Friday, April 9, 2010


  In the past few weeks an impetus has been building  in New York to delay the commencement of the natural gas play until the EPA concludes its two-year study on hydraulic fracturing.  Activist groups have petitioned the DEC to hold off issuance of its final sGEIS until the report is in.  Meanwhile, a bill is circulating in the legislature providing for a two-year moratorium on gas drilling.

For nearly two years now, many of us have been questioning what  the hurry was, anyway, because of the bad news on the impacts of “unconventional” gas development in Texas, Colorado and Pennsylvania.   We knew the gas in the Marcellus Shale,  then as now, was not in danger of drying up or dribbling away.  Since that time, facts have come to light about the drilling process and the industry, about international energy dynamics, and about politics, culminating in the 2005 Energy Policy Act, that have helped to reveal the forces behind the pressure to drill and to put the drilling debate in perspective. There’s no sound reason for New York to hurry.

The industry continues to pound impatiently on New York’s door and to warn that if the state gives it too hard a time it will have to hurt us all by walking away. Never mind my personal response to this threat.  Even from the industry’s own point of view, it makes no sense. True, a dollar today is worth more than a dollar two years from now.  But the price of gas is presently depressed, and will presumably go lower yet as more of it is recovered.  That means gas companies will realize less value for each mcf of New York gas they drill now than they will if they wait until a time when it is in scarcer supply. As there is no present capacity for stockpiling gas, there is no price float to benefit them, either.

The same is true for the state, in terms of taxes to be realized, and for landowners in terms of royalties payable to them, since both are measured by the price of the gas produced.  I, for one, am unsympathetic to the respective interests of the State fisc and the hard-up landowners in getting a “quick fix” now, because evidence is mounting on the extent of collateral damage that may be inflicted upon our citizens in order to provide it to them.  Part of that evidence suggests that the losses to the state and its communities from an immediate gas play, even in purely economic terms, may end up outweighing the gains. (I advert here to the study that was the subject of my March 31 post, and to another look at the economics in a webinar.

So, a quick fix for the state from the riches of the Marcellus Shale is probably a pound-foolish delusion.  As for the landowners who believe that “their” gas entitles them to special consideration, they need to be reminded that when they leased away certain rights in their own land, they also gave away, free of charge, many of the rights of their neighbors to enjoy their own lands,  as well as the security of the water supplies of people in distant downstream regions. That somehow fails to make their needs a priority for the rest of us.

Two years will serve to cool many heads. By the end of  two years, there should be some useful published statistics on the human health impacts within drilling communities in other states, and on the communities’ economic health as well.  There should also be  progress in the unsettled matter of how to treat and safely dispose of the large-scale toxic wastes produced by hydraulic fracture drilling.

 In two years, too, technology will change.  The Halliburton formula could by then be superseded by something far safer.  Whatever happened to fracking with propane, the process tested in eastern Canada and alleged to be safer and more efficient ?  Could it work in deep shale?

In the meanwhile, two years lost to gas drilling will mean two years of confidence that the water we drink won't have stuff like toluene in it, and two years for safer sources of energy to take hold in New York.

By way of a postscript,  I add that moving precipitously ahead with drilling in New York will NOT aid U.S. efforts to become energy-independent.  Gas will not supplant mid-eastern oil until such time as gas applications become as broad as oil’s.  We will need to keep importing oil until we’ve got natural gas cars and trucks. We’re not there yet.  In the interim, New York’s supply , given the current glut in the U.S., will doubtless flow overseas: perhaps (who knows?) to Saudi Arabia.