Tuesday, November 30, 2010

NY Shale Gas News — November 2010

Hello Upstate — my Upstate!

• Mon., Nov. 29
— Near the midnight hour, New York State's Lame Duck Assembly joined the other house in stampeding to passage, 93-43, a temporary overlapping moratorium on drilling for shale gas.  I awoke the next morning — unhappy at the news — and wrote a blog piece I called "New York's Shale Gas Moratorium:  Perpetually Temporary," which basically explains most of the nuances of this dismal news.  Even though I used the word "screwed" — which I'm pretty sure is still problematic for most family newspapers — I emailed it off to the Op-Ed desk at the Syracuse Post-Standard — because it turns out I actually stopped before I rambled past their limit of 600 words.  We'll see.  Then I went out on some errands in downtown Syracuse — a haircut, some lunch, and a swim — and I came home and wrote non-stop an "Open Letter to NY Governor Paterson:  David, Just One More Thing Before You Go."  (Yes, there was some alcohol involved.)

If you're still just sitting there — reading this, stunned — and you'd like to finally formally take sides with the True Underdogs in This Dog Fight — the Upstate New York Landowners, you can electronically ask Gov. Paterson for a veto here via the Joint Landowners Coalition of New York — an organization that I heartily recommend you sign up with, even if you don't yet own any upstate land.  Or, if you'd prefer to use industry's method of communication, you can give David your two cents here, via the Independent Oil and Gas Association of New York — an organization that I heartily recommend you keep in touch with.  (Or you can probably do both!  But do them both quickly.  The governor only has 10 days from passage to get his ball-point unsheathed.)

• Wed., Nov. 24
— As of this day, Upstate New York landowners — unwitting owners of millions, or possibly even trillions, of dollars worth of theoretically valuable shale gas — now seem to have been successfully lulled through a
Nearly Year-Long, Naively Trusting, Beddy-Bye Nap by Albany's ever-wily political establishment.  These landowners have been consistently fed a reassuring, coo-cooing message to the effect that a Handful of Still-Busy, Still-Stalwart, Still-Employed DEC Professionals have spent the last 11 months, Working Overtime, Fingers to the Goddamn Bone, addressing answers to the thousands of mostly robo-generated comments made upon the now-infamous hydro-fracking SGEIS.  All this was said to be in order that safe, regulated natural gas drilling might someday eventually return to the Empire State.  But now it turns out that maybe the DEC people, and their political bosses, have been faking the effort all along!  Here's the evidence:  Outgoing Governor David Paterson gave a Thanksgiving Eve chat with Joe Donahue and Alan Chartock of Albany's WAMC, in which he made these remarks:  "This is a very good example of public participation.  Our DEC... originally ruled that hydrofracking would not affect the water quality in the area, but we've received additional information and have not been able to come to a conclusion as to whether or not this is a good idea.  Even with the tremendous revenues that will come in at this time... we're not going to risk public safety or water quality, which will be the next emerging global problem after the energy shortage.  At this point, I would say that the hydrofracking opponents have raised enough of an argument to thwart us going forward at this time."  We can only hope Incoming Governor Andrew Cuomo has not been so easily spooked by the Forces of Panic and Obstruction.

• Wed., Nov. 24
— Just when Upstate New York landowners thought it would be safe to turn away from the Internet, and get that turkey stuffed, it became clear that Frack-o-Phobes had some after-holiday stuffing plans of their own:  R
amming the frack moratorium through NYS's Lame Duck Assembly.  "Kill the drill" activists announced plans to gather in Albany, Monday, Nov. 29, in order to turn up the heat on surviving and outgoing Assembly members.  They want the Assembly to sign off on the NYS Senate's ban on hydraulic fracturing, which overlaps (and also errantly exceeds) the current administrative moratorium, running until May 15, 2011.  If you've had enough of this, and you are a New Yorker, I encourage you to spend two seconds Firing Back HereAlso please click the automatic alert option at the end in order to involve several of your free-thinking acquaintances, should you have any.  (Look at it this way it's either two seconds, or a Continuation of Eternity, waiting for this madness to subside.)

• Tues., Nov. 23 — Cable business news specialist CNBC premiered a one-hour network cut of the indie film "Haynesville," a decidedly non-Gaslandian celebration of the changed lives of common people in Northwestern Louisiana, following the boom in that particular shale's gas play.  If you missed the first night, you will have another chance to see it on Sunday, Nov. 28, 10 pm EST.  This film focuses on the unexpected drama of real people — suddenly caught up in real money for the first time in their lives, for no reason other than just obscure geological fate.  Kinda cool.

• Mon., Nov. 22Catskill Mountainkeeper, on its web page here, put out a new campaign for frack-fearful citizens to sign onto a canned email to President Obama — a text which demands that the feds put a moratorium on new drilling permits nationally.  Only trouble is, this writing unwittingly reveals how badly misinformed modern-day environmental organizations have become:  Onshore, states issue drilling permits, not the federal government.

• Fri., Nov. 19
— In Towanda, PA — seat of Bradford County, top Marcellus shale gas producer along the banks of the Mighty Susquehanna River
Daily Review Editor Ron Hosie let loose a very nice piece of writing, taking the position that Lesley Stahl of 60 Minutes had shale gas right, while Josh Fox of "Gasland" had it all wrong.  Hosie wrote this:  "If you want a relatively quick overview of the natural gas phenomenon, watch the 60 Minutes program.  And, by way of contrast, see 'Gasland' and learn for yourself the difference between a responsible report and a hatchet job...  As we said on this page recently, the gas industry has brought about an economic boom that likely will continue to be a transformational force in this region.  In a word, it's called progress.  As the effects of the phenomenon spread, our lives, for the most part, are improved.  The future looks brighter.  Don't take someone else's word for it.  Evaluate the pros and cons.  Figure it out for yourselves.  In the final analysis, embrace the change, take control, ensure proper regulation and the means to pay for it, and see to it that if anyone is harmed, they are made whole.  But, most of all, celebrate the new opportunities, promote orderly growth, and reap the rewards."

• Thurs., Nov. 18
— It may take awhile for this to sink in, because of the natural resistance of wishful thinking, but the size of the viable part of the highly touted Marcellus shale belt just got a little smaller.  Encana Oil and Gas informed hundreds of undoubtedly heartbroken Luzerne County and Columbia County, PA landowners that natural gas is not commercially producible from their cut of the underlying Marcellus shale.  And Encana also let them know it would be surrendering their leases, rather than trying to find a more hopeful buyer, or keeping up annual payments.  Operating in the glare of a near-daily media spotlight (and also a number of scowling environmental protesters), Encana spent millions of private-sector dollars drilling two horizontal wells, and fracking one of them
both in the northwesternmost corner of Luzerne County.  But in the end it was Prognosis Negative.  Apparently, as was feared, when you get that close to Pennsylvania's famed coal belt, the same geological forces which produced the coal also over-cooked the shale, releasing the gas, a long long time ago.  All this should be a stiff leash tug on the media-approved tendency to allow Marcellus hype to be transformed into fact — long before anybody does the actual work of proving it, which in this case can only be accomplished by drilling and fracking.  Here's the full next-day story as told by the Wilkes-Barre Times Leader.

• Thurs., Nov. 18
Broome County, NY legislators by a 10-3 vote killed a proposed five-year oil and gas lease over a 3,200-acre portion of the county's own holdings, mostly the airport and the landfill.  After a false start earlier in the year, this second version of the deal was again paraded before skittish lawmakers by County Executive Barb Fiala, who was partly motivated by the unquestionably positive impact the $7.8 million signing bonus would have had on Broome's reportedly dire budget situation.  Averaging $2,438 per acre, and including 20 percent royalties, the offer seemed remarkably generous, especially in view of the fact that the signing money was due to be forked over prior to the SGEIS finale
which could conceivably turn out to be more of a slow-motion implosion, than a timely resolution.  I could be wrong, and I hope I'm wrong, but the way things are going Broome's elected reps may be showing New York landowners nothing more than how to behave as Pretty-But-Vain Wallflowers at the Shale Gas Ball.

• Tues., Nov. 16
— The City of Pittsburgh, became the first in PA to ban drilling for Marcellus shale within corporate limits. The city council vote was mostly symbolic, but it was also unanimously symbolic — which is absolutely the worst kind of symbolism.  Taking such an action is supposedly illegal under PA state law, but it won’t get challenged anytime soon, because nobody actually has any plans of doing any drilling there.  Thousands of folks in that metropolitan area make their living in some way connected to the oil and gas industry, but it didn’t seem to matter.  Next up, I expect activists in the NY cities of Rochester or Syracuse will put forth a similar Marcellus shale drilling ban — until somebody taps their shoulders to the fact that the glaciers already washed away all that rock, that far north, so not to worry.

• Mon., Nov. 15Albany-based outdoorsman and Twitter enthusiast Andy Arthur (@AndyArthur — definitely worth a follow) sent out this message to the unknowing, unseeing, unfeeling, unthinking universe:  "I figured out the solution to the hydrofracking debacle in NYS — simply move all of the Southern Tier into PA."  Despite at least one retweet, not a soul appears to have been stirred by this ingeniously bold call for Upstate New York Secession.  Nonetheless, I am recording it here, should it catch on eventually.  Even if historians wind up confused as to the origins — after, say, the Twitter archive crashes at the Library of Congress — people are going to need to know who to credit, or to blame, depending.

• Mon., Nov. 15
Newfield Exploration buys part of EOG Resources, paying $405 million for 50,000 acres, mostly in Bradford County, PA, and mostly Marcellus-shale focused.  For those New Yorkers counting chickens before they’re even conceived, that’s $8,100 per acre, which sounds pretty good.  (But this land is right in the heart of the hottest Marcellus zone, where there’s already production, and where the support infrastructure is already partly developed, and where — lastly — there's a state government that has always found a way to allow shale gas to be drilled for.)

• Mon., Nov. 15Halliburton struck back in an ongoing battle for persuasiveness against avowed enemies of fracking, and also the EPA.  This oilfield services behemoth — which has systematically built a reputation so foul that the mere mention of its name (or the phrase "Dick Cheney") is known from surveys to be capable of triggering Pavlovian Snickering from 9 out of 10 Organic Grocery Shoppers — engaged in two corporate revolutions at once:  First, Halliburton publicly released on the web the hydraulic fracturing fluid formulations it's been using, at least on Appalachian shales.  Secondly, it announced a “green” frack fluid formula, supposedly composed entirely of ingredients used by the food industry.  I haven't really read the reactions very closely, but I'm guessing there will be some reason why this wasn't good enough.

Sun., Nov. 14Lesley Stahl of the CBS news magazine 60 Minutes fronted a one-third hour segment on the pros and cons of shale gas, introducing — to me, anyway — the word “shaleionaires.”  Dead Louisiana cattle and Pennsylvanians with methane-infused well water got shown, but most pro-gas observers probably came away pleased with the generally bemused "modern-day gold rush" tone of the piece.  ("It's a gift from the good Lord," said retired oil field worker C. B. Leatherwood, memorably.)  Energy In Depth had some dutiful corrections afterwards over a few unstoppable pieces of misinformation — just-plain-wrong stuff which is now so tightly ingrained in the popular culture, not even CBS’s crack team of journalists and fact-checkers were able to separate myth from actual history.   But whaddaya gonna do?

• Fri., Nov. 12ProPublica put out a long interview with former NYS DEC chief Alexander “Pete” Grannis, who has become — since his sudden firing by outgoing Governor David Paterson — the ever-reflexive environmental community's Martyr-in-Chief for a Barren, Decimated, Crippled, Understaffed, Overworked, Barely-Able-to-Function State Environmental Agency.  I may be the only observer statewide to actually say this out loud, but much of this concern strikes me as a bit overdone, overblown, and over-the-top. 
First of all, there is no factual way the DEC is "in the weakest position that it has been since it was created 40 years ago," as the leaked Grannis-scribed memo asserted.  (Can one of these young, under-paid State Capital reporters please simply dig out that agency's payroll numbers from the 1970s, already?)  Secondly, the DEC's Minerals Division represents just a small fraction of what that agency is all about, so why does that monopolize the conversation?  Here's why:  What's really going on here is that drilling opponents are putting Grannis on a martyr's pedestal, and over-dramatizing the agency's budget-driven downsizing, because they think it helps their case for Eternal Delay.  This is especially evident, given that Grannis said right in the ProPublica interview that, of course, the DEC is going to link its drilling oversight staffing directly to the volume and pace and growth of shale gas development activity (which — have I said this,  already, someplace? — currently still stands at zero). [One last thing:  The reader comments following this interview are way more intelligent than usual — pro, con, and somewhere in-between — and I hope they survive online long enough for you to check them out.]

Thurs., Nov. 11 — Incoming New York Governor Andrew Cuomo, nine days after he's elected by a huge margin, shows up on the radio — WOR, 710-AM, the John Gambling Show, Paterson's old regular location — saying he’s all for drilling upstate, so long as it can be done safely.  This is reported as actual news, even though that's exactly the same fence he has been riding the whole time he was running for governor.

• Tues., Nov. 9
— After apparently getting a callback days later from the Anschutz PR people, Jon Campbell of the Binghamton Press reports that the 500,000 acres of Anschutz’s Appalachian leasehold which got sold to Chesapeake Energy for $850 million does not actually include any of its New York holdings.  Unreported:  Does this, or does this not, indicate that land in New York State currently has little oil and gas value under the present state of Regulatory White Knuckles over shale gas drilling?

• Tues., Nov. 9
— There's a showdown in Harrisburg, PA, in front of a highly obscure water infrastructure funding board, over whether or not to advance public funds to build a fairly expensive waterline to serve a small number of families in Dimock, PA.  Technically, the news was the board went ahead with the pipeline.  But it was interesting to see the typical media narrative getting disrupted by actual events.  Most readers are already well-acquainted with the Dimock victims — being those families whose water supplies were damaged by methane migration said to have been either caused or accelerated by nearby gas drilling — and with the obvious culprit, Cabot Oil and Gas.  However, the smooth, familiar flow of this typical narrative has gotten jostled lately — by the rise of a counter, anti-waterline citizens group, Enough Already, which basically thinks the state's solution to this water issue is needlessly expensive overkill.

Tues., Nov. 9EPA subpoenas Halliburton for the recipe on its Secret Fracking Sauce, asserting The Big Aitch was the only company, out of nine, which refused to voluntarily go along with the federal inquiry. 

• Tues., Nov. 9 — Busy day.  Chevron buys Atlas — for $4.3 billion if you include assumed debt — in order to diversify its long-standing oil focus with a shale gas effort, especially Marcellus. 
Among lots of other complicated assets, Atlas was widely reported to control 486,000 net acres in the Marcellus shale, and 623,000 net acres in the Utica shale, but to my knowledge not a single journalist was sharp enough to specify how much of this is the exact same acreage getting double-counted — what with the Marcellus layer sitting on top of Utica.  (For shame!)

• Sun., Nov. 7 — Free-thinking planning consultant Thomas J. Shepstone — on the banks of the Mighty Delaware River, in Wayne County, PA — had the temerity to dismiss "phony baloney about fracking."  By the time I got around to linking this thing, the Wayne Independent had 108 comments... and counting.  (Go ahead...  pile on...  It's a free country!)

• Thurs., Nov. 4"Shale Gas and America’s Future," a 30-minute film funded by industry front group American Clean Skies Foundation, is released.  You can order a DVD online.  I don't think they're charging much.  Public exhibitions are probably actually encouraged.  But — unlike "Gasland," or even "Haynesville" — the response has so far been... barely detectable.  I haven't even heard of any premieres, or cast parties, or reviews.  But, here — having attempted to watch it online using a very choppy DSL connection — I can give you my own take on this:  The film is intended to supplement an earlier "public education" effort, which is still represented on the web under the heading of "Shale Country."  While that low-budget picture-vid narrative was put together with warmth and simplicity and authenticity by artistically inclined Getzels Gordon Productions, this new film was done by somebody else, Hillman & Carr Inc.  Anyway, it shows.  I ain't gonna sugarcoat it.  It's okay.  It's factual.  It tries.  But you can't beat Josh Fox with this shit.  Days later, I noticed a Google-placed ad on a web page, which reveals how ACSF is actually hoping to lure viewers to this film: "Hydrofracking Exposed — New movie shows how it really works."  Ewww, boy...

• Thurs., Nov. 4
Chesapeake Energy reveals itself as the secret buyer of Anschutz’s 500,000-acre leasehold (said to be spread across PA, OH, and NY), paying $850 million, which works out to a crude gauge of $1,700 per acre. 
Jon Campbell of the Binghamton Press — who, by the way, is a million times more professional a reporter than Tom Wilber, who was formerly allowed by Gannett to daily tilt this Marcellus shale story fear-ward for Two, Long, Agonizing Years, but who is now working on a book about this conflict — had the news.  (But the NY acreage's inclusion in this deal turned out to actually be untrue — see Nov. 9.)

• Wed., Nov. 3
— President Barack Obama utters these words in the wake of the “shellacking” his party received during the Mid-Term Corrections:  "We've got, I think, broad agreement that we've got terrific natural gas resources in this country.  Are we doing everything we can to develop those?"  (If I could just translate, in other words:  "Drill, maybe, drill.")  For days afterwards, the Twitter-Sphere shows Frack-o-Phobes are completely freaked out by their Main Man's endorsement of such an obviously evil technology.

• Tues., Nov. 2
Mid-Term Corrections Day, widely seen as another angry tilt rightward, toward less government, lower taxes, and more business freedom.  PA was more or less red-shifted everywhere, but in NY, of course, blue Democrats clung to all statewide offices.  In upstate NY, though, there were races in three congressional districts which overlapped significant prospective shale gas acreage.  In those places, "To Drill or Not To Drill" became a key question in the minds of voters.  In NY-29 (Flame'n'Burn Rep. Eric Massa's old district), pro-drilling Tom Reed (R) handily defeated avowed anti-fracker Matt Zeller.  In NY-25, still-skittish-on-shale-gas Richard Hanna (R) ousted two-term Rep. Mike Arcuri, who
late in the race sided directly with Ithaca's most zealous "kill the drill" activists.  And in NY-22, leading congressional natgas obstructionist Maurice Hinchey (D) — who also broke bread with The Ithaca People — held off a closer-than-before, tea-party-infused and industry-backed challenge from George Phillips.  Not that it mattered much, but I had some choice remarks to make about Arcuri and Hinchey beforehand.

• Mon., Nov. 1 — Okay, so maybe all this was posted with an October 2010 publication date, but I still say the full spread of National Geographic's landmark shale gas coverage was not really available for reader absorption until November.  Anti-drilling activists immediately sought to suppress it from the Viralsphere on account of its ungodly sponsorship by Shell — despite assertions from the magazine's journalism team that it retained 100 percent editorial control.  I say this was an honest, colorful, and very accessible account of what could well be Upstate New York's future — the good, the bad, and the very challenging.  I wish all my fellow Empire Staters would simply give it a good read.

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