Enverus Blog

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Well, that’s the case with Delaware County land owners and the City of New York.  Delaware County elected officials are demanding that the city of New York, along with the state of New York pay $81.3 billion over the course of 60 years to land owners who want to lease their land to oil and gas operators.  The land owners’ loss of property rights extends to the proposal to ban fracking in the city’s extended watershed area.  This makes up approximately 80% of Delaware County.

Still duking it out in New YorkIn the environmental impact statement , filed by the Department of Environmental Conservation (DEC) , it states not only banning fracking in the City’s watershed zone, but also an additional 4000 foot buffer and 1000 foot buffer of any subsurface infrastructure.  That’s an additional 33,000 acres on top of the 503,000 acres already set aside in the watershed area itself.  This gives a total of 536,000 total acres potentially off limits for horizontal Marcellus drilling.

Still duking it out in New York

Gross projected value of lost revenue is the $81.3 billion figure.  However, that’s not considering how much that could be lost in missed job opportunities and property taxes.  All of this is due to the city’s attempt to avoid having to construct a $9 billion water filtration system.  Since the water filtration system itself is projected to cost $9 billion, or one –ninth the cost to pay the land owners,  it almost makes sense to simply construct the system and avoid the larger payout.  The Filtration Avoidance Determination (FAD) is presently under review by the EPA.

Below is a map generated by Drilling Info just showing permit activity over the past 5 years in New York.  Notice only 139 Marcellus permits over this time frame and just 2 in the past year.

 

Still duking it out in New York

Yet all is still pending upon ruling of a series of Marcellus Shale bills, in which one of the bills prolongs a moratorium on hydraulic fracturing until June, 1 2013.  It will be interesting to see how all of this will unfold.  Holistically, it may not be such a bad thing for either side to wait it out on court rulings.  It gives more time for the industry to perfect casing, fracturing, and completion techniques and minimizing the risk of catastrophic failure.  It also allows time for scientists to educate the general public on the safety of natural gas shale drilling and decriminalize the misconceptions involved.

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