NY Governor Vetoes Moratorium; Delays Hydro-Fracking till July

Drill rig near Troy, PA

Corrections made 12/13 at bottom of post.
This afternoon Governor David A. Paterson vetoed the moratorium bills, S.8129-B/A.11443-B, which would have suspended issuing new drilling permits through May 15, 2011.

Contemporaneous with his veto, Paterson issued an Executive Order which directs the Department of Environmental Conservation (DEC) to conduct further comprehensive review and analysis of high-volume hydraulic fracturing in the Marcellus Shale. The Executive Order requires that, if approved, high-volume, horizontal hydraulic fracturing would not be permitted until July 1, 2011, at the earliest.

In a press release Paterson said, “We in government must always focus on protecting the well-being of those whom we represent and serve, but we also have an obligation to look to the future and protect the long-term interests for our State and its residents.”

As for the moratorium bill, he stated that the legislation, though well intended, “would have a serious impact on our State if signed into law. Enacting this legislation would put people out of work – work that is permitted by the Department of Environmental Conservation and causes no demonstrated environmental harm, in order to effectuate a moratorium that is principally symbolic.”

Read the press release concerning the executive order here.

On Dec. 13 the executive order was posted to the Governor's website here.

NY Assembly Passes Fracking Moratorium

The state budget may still be out of whack, but the NY did manage to pass a moratorium on using high volume hydraulic fracturing in yesterday’s session. And fracking wasn’t even on the Governor’s “to do” list for the special session.

Still, the Assembly wanted to vote on the bill, so they gaveled in for a regular session, and began debating the fracking moratorium close to 9 pm last night. Before the clock struck midnight, the’d approved a temporary moratorium on fracking with a 93 to 43 vote.

The moratorium halts fracking until May 15 to allow the state time to obtain a more complete picture of environmental impacts from the technology. This is the same bill that the NY Senate approved in August.

Now the bill is on Governor Paterson’s desk awaiting his signature. Will he sign it? Susan Arbetter will ask him this morning on The Capitol Pressroom which airs at 11 am.

Although the governor’s office has not officially commented on whether the Governor will sign the bill, Paterson did comment in a radio interview last week that he does not think the state will move forward with drilling in shales. He noted that opponents of hydro-fracking had raised enough concerns to “thwart going forward with it at this time.”

Marcellus Not the Only Game in Town

The NY Department of Environ-mental Conser-vation (DEC) hasn't completed the SGEIS (Supplemental Generic Environmental Impact Statement) yet for high-volume hydro-fractured wells in the black shales. But that doesn't mean companies have stopped drilling.

Don Zaengle, a petroleum geologist who spent 20 years with Shell Oil Company, told Tioga County (NY) landowners that DEC issued more than 550 permits last year. "Companies are drilling into Oriskany, Trenton Black River and other gas-bearing strata under existing regulations that permit vertical wells," he said. Last year NY wells produced about 45 billion cubic feet (bcf) of natural gas. "That's enough to heat 650,000 homes," Zaengle added.

The number one producer last year: the Nowlan 1 well in Erin, a small town in Chemung County. "Despite what you hear about a moratorium, there's significant activity going on in the state,” Zaengle said. Of course, he added, there's much more drilling activity in PA because Marcellus is where many of the companies want to invest their drilling energy.

"Unfortunately, Cabot has done a lot to create bad publicity for Marcellus exploration," Zaengle said, criticizing what he feels has been haphazard drilling in Dimock. "Their operation there is not clean, good quality production. He hopes the company will go to more ‘environmentally friendly’ drilling in the future -  placing six wells on a single pad instead of the current scattering of vertical and horizontal wells across the landscape.

Still, Zaengle noted that geologists have learned much from Cabot’s production figures. Wells in the 7-square mile Dimock gas field are producing 100 million cubic feet (mmcf) each day. "At $4.75 per thousand cubic feet (mcf), that gas is bringing in $475,000 each day - $173 million per year," he said. 

The length of lateral well bores has increased as well, Zaengle said. He claims that most horizontal wells in PA are being drilled with 5,000-foot laterals, and that Range Resources has been drilling 7,000-foot laterals. They do 18 stages of frack, Zaengle pointed out. Ironically, as companies pursue gas trapped in the tight Marcellus shale, one of the most productive wells drilled in PA is in the Purcell limestone.

Will NY put a 1-year Moratorium on Fracking?

Yesterday a bill that would put a one-year moratorium on new natural gas drilling permits in New York received the backing of key lawmakers in the State Senate and Assembly. The bill would suspend - until June 1, 2011- hydraulic fracturing for the extraction of natural gas. The process, which locals refer to as "fracking" has been the source of much controversy between pro-drilling landowners and those landowners who would like to see the state adopt more environmental protections.

The chairmen of the Environmental Conservation committees, Sen. Antoine Thompson, D-Buffalo, and Assemblyman Robert Sweeney, D-Babylon, Suffolk County,  are sponsoring the bill.  The measure passed the Senate Environmental Conservation committee on Monday, but it was unclear if or when it would be brought to a vote of the full Legislature.

According to press reports, Thompson said NY needs more time to draft regulations and other laws that will be needed to ensure any drilling is done safely.  "If it's going to be done, it has to be done in a responsible way," Thompson said.

This isn't the only legislation to deal with drilling in the Marcellus Shale formation. Earlier this month, the Assembly Environmental Conservation Committee passed a measure that would enact a moratorium for 120 days after a federal environmental-impact study on the practice is finalized. 

No one should be surprised that the industry opposes such measures.  Brad Gill, executive director of  Independent Oil & Gas Industry- NY (IOGA) told the press that  "What New York needs now is leadership toward a new energy economy for our state, rather than another bill rife with inaccuracies and false assumption." 

Having listened to Brad Gill's spiel at numerous presentations I'm not sure it's the proposed legislation that is "rife with inaccuracies and false assumptions." After all, he continues to insist that hydrofracking - a process that is fairly new - has been "done safely in NY for more than 50 years."

Read news article here.