As in many of the political contests being decided next Tuesday, the race for New York governor between Democrat Andrew Cuomo and Republican Carl Paladino has had as much substance as a lemon meringue pie—and much more of a bitter aftertaste. There has been mudslinging about personal lives and shouting matches with reporters. The petty bickering has obscured a host of serious issues facing the Empire State, of which few are as consequential for small business as natural-gas drilling.

I know, the green vistas of upstate New York don’t generally conjure up images of drilling rigs. But much of western New York State lies above the Marcellus Shale geographic formation, a vast stretch of sedimentary rock that runs between central New York State and northern Alabama. The shale beds below Pennsylvania and New York are believed to harbor immense reserves of natural gas—easily one of the largest in the world. This has led to a hot local debate over whether New York should throw out the welcome mat to gas drilling.

Supporters of natural-gas drilling, such as many Upstate farmers, contend that natural-gas drilling will give a substantial boost to local economies. Opponents of gas drilling contend that it will actually hurt the economy of rural New York by diminishing the tourism and real estate industries.

The problem is that it takes a process known as “hydraulic fracturing” to remove gas from the shale formations. That involves injections of water and chemicals deep underground, and environmentalists have contended that it is a technique that cannot be done safely. Environmentalists point to contamination of drinking water from a natural-gas well in Dimock, a town in northern Pennsylvania. Environmental concerns were recently aired in an HBO documentary, Gasland.

Natural-gas drilling is a quintessential hot potato, since it pits local residents against each other and could alienate farmers, many of whom would like to lease their farms to gas-drilling companies such as Chesapeake Energy Corp. and Cabot Oil and Gas. One reason it’s quite so hot is that the incumbent governor, David Patterson, hasn’t taken a strong stance for or against natural-gas drilling. That puts this issue on the lap of his successor.

Since Cuomo is the clear favorite in the race, his position on this issue is likely to translate into policy over the next four years—and will have major implications in the national debate over the safety of hydraulic fracturing. And here, Cuomo seems to be staking out a position that puts him, more or less, in the anti-gas-drilling camp. His “Power NY” energy-position paper begins by sounding like an energy-company press release, saying that development of that resource “needs to be highly sensitive to environmental concerns.” But he goes on to say that “it is critical that no drilling be conducted that might negatively affect any existing watershed and that best practices in drilling are adopted and enforced by the State.”

Since much of the natural-gas drilling in New York takes place in watershed areas—the New York City watershed in the Catskills and the Delaware River watershed bordering Pennsylvania—that’s a pretty strong condition. At a recent debate with Paladino, Cuomo made it plain that the safety of hydrofracturing would have to be proved first, and that watersheds are “sacrosanct.”

As attorney general, Cuomo didn’t deal with gas drilling, but gained a reputation as being tough on Wall Street. He garnered gobs of publicity in early 2009 for issuing subpoenas that extracted confidential data from AIG Group and Merrill Lynch on their lavish executive bonuses.

The move succeeded in raising Cuomo’s visibility. Just this past May, Cuomo’s office was investigating whether eight major banks provided misleading information to banks in order to inflate their credit ratings. Cuomo has also made his mark in the pay-to-play pension mess by prosecuting former New York State controller Andrew Hevesi, a fellow Democrat, who pleaded guilty to a felony corruption charge.

But all this pales when compared with the economic and political impact of natural-gas drilling. Will Cuomo be as hard-nosed in opposing gas drilling as his statements suggest? I tend to doubt that, because it is an issue in which the support of natural gas is as emotionally charged as the opposition. As one Upstate farmer put it, signing a gas lease can be a like “winning the lottery” for the hard-pressed farmers. By leasing 200 acres, the farmer could reap $1 million in upfront fees plus 20 percent royalties on drilling profits. Drilling opponents, meanwhile, emphasize the safety issues and the impact on small businesses that don’t benefit directly from drilling. These could “crash down” if drilling comes to the region, one small-business person has pointed out.

So the battle lines are drawn, and Cuomo will have no choice but to wade into a situation in which he is guaranteed to make enemies no matter what he does. After a few months dealing with that hot issue, he may yearn for the days when all he had to do to get risk-free headlines was to subpoena a few bankers.