NY Assembly Passes Drilling Moratorium

A temporary moratorium on natural gas drilling in New York is headed to the governor's desk.

The drilling moratorium bill wasn't on the agenda Monday in a special session called by Governor David Paterson, but after that meeting wrapped up, the Assembly opened a regular session to vote on it.

The State Senate passed the moratorium in August, so it now heads to Paterson for a signature.

The moratorium puts a hold on hydraulic fracturing until May. The idea is to give the state more time to understand the impacts of hydro-fracturing.

But Assemblyman Cliff Crouch says many of his constituents do want drilling to move forward. "We have an opportunity here with an energy source that's relatively clean. It's a fossil fuel, but it's still relatively clean, and done correctly, can do a good job for New York State at creating jobs," says Crouch.

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As the G20 summit meeting scheduled in Cancun approaches, the U.N. Intergovernmental Panel on Climate Change (IPCC) co-chair, Dr. Edenhoffer of Germany, candidly admitted, “… One must say clearly that we redistribute de facto the world’s wealth by climate policy.” This has been clearly exemplified here in the United States by the fact that of the $2.2 Billion dollars of the stimulus money that was allotted for “renewables” (and all the “green” jobs it would supposedly create) — over 80% of that money went overseas (See: http://investigativereportingworkshop.org/investigations/wind-energy-funds-going-overseas/story/renewable-energy-money-still-going-abroad/ ). Industrial wind is a major component of the IPCC’s “climate policy” redistribution of wealth scheme, and NYS – with plenty of Big Wind lobbyists and political cronies in high places, is a major player in this redistribution of wealth and, as Al Gore & George Soros refer to it – “global governance” scheme.

The push for the redistribution of our wealth through politicalization of our energy policies was made clear once again at the annual NYS Energy Research & Development Authority (NYSERDA) “Partnership for Environmental Improvement” meeting held on 11/18/10 in Albany, when NYSERDA executive, Janet Joseph stated, “…We are looking at transforming our economic system.”

The objective of the meeting was supposed to be for NYSERDA to give Environmental Groups from across NYS an opportunity to bring their concerns to NYSERDA’s attention, so that NYSERDA could properly address these concerns. The absolute frustration we have faced at getting them to address any of our concerns over the past several years now, was made even worse at this year’s meeting. Dr. Thorndike, the Cornell professor on NYSERDA’s board who chairs these meetings, elected to skip over the folks from across NYS she knew were there about wind, while letting all the other attendees speak – despite the fact that we had all been invited by NYSERDA to this meeting, and driven hundreds of miles to get there. When it got to be 3:00 – past the time the agenda said would be allotted for our comments – and the meeting was only scheduled to go until 4:00, I decided to speak out – much to their chagrin, I’m sure.

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DIMOCK, Pa. -- Months of contentious debate. Ruined water wells. National attention. And a lawsuit.

Just when it looked like the natural gas-drilling divide among residents in Dimock Township couldn't get any worse, it did.

A proposed $11.8 million plan to construct a 12.5-mile water pipeline from Montrose to 14 homes in the Carter Road area of Dimock has further split the already divided region.

On one side are the affected homeowners vigorously defending their right to clean water; on the other are some area businesses and residents balking at the hefty price tag.

"It has pitted neighbor against neighbor," said Ron Carter, the namesake of Carter Road who joined the lawsuit against Cabot Oil & Gas after his water well became contaminated with methane. "I hate to see it, but that's what it has done."

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Environmental and public-health groups want the Assembly to pass a temporary moratorium on state permits for the practice of hydraulic fracturing—also known as hydrofracking—during Monday’s special session. The item is not on the agenda set by Gov. David Paterson, who called the session, but opponents of hydrofracking are optimistic the legislation could end up on the agenda, particularly in light of what Paterson said on WAMC radio in Albany Wednesday, said Erica Ringewald, spokeswoman for Environmental Advocates. Hydrofracking is a controlversial technique for extracting natural gas.

The governor said opponents of hydrofracking “have raised enough of an argument to thwart us going forward at this time.” Even with the “tremendous revenue” hydrofracking could bring in, the state doesn’t want to risk public safety or water quality, he said.

The Senate passed the moratorium legislation earlier this year. It would prohibit the state Department of Environmental Conservation from issuing any permits for hydrofracking in New York’s portion of the Marcellus Shale until May 15, 2011.

The natural-gas industry opposes the ban. The Independent Oil & Gas Association is asking Assembly members to oppose the bill because it would stop most oil and gas drilling that is currently allowed, intrude on the current work the Department of Environmental Conservation is doing and harm the entire industry in New York.

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There has been a lot of talk about the latest get-rich-quick (GRQ) scheme(s) called Marcellus Tight Shale Gas (MTSG) which is based on a Devonian Shale (350 million years ago) resource. It turns out that this is methane and other hydrocarbons (ethane, propane, benzene, for example) trapped in essentially non-porous rock that have the consistency of a brick. The hydrocarbons will not flow out of this rock unless the rock is fractured in a special way ("fracking"). Quite often, the formation is between 1 to 2 miles underground, and there is often saturated saltwater laden layers on either side of the approximately 100 foot layer (a former swamp/shallow ocean bottom) of shale. The hydrocarbons are not uniformly dispersed at the same concentration in the Marcellus shale formation, so there are regions of hydrocarbon rich shale and other regions without any significant organics (as in hydrocarbon chemicals) content.

These are not easy hydrocarbon reserves to extract, and they also are financially expensive to bring to market compared to "easy gas". But, since most of the easy pickings of natural gas have been developed and are being or have been drained of gas in North America, our hydrocarbon addiction has resulted in a "seeds and stems" situation, where we are getting down to the dregs. If we want to keep using and living large (energy wise), it's time to use up the bottom of the barrel stuff - beggars can't be too choosy, after all.

Anyway, we could spend many large fortunes to extract some of the Marcellus gas (followed by Utica Shale gas as the next hydrocarbon adventure) and in the process make some people really rich as well as a significant number who might be able to cling to a middle class lifestyle for a while. However, keep in mind the fate of mining towns; once the mine has been played out, what remains is a ghost town and quite often a big mess (toxic mine tailings). Once the "sweet spots" in the Marcellus regions have been tapped, then we need to move on to energy resources based on something else, such as something that won't deplete and also cause all kinds of pollution problems. Some say that maybe we should just skip this temporary patch and get on to a viable future. But if we do that, what of the fortunes to be made by the wannabe or already are but not sufficiently so Methane tycoons? Won't they be robbed of their potential methane/hydrocarbon riches based on our collective resource? Or what about the path not chosen - renewable energy - won't those riches go to someone/somewhere else while we tubed our money on Marcellus Pipe Dreams?

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A major Election Day shakeup rocked the Broome County Legislature and crowned a new majority party, and it could have an impact on the debate about leasing county-owned land for natural gas extraction.

Jerry Marinich, who is expected to be officially tapped by his Republican colleagues as the legislature's next chairman come Jan. 1, said he would allow land-owning legislators to decide whether to recuse themselves from resolutions regarding lease offers. That would mark a reversal from current chairman Daniel D. Reynolds, a Democrat, who acted on legal advice to bar four legislators from voting or discussing the offers because of their ties to landowner coalitions.

"I'm going to -- as a chair, unless I'm told legally I can't -- allow them to speak or vote if they so choose, unless they want to recuse themselves," Marinich said. "I'll leave it up to them to make their own choice."

Legislators Marchie Diffendorf, R-Kirkwood; Stephen Herz, D-Windsor; and Ronald Keibel, R-Whitney Point, belong to landowners coalitions and will return to their legislative seats in 2011.

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WILKES-BARRE, Pa. (AP) -- A natural gas driller has ended operations in two northeastern Pennsylvania counties after the company deemed them unlikely to produce commercially viable wells.

Encana Oil and Gas had drilled two exploratory wells in Luzerne County but announced Thursday it was stopping operations there and in neighboring Columbia County.

Encana and partner company Whitmar Exploration were the only companies trying to tap the lucrative Marcellus Shale formation in Luzerne County, where they'd leased more than 25,000 acres.

When Chesapeake Energy Corp. began ramping up its natural gas drilling operations in northern Pennsylvania two years ago, it quickly realized the rural region lacked a sufficient number of apartments and hotel rooms to handle the sudden influx of out-of-state workers.

So the Oklahoma City-based driller built a $7 million residential complex and training center that company officials hope will help ease the housing crunch.

Chesapeake held an open house Thursday at its campus in Athens Township, Bradford County, along the New York state line. The low-slung dormitories can hold about 280 workers, and the fenced complex includes a cafeteria, recreation center and laundry facilities.

The workers moved in last week.

“At a certain point, it became very difficult to find places for employees to live,” said Brian Grove, senior director of corporate development. “This will take some of the pressure off the local housing market.”

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A much-debated $7.8 million lease offer for the gas rights to thousands of acres of Broome County land is set to be put up for a vote Thursday by the legislature.


Wednesday, Denver-based Inflection Energy, a startup natural gas company, lengthened the timetable for the county to accept the deal, opening the door for legislators to table the vote for another month.

In an e-mail sent to County Attorney Joseph Sluzar, Inflection CEO Mark Sexton said the company has decided to extend the offer until Dec. 17, one day after the legislature's regularly scheduled December session.

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Ron Gulla, a farmer from Hickory, Pa., says he had no idea what he was getting into when he leased his land for gas drilling.

“When I saw what was happening on my property, I couldn’t believe it,” Gulla said. “They totally misinformed us and misrepresented the lease.”

Over the past few years, he saw his farm – in a rural area just south of Pittsburgh – become a large industrial site over which he had no control, and had his water supply tainted by high levels of toxic chemicals, he said.

Gulla – who also sells construction and forestry equipment and once spent six years working in the oil and gas industry – tried to take out a mortgage loan to finance a lawsuit against the well operator, Range Resources, but was told by the bank that his land was basically worthless because of the drilling activity there.

Gulla told gutwrenching stories of other farmers in Washington County whose property was virtually ruined by drilling. Many of their calves have been born with strange deformities, he said. Cows and horses – even dogs – have been sickened or killed from drinking the water from streams and ponds near the well pads. Folks living near compressor stations have had serious health issues from air pollution, he added.

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Sister utility companies New York State Electric and Gas and Rochester Gas & Electric are looking for large-scale energy-saving proposals to fund.

The proposals must be from nonresidential customers or third-party aggregators working with those customers and be expected to save at least 100,000 kilowatt-hours of electricity by October 2012.

Proposals that save the most energy at the least cost will receive funding under the utility companies' block bidding program.

According to RG&E and NYSEG, programs that could receive funding might include large renovation projects that don't fit into existing NYSEG or RG&E lighting or rebate programs or aggregated bid of combined energy savings projects submitted by a third party from a number of customers.

To apply, go to www.rge.com or www.nyseg.com, click on "Energy Efficiency Initiatives" and then on "Block Bidding."

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Natural gas has always been the ugly stepchild of our national energy debate, never enjoying the political muscle of oil and coal, and never capturing the imagination like solar panels and wind farms. And to top it all off, it was in short supply.

But that is changing, and now this stepchild is being touted as the hope of the future - the answer to our energy problems.

What has brought about the change is there is a new unconventional process for extracting natural gas from shale, a dense rock formation two miles underground. And if you're sitting on top of it, you may become a new American phenomenon: a "shaleionaire."

And yet, if the BP spill taught us anything, it's that exploring for energy has safety risks. But that can get lost in all the excitement.

What is increasingly evident is that shale gas is overwhelmingly abundant right here in the U.S.A.

"In the last few years, we've discovered the equivalent of two Saudi Arabias of oil in the form of natural gas in the United States. Not one, but two," Aubrey McClendon, the CEO of Chesapeake Energy, told "60 Minutes" correspondent Lesley Stahl.

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Gas drilling in TV spotlight

Hollywood, meet one of the Southern Tier's most divisive issues.

Popular CBS television drama "CSI: Crime Scene Investigation" took a crack at hydraulic fracturing -- a natural gas extraction technique -- with a storyline Thursday that centered around a fictional gas company, poisoned water and a pair of murders.

Titled "Fracked," the episode featured a journalist who was on the brink of exposing "Conservo Solutions" of contaminating water through hydrofracking when two of her sources turned up dead. At one point, a rancher set off a massive explosion when he dropped a cigarette down his water well.

While the episode ended inconclusively, the gas company was thought to be behind the killings to keep the story from getting out.

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The state position that could have the greatest impact on the Southern Tier was not up for grabs on Election Day.

In fact, it's never up for election at all.

There's only one vote that counts when it comes to finding a commissioner for the state's Department of Environmental Conservation: Governor-elect Andrew Cuomo's.

With the DEC's review of permitting guidelines for drilling in the Marcellus Shale expected to drag into 2011, and an EPA plan to clean up the Chesapeake Bay watershed set to be finalized by year's end, all eyes are on Cuomo as he assembles his administration and decides who will lead the dwindling agency.

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BINGHAMTON -- A proposed plan for a state-mandated review of a Broome County natural gas lease drew concern from a Department of Environmental Conservation official in September, according to internal correspondence.

Betty Ann Hughes, then the DEC's chief of State Environmental Quality Review (SEQR) and training, said in a pair of messages that without the county completing some analysis of "the potential impacts of typical development activities" on land offered for lease, she would be "concerned that the lease action and supporting SEQR record could be vulnerable to challenge."

The e-mails, obtained by Ithaca-based activist Walter Hang and provided to this newspaper, were sent to a pair of county attorneys and Frank Evangelisti, acting commissioner of the Broome County Department of Planning and Economic Development. They were sent in response to a message from Evangelisti seeking an opinion on how the county should proceed with the SEQR process.

County administration has pushed a resolution that would set the parameters of a "generic" gas lease to define terms and conditions to be included in any offer the county would consider, including a current $7.8 million offer from Denver-based Inflection Energy. That resolution would also approve a completed Environmental Assessment Form for the state review process, and a separate resolution would declare signing a lease with the generic terms would not have an adverse impact on the environment.

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It is puzzling that the New York state Senate placed a moratorium on Marcellus Shale fracking to ensure an adequate review of safety and environmental concerns associated with large water use hydraulic fracking. The senators decided that the health and safety of its citizens was more important than short-term economic gains.

On the other hand, Pennsylvania politicians steadfastly deny there may be a problem linked with pumping 4 to 6 million gallons of contaminated water into the ground for each horizontal well being fracked.

It seems likely Pennsylvania politicians will continue to support money over the welfare of its citizens. According to Follow the Money.com, Gov.-Elect Tom Corbett alone accepted $740,404 in contributions from oil and gas interest for his election. Do people really think he will have their best interest in mind when dealing with the gas industry?

The comedian Ron White once eloquently commented that "you can't fix stupid." Makes you wonder if he had Pennsylvania in mind.

The board of a Pennsylvania state water and sewer project financing agency is offering nearly $12 million to extend municipal water service to residents in the midst of heavy Marcellus Shale gas drilling.

The Pennsylvania Infrastructure Investment Authority board voted Tuesday to approve the application by the Pennsylvania American Water Co.

The state Department of Environmental Protection backs the step and is planning to sue a Houston-based drilling company to recoup the cost.

State officials say Cabot Oil & Gas' operations in Susquehanna County contaminated the water wells of 14 households in Dimock and Bridgewater with methane gas. Cabot denies it's responsible for the polluted water wells and opposes the project.

Residents are to be connected to the water system of Montrose, a town about six miles away.

The cost of “green power” is too high for several reasons. Cost quoted in this article is selective at best. A “Wind power would have increased the monthly bill of a typical residential customer by 0.2 percent” ignores the fact that the increase is factored into the larger pool of available power sources. I would refer you to the active Cape Wind project in Massachusetts. The initial estimated rates to charged customers would be 18.7 cents per kilowatt hour. Under a 15 year agreement the electricity would increase 3.5 percent each year that pushes the final price to about 31.7 cents in the final year of the contract.

These rates far exceed the rates the average consumer pays today for electricity. Also final construction cost of the project may exceed $2.5 billion. The estimated taxpayer’s subsidy for this project $600 million! In addition the 130 turbines may produce a maximum of 420 MW of electricity. Unfortunately wind farms have a very low capacity factor i.e. they produce on average 25% of the listed capacity. In other words the 420 MW nameplate capacities is in reality 105 MW. Finally, many of the people commenting on this article refer to oil as a problem; perhaps. But the Department of Energy reports that less than 1% of the fuel source used to produce electricity in the United States comes from oil.

Consider the science of renewable energy before committing billions to what may be flawed renewable energy source.

Roy T. Lindberg

Clarence, NY 14221

When it comes to natural gas, Nov. 2's election brought a mixed bag of incumbents and newcomers with various takes on how New York should proceed with its moratorium on drilling in the Marcellus Shale.

The state's Attorney General-elect, however, took one of the strongest stances against hydraulic fracturing of any candidate statewide.

Eric Schneiderman, a Democrat who handily defeated Republican gas-drilling supporter Dan Donovan on Tuesday, has said he will sue to stop the controversial drilling process of hydraulic fracturing -- until it is proven safe -- and aggressively go after drillers who break the rules.

"As Attorney General, I will build on the strong Cuomo environmental record and ensure that the office's environmental bureau remains active and engaged to investigate and protect our water supply," Schneiderman said in a statement. "Neither the state nor the federal government has determined that hydrofracking is a safe practice, and I will sue to make sure that no drilling takes place until those determinations have been made."

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This past summer, representatives of the lake and watershed associations of the nine publicly-owned and inhabited Finger Lakes met at the Finger Lakes Institute in Geneva to begin the process of forming a new organization that will focus on the unique needs of the Finger Lakes area of our state.

Individuals from the following lake and watershed groups participated: Canandaigua Lake Watershed Association, Cayuga Lake Watershed Network, Conesus Lake Association, Honeoye Valley Association, Keuka Lake Association, Otisco Lake Preservation Association, Owasco Watershed Lake Association, Seneca Lake Pure Waters Association, and Tri-County Skaneateles Lake Pure Water Association. These citizen-based groups represent over 7,000 members.

At the end of that meeting, all nine associations agreed to form an alliance that would span the Finger Lakes, and represent the allied interests of the individuals living in their geographic area. The Finger Lakes Regional Watershed Alliance was formed.

The stated purpose of the Finger Lakes Watershed Alliance is “to bring together the members, expertise and desires of the Finger Lakes watershed associations to preserve and protect the watersheds of the Finger Lakes region with a collective regional voice.”

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A natural gas giant announced Thursday it is set to purchase the mineral rights to a half-million acres in the Appalachian Basin -- including significant acreage in parts of Chemung, Tompkins, Cortland and Cayuga counties -- from a competing company

Chesapeake Energy Corp. will pay $850 million, or about $1,700 an acre, for the rights currently held by the Denver-based Anschutz Exploration Corp., Chesapeake CEO Aubrey McClendon said in a conference call Thursday. He declined to say exactly where the acreage is located, but Anschutz announced earlier this month that it had agreed to sell the rights to the 500,000 acres it holds in New York, Ohio and Pennsylvania to an undisclosed buyer.

The deal is set to close later this month.

"We've been poking around and we saw something we liked and we bought it," McClendon said.

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New York State’s leading energy organizations will highlight ambitious policies and initiatives for enhancing the state’s clean energy future at the Advanced Energy 2010 Conference scheduled for Nov. 8-9 at the New York Hilton in New York City.

Produced by the Advanced Energy Research and Technology Center (AERTC) at Stony Brook University, the conference will focus on clean and efficient energy practices and technologies for enhancing the state’s electric power system and for giving rise to major economic and environmental benefits. The major host sponsors of the conference are the New York Power Authority (NYPA), the New York State Energy Research and Development Authority (NYSERDA), General Electric and Stony Brook University.

“Next week’s Advanced Energy Conference is a can’t miss event for anyone interested in a future electric power industry that integrates the latest generation of clean energy technologies for increased renewable power supplies, reduced transmission congestion and power costs and improved electric service reliability,” said Robert Catell, chairman of the AERTC Board of Advisors and former chairman of National Grid, USA. “These technologies are essential for a 21st century economy, making it imperative that government and leading energy industry organizations marshal their efforts toward advancing them. This will be highlighted by the presentations, discussions and exhibits at the upcoming Advanced Energy Conference, which will mark the fourth year AERTC has held the event.”

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The New York Power Authority will conduct a public hearing this week in Syracuse to solicit opinions on continuing the sale of cheap state-owned hydropower for use by Upstate residential customers.

Some 455 megawatts of power from the Niagara and St. Lawrence hydroelectric facilities is sold at cost to three Upstate utilities, benefiting more than 2.5 million residential customers of National Grid, New York State Electric & Gas and Rochester Gas & Electric. Residential customers saved $2 to $4 a month in 2009, according to Gov. David Paterson’s office.

Some economic development advocates say the electricity — valued at about $82 million below market in 2009 — could be better used to subsidize business growth. Paterson and Senate leaders this year backed a plan to use some of the power for economic development, but the plan was blocked in the Assembly.

NYPA is proposing to extend its current contracts with the utilities through 2011, subject to revocation with 30 days notice.

Public comments will be taken 3 to 7 p.m. Thursday at Syracuse City Hall, Common Council Chambers, 233 E. Washington St. Written comments can be submitted until Friday to secretarys.office@nypa.gov or to Karen Delince, NYPA corporate secretary, 123 Main St., White Plains, NY 10601.

Gas drilling forum in Elmira

A public forum called "The Rest of the Story: The Real Impacts of Gas Drilling"
will be at 6:30 p.m. Nov. 16 at the Trinity Episcopal Church Parish Hall at the corner of Church and Main streets.

Speakers include: Louis Allstadt, former Mobile Oil former executive vice president; Chris Burger, chairman of Binghamton Regional Sustainability Coalition; Ron Gulla, an affected farmer from Hickory County, Pa.; Bret Jennings, director iof Hallstead Great Bend Sewage Authority; Jack Ossont, community organizer and regional activist; Dr. John F. Stolz:, director Center for Environmental Research & Education, Duquesne University.

A panel discussion with a question and answer session will follow.

Shale gas plays in the United States are commercial failures and shareholders in public exploration and production (E&P) companies are the losers. This conclusion falls out of a detailed evaluation of shale-dominated company financial statements and individual well decline curve analyses. Operators have maintained the illusion of success through production and reserve growth subsidized by debt with a corresponding destruction of shareholder equity. Many believe that the high initial rates and cumulative production of shale plays prove their success.

What they miss is that production decline rates are so high that, without continuous drilling, overall production would plummet. There is no doubt that the shale gas resource is very large. The concern is that much of it is non-commercial even at price levels that are considerably higher than they are today.

Recent revisions to SEC rules have allowed producers to book undeveloped reserves that questionably justify development costs based on their own projections in public filings. New reserves are being booked at the same time that billions of dollars in existing shale gas development costs are being written down because the projects are not commercial. Concerns about the logic of ongoing gas-directed drilling while prices collapse have been partly diffused by a shift to liquids-rich plays like the Eagle Ford Shale in Texas. These new ventures, however, produce significant volumes of gas which is partly why gas prices continue to fall.

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