Cooperstown Brewer Fights N.Y. Fracking Sought by EOG Resources uom

Cooperstown Brewer Fights N.Y. Fracking Sought by EOG Resources
2011-08-22 04:00:02.1 GMT

By Jim Efstathiou Jr.
Aug. 22 (Bloomberg) — Brewery Ommegang says Belgian ale
and natural gas don¹t mix.
That statement of the obvious matters, the maker of
Aphrodite Ale and Hennepin Farmhouse Saison says, because the
water it draws from aquifers beneath Cooperstown, New York, is
at risk of pollution from hydraulic fracturing.
³Even our strongest beer is 90 percent water, and all of
our water comes off the property,² Larry Bennett, a spokesman
for the brewery about 170 miles (274 kilometers) northwest of
Times Square, said in an interview. ³If you contaminate an
aquifer, it¹s done. There¹s nothing you can do about it.²
Ommegang, an Otsego County tourist attraction along with
the National Baseball Hall of Fame and Museum, has joined a
growing grass-roots campaign in New York state to ban the
technology that has transformed U.S. gas production, Bloomberg
Government reported. The brewery, a unit of Belgium-based Duvel
Moortgat NV, says it would face a ³material threat² from a
leak of fluid used in hydraulic fracturing, or fracking, to free
natural gas from shale.
The state is poised to issue final drilling rules and
permits to tap into the Marcellus Shale formation sometime next
year, after a three-year review. In anticipation, drilling bans
have been put in place in 13 towns and are being debated in 19
more, according to Karen Edelstein, a geographic information-
systems consultant in Ithaca. Ommegang has chipped in $40,000 to
support the towns in Otsego County.

Cuomo¹s Role

³Governor Andrew Cuomo is pressuring regulators to finish
their review and to start issuing permits,² Helen Slottje, an
attorney with the Community Environmental Defense Council, Inc.
in Ithaca who has helped towns opposed to drilling, said in an
interview. Towns are ³increasingly aware of the great burden
gas drilling imposes on communities and are unwilling to bear
those costs,² she said.
Cuomo, a Democrat, said during his campaign last year that
fracking would create jobs, ³but only if it is safe.² Since
taking office in January, he has pushed regulators to complete
their environmental review.
Companies such as EOG Resources Inc., a Houston-based gas
and oil explorer, have leased property in towns that banned
drilling or are working to block it, according to documents on
file with the Otsego County clerk. EOG doesn¹t provide a
breakdown of its lease holdings by state or by county, company
spokeswoman K Leonard said in an e-mail.
Millions of gallons of chemically treated water are forced
underground in fracking to break up rock and let gas flow.
Technological advances led the Energy Department to more than
double its estimate of U.S. shale-gas reserves to 827 trillion
cubic feet and to project that the nation now has enough natural
gas to heat homes and run power stations for 110 years.

Schneiderman Subpoenas

Last week, Range Resources Corp., Cabot Oil & Gas Corp. and
Goodrich Petroleum Corp. were subpoenaed by New York Attorney
General Eric Schneiderman over whether they accurately
represented the profitability of their natural-gas wells,
according to a person familiar with the matter. The subpoenas,
sent Aug. 8, requested documents on formulas used to project how
long the wells can produce gas without new fracking.
In Pennsylvania¹s portion of the Marcellus Shale, which
stretches from Tennessee to New York, drilling has created
overnight millionaires from lease payments and gas royalties
paid by companies such as Chesapeake Energy Corp. and Talisman
Energy Inc.
³I have landowners already under lease,² Scott Kurkoski,
a Binghamton, New York-based lawyer who represents property
owners across the state who favor drilling, said in an
interview. ³They have a contract with a company prepared to
market their minerals, and now towns are taking it away.²

ŒPlenty of Places¹

No local initiatives to ban fracking have been offered in
Tioga, Broome and Chemung counties, which border Pennsylvania
and are potentially gas-rich areas, according to Kurkoski.
³My instinct is that there¹s still plenty of places that
are receptive to drilling and that they¹ll go to those places
first,² Joe Martens, commissioner of New York¹s state
Department of Environmental Conservation, which is drafting
drilling rules, said in an interview. ³That¹s kind of the
responsible approach.²
The U.S. Environmental Protection Agency is studying the
effects of fracking on drinking water. A committee advising U.S.
Energy Secretary Steven Chu said Aug. 11 that gas companies risk
causing serious environmental damage unless they commit to best
practices in engineering.

Produced Safely

Industry groups such as the Hamburg-based Independent Oil &
Gas Association of New York, say shale gas can be produced
safely while generating jobs and tax revenue.
Environmental groups are succeeding in some towns by
raising fears over the technology, according to Richard Downey
of Otego, 76, a retired official with New York City¹s schools.
Downey leads an Otsego County landowner¹s group that supports
fracking in the towns of Unadilla, Butternuts and Otego.
³They have the environmental religion,² Downey said in an
interview. ³They are protecting Gaea — Mother Earth — and
we¹re just protecting property rights, and some money to a
certain extent, and you don¹t get the same passion for that.²
The Marcellus Shale may contain 490 trillion cubic feet of
gas, making it the world¹s second-largest gas field after the
South Pars formation in Iran and Qatar, according to Terry
Engelder, a professor of geosciences at Pennsylvania State
University in State College. New York banned fracking until it
completes its environmental rules sometime next year, according
to Emily DeSantis, a spokeswoman with the Department of
Environmental Conservation.

Court Challenge

Landowners that have leased property for drilling will
challenge local drilling bans in court on grounds that only the
state can regulate oil and gas production, Kurkoski said.
Slottje said the bans will hold up because zoning rules
aren¹t considered regulation under New York law.
Both sides expect the issue to be decided in the New York
Court of Appeals, the state¹s highest court. Legal maneuvers may
delay drilling in parts of the state for at least a year, said
Eduardo Penalver, who teaches land-use law at Cornell Law School
in Ithaca.
³If a town draws up a generally worded zoning law that
restricts or prohibits categories of activities, and that
encompasses hydrofracking, there¹s a strong argument that that
is not prohibited under state law,² Penalver said in an
interview. ³The power of municipalities to control what you can
do on your land is now pretty deeply entrenched.²
In December, Montreal-based Gastem Inc. used low-volume
fracking, which is permitted in New York, to test a well in
Otsego County where the company has 22,000 acres under lease.
The results ³quite satisfied² the company, spokesman David
Vincent said.
³There¹s always opposition,² Vincent, who predicted the
local drilling bans won¹t succeed, said in an interview. ³If we
do it right, people will accept that.²

ŒThree Philosophers¹

That hasn¹t won over Ommegang, which says it uses about 1
million gallons of water a year to make ales such as ³Three
Philosophers Quadrupel,² described on its website as a blend of
cherries, roasted malts, and dark chocolate that will ³only
achieve more wisdom and coherence as it broods in the dark
recesses of your cellar.²
Ommegang employs 82 people and receives about 40,000
visitors a year for beer tastings and tours, Bennett said. He
said it is named for a festival held in Brussels in 1549 to
commemorate a visit by Charles the Fifth, the Holy Roman
Emperor, and his son Philip II.
The brewery adds prestige to the fight against fracking,
Slottje said.
³Ommegang is one of the largest employers in the area,²
Slottje said. ³They¹re a tourist draw. They sort of exemplify
everything that the Cooperstown area is trying to do.²

For Related News and Information:
Map of U.S. shale basins: BMAP 82555
News on U.S. utilities: TNI UTI US
Natural-gas trading hub prices: NGHB
News about fracturing: STNI FRACKING

–Editors: Larry Liebert, Joe Winski

To contact the reporter on this story:
Jim Efstathiou Jr. in New York at +1-212-617-1647 or
jefstathiou@bloomberg.net

To contact the editor responsible for this story:
Larry Liebert at +1-202-624-1936 or
lliebert@bloomberg.net

—— End of Forwarded Message