Marcellus Drilling News attended the Natural Gas Development Summit held in Binghamton on March 18th at the Regency Hotel. The event was organized and sponsored by the Joint Landowners Coalition of New York. There were about 150 people in the audience, made up of landowners, people from the drilling industry (lawyers, energy companies, engineering companies and others), and the press. It was a half day event, starting at 9:30 am and ending at 12:45 pm. MDN will run a series of posts to cover the presentations. This article contains the opening remarks delivered by Scott Kurkoski, a lawyer specializing in mineral rights with Levene, Gouldin & Thompson. Scott was one of the chief organizers of the event and master of ceremonies.
He opened by stating the purpose of the meeting is to have a discussion about the issues, with an aim to move the issue of drilling in New York State forward. He thanked Broome County Executive Barbara Fiala for hosting the event and for her efforts on behalf of landowners.
Scott next provided the background for where we are now in New York, and how we got here. In 1992, the New York Department of Environmental Conservation created a Generic Environmental Impact Statement (GEIS) to govern oil and gas drilling in New York. Since then, newer technologies (horizontal drilling and hydraulic fracturing or “fracing”) have come along and the DEC, under direction from the Governor’s office, drafted Supplemental (new) regulations to account for these new technologies and their use.
There was a public comment period near the end of 2009 and over 10,000 comments were filed with the DEC. They are now reviewing those comments and it is hoped they will finalize the SGEIS regulations by June of this year so drilling can finally start. However, once the DEC releases the final SGEIS, Gov. Patterson will have to approve it before drilling begins. There was a petition at the meeting for interested people to sign, requesting the Governor approve the regulations immediately upon finalization.
Scott is a member of the Joint Landowners Coalition of New York. He recounted the history of its beginning. A group of 300 landowners in the Deposit area successfully negotiated a $90 million deal with XTO Energy in 2008. (The terms of the deal were $2,411 per acre and 15 percent royalties.) After that deal, landowners throughout the region started to form other landowner groups based on geography. The heads of those groups started to meet informally, and eventually the Joint Landowners Coalition of New York (JLCNY)—which is a “group of groups”—was formed. The JLCNY has 37 member coalitions representing some 800,000 acres and 70,000 people. In January of this year, the JLCNY registered as a 501(c)6 non-profit organization.
According to Scott, landowners care more about their land than anyone else. In many cases, the land has been in families for generations. He said that landowners are “the true environmentalists.” They don’t want their land to be harmed or irreparably damaged. The problem is, according to Scott, landowners have been too silent on the matter of drilling. Their voices need to be heard and landowner coalitions are one of the ways that can happen.
During the public comment period for the SGEIS last December, there started to be loud opposition to drilling. Scott said New York City Mayor Michael Bloomberg and other politicians in the New York City area held frequent press conferences and tried to build a case to ban gas drilling altogether. But there’s a problem with that…there are already 13,000 active non-Marcellus oil and gas wells in New York State! A total ban on drilling is nonsensical.
The long delay in the start of Marcellus drilling is taking a toll on New York. Businesses are going to Pennsylvania and elsewhere. Scott cited two recent cases: An energy company looking to invest $75 million in New York was two days away from closing a deal and pulled out because, “New York is just too unsettled right now.” Once all associated business activity for a deal of that size are considered, losing that $75 million deal was actually losing $300-$500 million in ultimate spending in New York.
Scott recounted the story of another company looking to invest $23 million in a facility in Tioga County, NY, with the promise of creating 450 new jobs. Again, the hurdles were too high and the delays too long. The company decided to take their business, money and jobs over the border to Pennsylvania in January of this year. Another 450 jobs in New York would have been a boon to the Southern Tier region.
An often-heard argument is that, “The Marcellus Shale has been there millions of years, it’s not going anywhere, there’s no hurry to develop it right now.” Scott disagrees. Once companies decide to locate in a different state—they stay there. The jobs never come to New York. Every day New York continues to delay drilling, New York jobs and money disappear.
Drilling regulations in New York will be the strictest in the nation. It begs the question, “So what do we have to fear?” There is no excuse for further delays.
Scott made an impassioned case that New York needs to start drilling soon. And he made the statement that New York City cannot be allowed to speak for Upstate on the matter of drilling.