Norse Energy Corporate_Presentation_110724.pdf (application/pdf Object)

Corporate_Presentation_110724.pdf (application/pdf Object).

Norse Energy Plans for New York

Hydrofracking comment period to start in ‘late summer,’ DEC says

pressconnects.

Mon, Aug 1, 2011  |  Updated: 10:36 PM

Hydrofracking comment period to start in ‘late summer,’ DEC says

August 1, 2011

ALBANY — The public will likely have to wait until September to get its say on the state’s review of the controversial hydraulic fracturing process for natural gas drilling.

The Department of Environmental Conservation received a report late last month from a Buffalo-based consulting company that proposes ways to limit the effects on communities and municipalities from an anticipated spike in activity by the natural gas industry.

The department now is considering how to plug the consultant’s recommendations into its own proposed regulations, spokeswoman Emily DeSantis said Monday. After that, an updated draft of DEC proposals will be made public and opened up to a 60-day comment period by “late summer,” likely beginning in September, she said.

The comment period was originally expected to start this month.

“What we’ve been saying all along is that there is no firm time frame for this,” DeSantis said. “We’re taking the time to make sure this is done right.”

The DEC’s recommendations for curbing the environmental impact of high-volume hydrofracking — a method involving the injection of a mix of water, sand and chemicals deep into gas-rich underground shale formations — have been three years in the making.

An initial draft review received 13,000 comments and packed auditoriums at public hearings in 2009.

Ecology and Environment Inc. was hired by the DEC earlier this year to highlight both the positive and negative socioeconomic effects of natural gas drilling in the Marcellus and Utica shale formations, which sit beneath the Southern Tier and other portions of New York.

The company’s report, which will be made public when the comment period opens, was also set to include an analysis of visual and noise impacts from the industry, as well as the effects of increased truck traffic on the state’s infrastructure.

Katherine Nadeau, water and natural resources program director for Environmental Advocates of New York, said she hopes the consultant’s study considers human health.

“Part of what we’re hoping to see here is some assessment of human health impacts,” Nadeau said. “This is not something that has been included anywhere else in the (DEC) document, and it’s something that concerned citizens across the state have been calling for.”

The DEC also hasn’t made a final decision on whether or not to host public hearings on its latest draft review. That decision will be announced when department officials have a better handle on the time frame of the public-comment period, DeSantis said.

Scott Kurkoski, an attorney representing the Joint Landowners Coalition of New York, said the coalition’s members are urging the DEC not to host another round of hearings.

Hydrofracking-related hearings across the Southern Tier have at times attracted large protests and heated rhetoric.

“These public hearings are used for political reasons and end up being circus atmospheres,” Kurkoski said. “The good, substantive comments can be put in writing and sent to the DEC, and we know the DEC will really be able to look at all of those substantive comments.”

“From the landowners’ point of view, we just want the DEC to stay on track and to have this released in a timely manner,” he continued.

Nadeau disagreed, calling public hearings an “incredibly important part of the public process.”

“Public hearings are a really important vehicle for everyone who wants to be heard to have their comments heard and to be counted on the record,” Nadeau said.

Permits for high-volume hydrofracking won’t be issued until a final version of the DEC report is complete, which isn’t expected until some point next year, according to the department.

Local Business Impacts of Marcellus Shale Development: The Experience in Bradford and Washington Counties, 2010business-impacts-2011.pdf (application/pdf Object)

business-impacts-2011.pdf (application/pdf Object).

Local Business Impacts of Marcellus Shale
Development: The Experience in Bradford
and Washington Counties, 2010

State Tax Implications of Marcellus Shale: What the Pennsylvania Data Say in 2010

ua468.pdf (application/pdf Object).

State Tax Implications of Marcellus Shale:
What the Pennsylvania Data Say in 2010

Review & Outlook: A Tale of Two Shale States – WSJ.com

Review & Outlook: A Tale of Two Shale States – WSJ.com.

Politicians wringing their hands over how to create more jobs might study the shale boom along the New York and Pennsylvania border. It’s a case study in one state embracing economic opportunity, while the other has let environmental politics trump development.

The Marcellus shale formation—65 million acres running through Ohio, West Virginia, western Pennsylvania and southern New York—offers one of the biggest natural gas opportunities. Former Pennsylvania Governor Ed Rendell, a Democrat, recognized that potential and set up a regulatory framework to encourage and monitor natural gas drilling, a strategy continued by Republican Tom Corbett.

More than 2,000 wells have been drilled in the Keystone State since 2008, and gas production surged to 81 billion cubic feet in 2009 from five billion in 2007. A new Manhattan Institute report by University of Wyoming professor Timothy Considine estimates that a typical Marcellus well generates some $2.8 million in direct economic benefits from natural gas company purchases; $1.2 million in indirect benefits from companies engaged along the supply chain; another $1.5 million from workers spending their wages, or landowners spending their royalty payments; plus $2 million in federal, state and local taxes. Oh, and 62 jobs.

Statistics from Pennsylvania bear this out. The state Department of Labor and Industry reports that Marcellus drilling has created 72,000 jobs between the fourth quarter of 2009 and the first quarter of 2011. The average wage for jobs in core Marcellus shale industries is about $73,000, or some $27,000 more than the average for all industries.

The Pennsylvania Department of Revenue says drillers have paid more than $1 billion in state taxes since 2006—and the numbers are swelling. In 2011’s first quarter, 857 oil and gas companies and affiliates paid $238 million in capital stock and foreign franchise taxes, corporate income taxes, sales taxes and employer withholding. This exceeds by some $20 million the total payments in 2010.

The revenue department also identified some $214 million in personal income taxes paid since 2006 that can be attributed to Marcellus shale lease payments to individuals, royalty income and asset sales. And all of this with no evidence of significant environmental harm.

***

Then there’s New York. The state holds as much as 20% of the estimated Marcellus shale reserves, but green activists have raised fears about the drilling technique known as hydraulic fracturing and convinced politicians to enact what is effectively a moratorium.

Getty Images

A Minard Run Oil Company drilling team lowers steel pipe sections into a recently drilled 2100 foot gas well to “notch” the side walls before a high pressure fracturing takes place in Pleasant Valley, Pennsylvania in 2008.

The Manhattan Institute study shows that a quick end to the moratorium would generate more than $11.4 billion in economic output from 2011 to 2020, 15,000 to 18,000 new jobs, and $1.4 billion in new state and local tax revenue. These are conservative estimates based on a limited area of drilling. If drilling were allowed in the New York City watershed—which Governor Andrew Cuomo is so far rejecting—as well as in the state’s Utica shale formation, the economic gains would be five times larger.

Consider New York’s Broome County, which borders Pennsylvania and from which you can spot nearby rigs. The county seat of Binghamton ought to be a hub for shale commerce, but instead its population is falling as its young people leave for jobs elsewhere.

A study commissioned by the county in 2009 found that Broome could support up to 4,000 wells, but drilling even half that number would create some $400 million in wages, salaries and benefits; $605 million in property income from rents, royalties and dividends, and some $43 million in state and local tax revenue.

The Broome analysis pointed to Texas, where Chesapeake Energy paid Dallas Fort Worth International Airport $180 million for drilling rights on 18,000 acres of airport property—$10,000 per acre. The airport receives a 25% royalty on the natural gas produced by airport wells—more than $28 million in fiscal 2008. The study also noted the boon that rising oil and gas property values have been to Texas landowners, tax authorities and school districts.

***

Governor Cuomo has said he wants to lift New York’s moratorium, and the state’s recently released draft rules are a step forward. But they must still undergo legal review and a public comment period that could bar New York drilling for the rest of this year, if not longer. New York will also still ban drilling in about 15% of the state’s portion of the Marcellus and impose more onerous rules than other states on private property drilling. Such bows toward the obsessions of rich, big-city greens explain why parts of upstate New York are the new Appalachia.

As they look across their northern border, Pennsylvanians can be forgiven for thinking of New Yorkers the way Abba Eban once described the Palestinians: They never miss an opportunity to miss an opportunity.