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Group warns NY drilling delays have economic costs

Published on NewsOK Modified: March 4, 2013 at 1:48 am •  Published: March 4, 2013

ALBANY, N.Y. (AP) — An oil and gas industry group has warned that the state could experience a greater exodus of business while Gov. Andrew Cuomo waits for the results of a Pennsylvania health study before deciding whether to allow fracking.

"For business owners, the opportunity is not here in New York," said Jim Smith of the Independent Oil and Gas Association of New York.

Smith said Sunday that permit applications for conventional vertical gas wells, which are still allowed in the state but are less profitable than the far-larger shale gas wells, have dropped from about 600 in 2008 to below 200 in 2012 as the industry has moved to other states.

"We can assume the exodus we're seeing now will continue" if a moratorium on drilling remains until the results of the new study are in," he said.

The Associated Press reported Saturday that Cuomo came close to approving a limited drilling plan for as many as 40 shale gas wells last month before environmentalist and former brother-in-law Robert Kennedy Jr. helped persuade him to await the new study, which could delay a decision for up to a year or longer.

Cuomo is expected to announce a formal decision after the Department of Environmental Conservation completes its 5-year environmental impact study, but that decision has already been delayed twice. DEC Commissioner Joe Martens has said that study will be finished after Health Commissioner Nirav Shah makes recommendations based on his own review, which will include a look at the new $1 million Geisinger Health System study launched recently in Pennsylvania.

Unlike most studies funded by advocates or opponents of hydraulic fracturing, the Geisinger study would be funded by the Sunbury, Pa.-based Degenstein Foundation, which is not seen as having an ideological bent.

"I think it will be pivotal," Kennedy told the AP. Preliminary results are expected within the year, but final conclusions could be years off. The study will look at health histories of hundreds of thousands of patients who live near gas wells and other facilities producing natural gas from the same Marcellus Shale formation that New York would tap.

While opponents of fracking are pleased that Cuomo will wait for the Pennsylvania study, landowners are preparing to sue New York over lost gas-leasing opportunities.

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