Central New York Landowner’s Coalition Rally: Petroleum Geologist Don Zaengle

The third and final speaker at the April 10 Central New York Landowner’s Coalition (CNYLC) meeting held at the Unadilla Valley Central School was Don Zaengle, a consulting petroleum geologist from Worcester, NY. Zaengle opened his talk with a map showing an outline of those regions in New York State that fall within the Marcellus Shale zone. He said New York State has 12 million acres of potential Marcellus Shale, but not all of it is commercially viable. To put it in context, the entire Appalachian Plateau, which is the area in the Eastern United States that contains Marcellus Shale reaching from New York as far south as Georgia and Alabama, has some 34 million acres in it. So New York State represents about 35% of the entire Marcellus Shale region by acreage.

Zaengle showed a cross section of different shale and sandstone deposits and briefly discussed a few of the different types of shale found in the Central New York region. The exciting news is that Marcellus wells far out produce other types of natural gas wells. An example: It takes six Herkimer Sandstone/Oneida gas wells to equal the production of just one Marcellus Shale gas well. Or put the other way around, one Marcellus gas well equals (revenue-wise) six Herkimer Sandstone/Oneida wells.

Another example Zaengle offered to give attendees an idea of the importance of the Marcellus Shale: In Dimock Township, Pennsylvania, Cabot Oil & Gas has drilled a number of wells in a seven-mile area. The well production from that small area over the course of a single year is on track to generate $180 million in gross revenue. The Marcellus gas play is huge.

Cabot Oil & Gas fracked a well in the Dimock, PA area called Teel #6. It is a vertical well and the fracking “interval” is 370 feet, spanning several different rock layers. The interesting thing is that Cabot has been able to extract gas from many of the non-Marcellus layers, indicating energy companies may be interested in leasing land for non-Marcellus plays as well.

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Central New York Landowner’s Coalition Rally: Coalition Lawyer Scott Kurkoski

The second speaker at the April 10 large meeting of the Central New York Landowner’s Coalition (CNYLC) at the Unadilla Valley Central School featured someone MDN reported on previously. Scott Kurkoski is a lawyer specializing in mineral rights with Levene, Gouldin & Thompson, a law firm located in Vestal, NY. He is the official lawyer for the CNYLC.

Kurkoski opened his remarks by thanking Richard Lasky and the Steering Committee of the CNYLC for the excellent work that they do on behalf of landowners everywhere. He said the purpose of the meeting is to listen to the next speaker, Don Zaengle, a consulting geologist for the Coalition. Mr. Zaengle previously worked 20 years for Shell Corporation. Mr. Zaengle’s talk will be about the geology of the CNYLC—it is important for landowners to understand the geology and how it affects the lease terms they will ultimately receive.

Kurkoski gave an overview of the relatively brief history of drilling in the Marcellus Shale in New York State. He said after the stock market crash of 2008, Chesapeake Energy, one of the world’s largest natural gas drillers (and the largest in the U.S.) was in such poor shape financially they had to strike a deal with Norwegian company StatoilHydro to “stay alive.” Two short years later with the start of drilling in the Marcellus in Pennsylvania and West Virginia, Chesapeake has “taken off” (like a rocket). According to Kurkoski, “Our area [the Marcellus Shale] is the focus of the world. It is a world-class natural gas play.”

In 2008, landmen started going door-to-door saying inaccurate things to landowners in an attempt to get them to sign leases. At that point, coalitions started to form to help protect landowner interests and to seek out reliable information so landowners could negotiate with confidence with energy companies. Coalitions, according to Kurkoski, have the best interests of landowners as their sole aim.

Energy companies are looking for entire regions to drill—regions with the kind of shale characteristics that match their drilling goals. Kurkoski said, “You just can’t get a good deal on your own—the best way is with a coalition.”

So what is going on currently with New York State and drilling? About 21 months ago New York Gov. David Patterson issued a moratorium on horizontal drilling that uses hydraulic fracturing. That is, drilling in the Marcellus Shale was banned until the New York Department of Environmental Conservation (DEC) could update the Generic Environmental Impact Statement (GEIS) that all companies must follow when drilling. The GEIS is a set of guidelines for drilling. The new changes to the guidelines are called Supplemental, hence SGEIS.

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Central New York Landowner’s Coalition Rally: Opening Remarks by Pres. Richard Lasky

MDN attended a major meeting of the Central New York Landowner’s Coalition (CNYLC) on Saturday, April 10 at the Unadilla Valley Central School just outside of New Berlin, NY. The CNYLC, expecting record-breaking crowds, held two identical sessions on Saturday, one at 9:30 am and the other at 1:30 pm. The purpose of the meeting was to inform area residents about drilling in the Marcellus Shale, and to “make a loud statement” to New York’s political leaders that people in Central New York want drilling to happen.

The check-in lines were long as people arrived, with many brining a copy of their property deeds so they could begin the process of joining the Coalition and to find out if their property would qualify for drilling. Due to long lines and the high number of people attending, the session did not actually begin until after 10 am.

Three people addressed the morning crowd, which MDN estimated to be 600-700 people sitting the school’s sizeable gymnasium. Attendees sat on hard bleachers for nearly two hours, listening intently.

First to speak was Richard Lasky, the president of CNYLC. He opened his remarks by addressing a question he gets asked “all the time”: When will CNYLC negotiations begin with energy companies? His response was, “When the drilling moratorium from the Governor has been lifted.” Only when permits are granted will the energy companies return to the bargaining table with collations and landowners in New York State. Lasky said CNYLC and other coalitions across the State are trying to pressure the government to lift the ban on Marcellus drilling.

Lasky encouraged those attending to seek out the Coalition’s website and interactive online forum, which he says has received over 300,000 “hits” in the past two years. The online forum is a place for people pro- and anti-drilling to discuss what’s on their minds in relation to the issue of drilling in the Marcellus Shale.

Lasky also warned about unscrupulous landmen whom, he says, are still going around and telling landowners that energy companies will not sign with landowners who belong to coalitions—something Lasky says is a flat out lie. He urges landowners to not negotiate with landman, and above all, before signing anything, landowners absolutely must show it to a lawyer first. Even the standard lease that the CNYLC has crafted should be shown to a landowner’s personal attorney. Lasky said the CNYLC lease is an excellent lease, environmentally conscious, and that the CNYLC is “not a pushover coalition.”

The CNYLC is a non-profit, volunteer organization and the steering committee, including Mr. Lasky, are not compensated. Lasky said they need to fundraise in order to advertise and let area residents and government officials hear the landowner’s viewpoint on the matter of drilling in the Marcellus Shale. He said that, “It’s your land, your taxes, and your life.” You should be able to drill on your land if you want to.

Finally, in his closing comments after the other two speakers were done, Lasky said that landowners’ mineral rights and leases will not be “watered down” by joining the CNYLC. He was referring to the widely varying geology represented in the coalition. Depending on the goals of an energy company, some landowners’ geology will be more valuable than others, and according to Lasky, those landowners should receive move favorable lease terms. That is, the Coalition will not force a single energy company to take all of the land on the same terms. It’s likely that the Coalition will negotiate and enter into agreements with several different energy companies on behalf of its members. It is not a “one size fits all” Coalition.