and the 2,000-square-mile watershed.

The letter doesn’t offer any specifics on how drilling might taint the city’s water or explain the basis for the one-mile buffer, but it makes clear that as guardians of New York’s water, city officials view drilling as a serious threat to the tap water supply for 9 million downstate residents. It could involve thousands of gas wells producing billions of gallons of toxic wastewater.

Ms. Lloyd asked that a state, city, and federal working group be formed to reassess regulations in the watershed and to recognize it “as a unique resource requiring special protection.” She called for the city to be given a say in the state’s permit review process, and for the public to be allowed to comment on each well’s permit, something that is not now guaranteed.

The Marcellus Shale is among several large new gas reserves in America that have become economically viable in a time of record oil and gas prices. A geologist at Penn State University, Terry Engelder, said he believes it could meet all the nation’s natural gas needs for two years. The Department of Environmental Conservation, which oversees exploration, has estimated that Marcellus development could add as much as $1 billion a year to the state’s economy.

A prolonged regulatory debate, though, could threaten that income.

“If the state process involves a lot of concurrence with other agencies or environmental reviews along the line, it can create potential for considerable delay,” the vice president of government relations for the Independent Petroleum Association of America, Lee Fuller, said. He added that the process could “really affect the cost of development and the schedule of development and the willingness of some producers to engage in that development.”

The environmental consequences of developing Marcellus wells on a large scale could be severe. Getting the gas involves a process called hydrofracking, or shooting millions of gallons of water and drilling chemicals at explosive pressure deep underground to break up the rock, and drilling the Marcellus would require more water than most other types of drilling. The identity of the chemicals, which are sometimes toxic, is protected as a trade secret, making it difficult to assess how wastewater can be safely treated and discharged. Drilling in other states has resulted in more than a thousand wastewater spills that have affected drinking water.

An investigation last month by ProPublica and WNYC public radio found that New York State had not adequately assessed the environmental risks and did not have a complete regulatory structure in place to determine where the immense amounts of necessary water would come from, or how it would be disposed of after it was used. It found that New York State did not know the chemical contents of the drilling fluids that would be used, and was not aware of the level of contamination in other states.

Governor Paterson last week ordered the DEC to update the 16-year-old environmental impact assessment it was relying on and pledged to require the industry to disclose the chemicals it uses. He did not promise to stop drilling from going forward in the meantime.

“If you are ranking areas of concern that need extremely careful protection,” the New York watershed “would have to be at the top of anybody’s list,” the EPA’s Mr. Mugden said. “More than half the state … depends on that watershed on a daily basis.”

The city was not brought into the gas drilling conversation until mid-July, even though state officials had been working on the issue for seven months. The city sent a letter to state officials raising concerns about a new well-spacing bill that was before the governor, and Ms. Lloyd requested special consideration for the watershed a few days later.

Both the state and the city have tried to keep their negotiations private. A DEC spokesman said the agency works closely with the city, and the city responded in kind.

“DEC has given us every assurance we have asked for … that the environmental review will be very stringent, that we will be at the table throughout the process, and that protecting water quality is their first priority as well as ours,” Ms. Lloyd said through a spokesman Friday.

City Council Member James Gennaro, chairman of the city’s committee for environmental protection, wants the city to go further. He is calling for a complete moratorium on drilling anywhere in the Catskill watershed, which provides 90% of New York City’s water and also makes up the heart of the Marcellus deposit. He said he will ask the EPA to conduct its own study of the threat drilling poses to the city’s drinking water.

“I just don’t think it’s a proper activity for an area which is the city of New York’s most precious capital asset,” he said. “I think it poses a risk. I think they are going to say quite candidly that it is a problem. Let the federal government go on record.”

The face-off pits the city’s interests against the broader economic needs of the state, so its solution may not be simple, according to an attorney with the Natural Resources Defense Council, Eric Goldstein. Gas leases are selling for as much as $3,000 an acre in parts of the state with stagnant economies.

The historic upstate-downstate friction can be attributed at least in part to the controversy over New York City’s acquisition of the watershed lands in the early 1900s, Mr. Goldstein said. “Those were pure eminent domain takings; thousands of residents were moved, towns were relocated, cemeteries dug up, and bodies reinterred. Obviously some tensions have remained.”

Mr. Goldstein said New York City may have the law on its side, because the state’s public health law gives it a lever to set pollution controls in the watershed. But unilateral action would be a last resort. Instead, the city is more likely to search for a cooperative solution that leaves the door ajar for upstate economic growth while still saving the city’s water.

“You could say that from a legal standpoint they have authority,” Mr. Goldstein said. “How and whether they might choose to use it is another question.”

ProPublica is an independent, nonprofit newsroom that produces investigative journalism in the public interest. Mr. Lustgarten is a reporter at ProPublica and author of a new book, “China’s Great Train: Beijing’s Drive West and the Campaign to Remake Tibet.” This story can also be accessed at ProPublica’s website.