Norse Energy Hurt by NY Fracking Delay Files for Bankruptcy
Contrary to what anti-drillers say, lack of drilling in New York does have serious consequences—the latest consequence being the bankruptcy of Norse Energy Corp. MDN has reported over the past several years on Norse, the “little energy company that could” (we had hoped) hang on until New York released new shale drilling rules. But New York’s moratorium has now stretched on nearly 4 1/2 years and frankly, there’s no end in sight.
In mid-November Norse issued a press release saying they would run out of money in December unless they could restructure their debt (see this MDN story). They only had $1.5 million cash on hand at the time. Then, a few weeks later, a judge ordered Norse to put $7.65 million into an escrow account to cover potential losses in a dispute (see this Norse press release). Apparently the escrow judgment pushed Norse over the financial cliff. They’ve now filed for Chapter 11 bankruptcy protection:
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Both sides of the drilling debate in New York are still coming to grips with both the fact, and the way, the state Dept. of Environment Conservation (DEC) filed for a 90-day extension to the fracking rulemaking process—keeping the possibility of fracking alive in New York.
In a purely political move, the Town of Onondaga, NY (Syracuse suburb) voted last night to permanently ban hydraulic fracturing—even though a) the Syracuse watershed area, which Onondaga is part of, is expressly off limits for drilling in the DEC’s draft drilling rules, and b) such a permanent ban may not be legal (two similar cases are on appeal in NY courts).
Yesterday the New York State Dept. of Environmental Conservation (DEC) applied for a 90-day extension to the rulemaking process with respect to new rules for hydraulic fracturing (“fracking”). As MDN has endlessly chronicled, the DEC faced a deadline of yesterday (Nov. 29) to either release revised new rules, not release them and start the process all over again, or file for a 90-day extension. They opted for Door #3.