Despite the fact that Gov. Andrew Cuomo said there is no deadline on a hydrofracking determination, the pressure is on.
New York enacted a ban on fracking more than four years ago in order to allow scientific studies of the effects of hydrofracking. The state’s Department of Environmental Conservation recently announced that the Department of Health will review the findings before making a decision to move forward and to lift the ban. Cuomo said there should be no rush put on science and facts and that a timetable would only counter the process. He said thorough review of the findings could protect the state from lawsuits, a claim that has industry executives shaking heads over.
Although Cuomo says there is no deadline, actually there is. Cuomo’s administration has until Nov. 29 to decide if it will allow hydraulic fracturing and to develop regulations. Missing the deadline would require the state to draft new rules and reopen a window for public comment. New York is likely to miss this deadline to develop fracking regulations, requiring the state to start at square one.
One thing is for sure, once a final decision is made many groups will be impacted, pro-industry groups and anti-industry groups alike. On one side you have companies wanting to make a profit and to bring jobs to areas that need them. On the other side, you have groups who are concerned about the environment and the health and safety of the public.
Here is a look at each of the groups that are waiting for a decision:
Oil and Gas Companies and Industry Organizations
Industry executives have expected a decision for months—one that would lift the ban on fracking. The industry, that once believed that Cuomo would allow science to prevail, is now wondering if the governor is teetering on that and could change his position.
These gas companies are frustrated over costly regulatory delays and delays in production. Some companies have taken a gamble on New York, assuming that the state will lift the ban and allow profitable drilling. Companies like Norse Energy Corp., a publicly traded Norwegian firm, bought acres upon acres of land looking for prosperity. Norse acquired 180,000 acres, paying for land leases—mostly on farmland—without the right to drill. The delay of a drilling decision caused a drain on capital and has led the company to cut its New York workforce to five people from 60 in 2011. The Oil and Gas Financial Journal had a short story on its website on Sept. 28 announcing that Norse is seeking to sell acreage in New York. The company wants to sell approximately 130,000 net acres near the New York-Pennsylvania border.
Since the ban took effect, Talisman Energy Inc., one of the largest independent producers in the world, moved personnel out of New York to Pennsylvania. Chesapeake Energy Corp., one of the biggest acreage holders, hasn’t drilled a well in New York since 2008, according to industry officials.
Along with the drilling companies, industry organizations are suffering the effects of a delayed drilling decision. The Independent Oil & Gas Association of New York, said the delays are disgraceful and are causing the state to lag behind. The association lost 13 of its roughly 400 members over the past year, mostly operators who paid larger dues than others.
While job seekers in other states have turned to the oil and gas opportunities to find good paying jobs, New Yorkers are left waiting to see if they will have the same chances. In a tough job market, lucrative jobs are appealing.
And lucrative jobs are abound in the industry. The average weekly income for a worker in oil and gas extraction is $1,576, according to the latest jobs report from the Bureau of Labor Statistics. That’s a 21% increase from July 2007—before the recession and the oil and gas booms in places like North Dakota and Pennsylvania.
The income for oil and gas workers is also the highest of any job in the BLS’s mining and logging category. In fact, it’s part of the reason that mining and logging is a higher paying industry sector than financial activities, according to the BLS. Employees in financial activities include accountants, bank tellers, and commodities sales agents, among others.
Bloomberg recently reported that graduates of the South Dakota School of Mines and Technology are now earning more out of college than those from Harvard.
Most areas where fracking is occurring or could occur have activists who do not believe in or support the technique. They protest and battle legislators and drilling companies claiming that fracking is a threat to the environment and to public health and safety.
They are waiting for a decision to find out the fate of their very public battle. Most recently New York has seen a few groups cropping up. Most notably is probably Artists Against Fracking. A group led by Yoko Ono and Sean Lennon and joined by other celebrities like Mark Ruffalo, Lady Gaga, Gweneth Paltrow, and others. Many of these are the same famous actors and singers who joined Mr. Cuomo in urging lawmakers to pass same-sex marriage last year.
Also joining “fractivists” are simply concerned landowners and residents of New York. These are the people who aren’t involved in extreme protests or protests of any kind. They are the ones who are sitting at home waiting to find out the fate of their properties, their water, their futures.
No matter what decision is made by lawmakers, the battle will surely never be over. One side of the battle will be happy with the decision, and the other side will be left feeling defeated. The mystery of New York’s future in the natural gas boom will continue to elude us … at least until Cuomo’s administration decides on a solid plan of action.