NY shale gas rush unlikely in 2013 if gov gives OK

Published on NewsOK Modified: December 25, 2012 at 8:46 pm •  Published: December 25, 2012
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ALBANY, N.Y. (AP) — After more than four years of environmental review marked by escalating battles between industry and anti-drilling protesters, New York regulators appear likely to complete strict new regulations for shale gas development by the end of February.

But it remains to be seen if drilling actually begins. Gov. Andrew Cuomo and his Department of Environmental Conservation have refused to say whether a 4 1/2 -year moratorium on high-volume hydraulic fracturing, or fracking, will be lifted when regulations are completed. Industry insiders say development will happen slowly if the ban is lifted. And opponents have vowed to escalate protests.

With a depressed natural gas market and threats of lawsuits and civil disobedience from opposition groups, a shale gas boom like that seen in Pennsylvania is unlikely to hit New York if Cuomo gives drillers the green light in 2013.

"My sense of it is, there will be some activity, but I don't see it as being a big land grab," said Nancy Schmitt, president of Taum Sauk Capital Management, a New York-based natural resources hedge fund. "I think it's a smaller resource (than Pennsylvania) and it's unproven and there's political risk. There's a lot of reason to believe they'll be more cautious moving into New York."

Tom West, an Albany lawyer who represents Chesapeake Energy and other major drilling firms, said the industry expects DEC to complete the environmental review by mid-February and finalize the regulations by the end of February.

"Then we'll have to see what the courts say," West said. "Environmentalists have made it clear that they'll challenge the standards. If a judge grants an injunction on permitting while their case is pending, we'll be shut down for another couple of years."

If there's no injunction, drillers can apply for permits under the state's new rules and regulations.

Energy companies have hundreds of thousands of acres under lease in New York. If drilling is allowed, it would most likely start in the Southern Tier counties near the border of Pennsylvania, where the industry has thousands of wells and associated infrastructure. Both states, as well as Ohio and West Virginia, are over the gas-rich Marcellus and Utica shale deposits.

"These are very complex requirements," West said. "I estimate it will take six months to a year to get permits through the process. Very few wells are likely to be drilled next year."

Industry opponents say they're confident Cuomo won't allow fracking, but if he does, more than 6,000 people have signed a pledge to prevent drilling by staging protests and civil disobedience.

Sandra Steingraber of New Yorkers Against Fracking said opponents are planning numerous events in January, including a rally at the Capitol when Cuomo delivers his state-of-the-state message on Jan. 9.

"Whatever momentum may be moving us toward fracking is not based on science," Steingraber said. "The governor promised that his decision would be based on science and we intend to hold him to that."

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