This just in: The DEC has declared that their draft regulations on natural-gas drilling don't apply to New York City's watershed. (Or, for that matter, Syracuse's Skaneateles Lake watershed, also among a handful of water systems in the nation allowed by the EPA to operate without filtration.) From the New York Times:

While not an outright ban, state officials said, leaving the watersheds out of the regulatory plan would make it virtually impossible for a natural gas company to seek to drill in the watershed because of the costs and bureaucratic hurdles involved.