New York’s Democratic Gov. David Paterson recognizes the need for energy development for America’s future, but even he is being blockaded by the status quo and environmentalists who are fighting plans that, among other things, would use a 99 percent water solution to release much-needed natural gas.
Paterson recently vetoed legislation that would have barred natural gas exploration in New York state, a decision that still is reverberating because of the analysis from experts who have determined just as the price of natural gas is expected to balloon, there is a huge – and potentially lucrative – energy field in upstate New York that remains untapped.
“Because of the exploding requirements of developing countries, worldwide demand for hydrocarbons will keep rising faster than supply,” said Henry Stimpson, who has $238 million in capital under the management of his firm, Financial Advantage, of Columbia, Md.
But the political will to explore and produce is absent.
A recent study by economists at Penn State University indicated that the Marcellus Shale Formation – the natural gas field that stretches from Ohio to West Virginia and Pennsylvania and upstate New York – has approximately 65 million acres of natural gas ready for exploration.
That would make it the second-largest natural gas field in the world. Government officials in Pennsylvania cleared exploration proposals there, and the state generated $4.5 billion in economic activity in 2009 as a result, creating 44,000 local jobs and $400 million in tax revenue, even during the economic downturn, the Penn State report indicated.
Th American Petroleum Institute has reported that New York could generate $15 billion in economic growth and $2 billion in tax revenue – nearly enough to cover the state’s crippling budget deficit – should it move forward with development of the energy field.
But environmentalists so far have the ear of Paterson’s cabinet as well as that of the legislature, so while the legislative ban on development failed, the political impetus to move forward did the same.
“The environmental concerns are present and are difficult to address,” said Joseph R. Dancy, a professor of energy and environmental law at the Southern Methodist University Dedman School of Law in Dallas.
“The ‘issues’ are occurring a mile underground. So the argument for the safety of the process can be made on both sides. My opinion is that 99 percent of the time, no problem,” he said.
Environmental interests have made the process for drilling controversial and through their political pressure have managed to impose a moratorium on drilling in New York, experts said. Drilling for shale, and releasing the natural gas, relies on a process called hydraulic fracturing. Engineers blast shale with a concoction that is 99 percent water and 1 percent chemicals to release natural gas. The process has been used since the late 1940s in the U.S., and is now being used in horizontal drilling for energy, which enables explorers to drill laterally, under the surface.
Dancy noted that environmentalists are concerned about the chemical additives used in the process of gas extraction. They want exploration firms to perfect the process to minimize any potential for accidents.
But that might not be reality.
“Just like surgery, 1 percent of things get screwed up and can go really badly,” said Dancy. “But that is rare.”
Other experts, like Nicolle Snyder Bagnell, an attorney in Pittsburgh who has followed the Marcellus Shale project, note that there are other problems as well, including contract disputes, permitting disputes, royalty litigation and other environmental angles.
The U.S. Environmental Protection Agency and others have published research that shows the fracturing process being used in Pennsylvania is safe, as there are no documented cases of the process polluting ground water there.
But New York’s Department of Environmental Conservation has refused to issue any permits for exploration. State politicians went even further, seeking to prohibit underground drilling in New York altogether, prompting Paterson’s veto.
While the veto was a start at progress, experts say, Paterson also issued an executive order staying all drilling until the conservation department comes up with new regulations to govern the process.
This is quite a contrast with Pennsylvania, experts tell WND, as there have been more than 600 wells released since 2009 there on private land and 180 billion cubic feet of natural gas extracted in less than two years, doubling the state’s gas output.
If New York’s natural gas field ever goes online, there could be big money for entrepreneurs, and a lot of new jobs and a new energy supply for the eastern seaboard of the U.S., experts confirmed.
“Just based on economics,” said Darcy. “Natural gas prices should rise over the next few years, making the … prospects very economical and profitable for the firms drilling and for the landowners with royalty rights.”
A recent Reuters report confirmed that estimates of natural gas reserves in the United States increased by the most in history last year. The report said proven natural gas reserves were up 11 percent, to a total of 284 trillion cubic feet.
The report suggested that amount is the same as 12 years of gas consumption.
New York is not the only place where there’s a dispute, however. According to published reports in Wyoming, a lawsuit is challenging decisions by federal land managers that delayed or halted fast-track approval of gas drilling on public land in the West.
