Tuesday, May 24, 2011

In Defense of Forced Pooling:
Clowns to the Left of Me, Jokers to the Right, Here I Am...

[I wrote this this morning as a comment on an item appearing in Marcellus Drilling News — a commendable, forthrightly pro-drilling web site resurrected from a hiatus in January 2011 (but without ever a full explanation) by owner, Jim Willis.  As time goes on, I suspect Willis's project could become as key an informational resource in Appalachia as such web-based outlets as Million Dollar Way, touting ND's Bakken; the Powell Shale Digest, launched to cover TX's Barnett; or the Haynesville Play Blog, on doings down on the LA/TX line.  For the time-being, though, MDN is necessarily much more about politics than it is about production.]

Key angles that get consistently overlooked in the debate over forced pooling — over-heated as it's become, from both the side of the left, and the right:

Forced pooling is the legal mechanism by which two or more lease-holding companies can be compelled to work together, benefiting royalty-seeking landowners who already signed, but with separate companies.  In PA, the status quo is that many mostly leased areas won't get drilled (or will get drilled only part way), because there's a blockage caused by a well-positioned speculator who performs no useful economic work — except to take a lease, and then to put his hand out for way more than his fair share of the proceeds of the gas wells.


Forced pooling (together with an up-to-date dormant minerals statute) can also sort out unproductive gray areas where there's nobody on hand and findable with clear-enough title to sign the necessary lease — such as cemeteries, or really old oil and gas severances, etc.  In a state such as PA, clinging to antique statutes, these title glitches can in fact limit the drillbit's horizontal reach, but for no defendable reason of actual private property rights, or fairness.  Instead, in these cases, the law is truly an ass.


Lastly, forced pooling traces its political history to "progressive" and "conservationist" philosophies — both of which are precursors to the very same environmental movement that now finds the situation convenient and useful for decrying these sorts of laws.  If we, as a society, have our rules set up so as to leave behind a hodgepodge of odd-shaped parcels of undrilled and unfracked shale — rock that can never again be economically revisited — then this is the functional equivalent of wasting a future generation's share of a finite, non-renewable natural resource.


On this, I ask — where is the hew and cry?

Monday, May 16, 2011

Dick Downey of Otego:
I Sit With The Walmarts

[Blogger's note:  This piercing piece of text first appeared in the Oneonta Daily Star on March 12, 2011, though it would certainly have also made sense as a featured op-ed on the pages of the New York Times (assuming that paper still carries any remaining aspiration to speak to, and for, all of New York State), which — let's face it — ain't gonna happen, so let's just re-run it here, already, with the author's permission.

This was written by Dick Downey, a retired NYC school teacher, 76 years old, relocated upstate to the Otego, NY, area — on the banks of the Mighty Susquehanna — for about 20 years now.  By email, Downey tells me this about his suddenly realized, post-retirement role as an unpaid organizer for upstate landowners:

"When the gas companies started sending their landmen into the area three years ago, myself and my 81-year-old neighbor, Anna Hein (another NYC Board of Ed retiree), started organizing our neighbors.  We now have 31,000 acres and about 300 landowners in the Unatego Area Landowners Association (UALA) in a cachment area of 60,000 acres.  We've got a lease, a lawyer, and a viable organization that meets every two months and keeps together with bulletins, newsletters, phone trees, etc."]

As a gasser walking into a meeting, I look for team jackets, denim and feed caps — the Walmart people.  On the other side of the aisle, literally and figuratively, are the LL Bean people. 

I sit with the Walmarts.

The class divide in this argument over drilling is the elephant in the living room.  Everyone's aware of it, but nobody's talking about it.  It pits generational farmers against the newly arrived, well-to-do pensioners against those just hanging on.  It's Brewery Ommegang/Bud Light, opera season/deer season, those who work with their hands and those who work with their mouths.  It's private college/community college, people up the back roads and folks who live in the village.  It's old '60s radicals and those who did their tour of duty, Universal Unitarian social activists and Main Street Baptists.  It's upstate/downstate, liberal/conservative.  I could go on. 

All broad generalizations are a little rough around the edges.  This one is, too.  I know several Americans for Democratic Action gassers and more than a few Tea Party antis but, in the main, when you walk into a room, you know where to sit.

No matter where you sit, most folks love this area.  Those who migrated to Otsego County have chosen it as their place to live and die.  The "generationals" have always called it home.  Few want to leave.  However, many can't stay.  Good jobs with upward mobility are scarce.  So when gas drilling opened options, two visions for the future of Otsego County collided.

One vision sees a Currier and Ives landscape with picturesque villages, sustainable farms, unspoiled vistas, bed-and-breakfast hostelries, cultural tourism with an active arts scene.  The "good life," a nice place to live and visit, near hospitals, museums and colleges.  Think of a rustic Boca Raton or Scottsdale, with a bit more ice and snow.  People who envision this future don't want drilling.  Drilling intrudes on their vision.

The other side of the room lives in another reality.  Full-time farmers making $10,000 a year, the wife driving a school bus for the health insurance and the husband working at Lowe's to support the farm.  Or 120 acres going to brush, the land in the family for four generations with the fifth generation working at Amphenol, hoping the job and benefits don't go offshore.  Or two young stonemasons doing all right in the warm months but plowing driveways and painting an occasional kitchen in the winter just to hang on.  It's businesses, maybe doing OK, but limited by the perpetually depressed upstate economy.  They'd love to expand, hire someone else besides the brother-in-law.  They can't.  Some larger businesses that hire a dozen or so people, trying to get to the next step but…  there's nothing out there to warrant it.  Downstate/out-of-state landowners who inherited the land or bought the property for recreation or retirement.  The taxes they pay send our kids to school and pave our roads.  They want to fix up the old place, maybe build a new house.  All these folks have visions.  Their visions, their hopes and dreams, require new industry, new opportunities for our area.

With drilling, they see this opportunity.

The environmental organizations that oppose drilling and support sustainable small-scale development have been around for years.  Their websites tout their accomplishments -- forums, the Farmers' Market and Kid Garden in Cooperstown, their opposition to the Marcy Line, and the windmills in Jordansville.

However, people on the other side of the room tell me small-scale sustainable and forums won't pay the rent.  Consider the following:  Over the past decade Otsego County's population has remained static (0.1% decline).  Dig deeper and you see a far less stable situation.  In that same time frame our area's school population declined from 17,500 to 14,500, an 18% decrease.  Richard Dietz studied upstate New York migration patterns for the Federal Reserve.  He found that while the out-migration of young to middle-aged adults conforms to national norms, New York ranks 49th out of 50 states in replacement in-migration.  Working-age adults (and their children) are not coming to upstate New York.  Those here with jobs and benefits think twice before changing jobs for upward mobility. 

Why?  Good jobs are scarce! 

The result — our young population is hollowing out due to limited opportunity.  Nice place to retire; tough place to make a living.  Their world, our world.  Our common ground is a love of the land.  For those of us with family buried up on the hill, something deeper.  We who support gas development know there will be disruption, some inconvenience and change. We embrace that change.  We, too, want strong environmental regulations and consistent enforcement.  Many of us have created leases that underscore that desire.

However, I don't hold up much hope that we will meet on that common ground.  James "Chip" Northrop sneers at us "frack babies" (his term) and James Dean of Cooperstown wants to sue us.  Fair enough.  We, in turn, call them NIMBYs.  We ask how they are going to drive their Audis and BMWs or stoke up their Viking or Wolf stoves without using a hydrofracked carbon shipped in from some other place.

However, what really makes our blood boil is the elitist tinge to their conversation; that we knuckle-draggers just don't get it, that only they have the vision of the greater good.  Well, folks, we get it.  Many of us live in the just-get-by world they wish to maintain.  We think there is a better way, and, in the long run, one that leads to a more sustainable society with greater social equity and fewer societal costs:  Farmers able to farm instead of having to sell off parcels to retirees.  The disenfranchised with good jobs.  Businesses created and expanded to service the new industry.  Opportunities to attract and keep young families in our area.  Sorry for your inconvenience and the temporary disturbance of your viewshed.

It is our vision of the future that keeps us sitting on our side of the room, our arms folded.

Sunday, May 15, 2011

Recent Drilling Activity in New York — Through ~ May 13, 2011

Again, focusing outside of New York's traditionally most active oil and gas areas in the westernmost part of the state, here is the latest available information on drilling permits applied for or permitted, or wells spudded, bottomed out, completed, or plugged.  


A close observer will note that there's more to drilling in New York than just oil and gas exploration and development.  In fact, this list of recent activity reveals two commonly occurring — but not very commonly known — situations where somebody would want to drill a well, but without it having anything to do with fossil fuels:

1) Salt-mining (two different developers active in Wyoming County).

2) Geothermal (a not-for-profit institution which has obtained permits for two green energy wells designed to help heat its buildings — on Staten Island, where the bedrock is undoubtedly non-sedimentary).


Date
Event
Well Type —
Formation
(Orientation)
Well Name
Operator
County
(Town)
Map It
5/13/2011 
Spudded
Oil Development —
Fulmer Valley
(Vertical)
Schultz 9A
Yahn & Yahn Inc.
Steuben
(West Union)
5/12/2011 
Permit
Issued
Gas Wildcat —
Herkimer
(Horizontal)
PARRY B 2H
Norse Energy
Corp USA
Chenango
(Smyrna)
5/12/2011 
Permit
Issued
Gas Wildcat —
Herkimer
(Horizontal)
PARRY B 1H
Norse Energy
Corp USA
Chenango
(Smyrna)
5/12/2011 
Spudded
Brine —
Salina
(Horizontal)
Hooker 166
Occidental
Chemical Corp
Wyoming
(Middlebury)
5/12/2011 
Reached
Total Depth
Oil Development —
Fulmer Valley
(Vertical)
Schultz 10A
Yahn & Yahn Inc.
Steuben
(West Union)
5/5/2011 
Permit
Issued
Geothermal —
N.A.
(Vertical)
Staten Island
Mental Health
GT Well 1
Fund for the
Advancement of
Mental Health
Richmond
(Staten Island)
5/5/2011 
Permit
Issued
Geothermal —
N.A.
(Vertical)
Staten Island
Mental Health
GT Well 2
Fund for the
Advancement of
Mental Health
Richmond
(Staten Island)
5/3/2011 
Spudded
Brine —
Salina
(Vertical)
Hooker 167
Occidental
Chemical Corp
Wyoming
(Middlebury)
4/20/2011 
Spudded
Gas Wildcat —
Herkimer
(Horizontal)
Chiulli 160
Norse Energy
Corp USA
Chenango
(Smyrna)
4/18/2011 
Spudded
Brine —
Salina
(Horizontal)
Hooker 114
Occidental
Chemical Corp
Wyoming
(Middlebury)
4/14/2011 
Plugged and Abandoned
Gas Development —
Oneida
(Vertical)
SJGS 1
Norse Energy
Corp USA
Madison
(Lebanon)
4/14/2011 
Spudded
Gas Development —
Herkimer
(Horizontal)
Chiulli 161
Norse Energy
Corp USA
Chenango
(Smyrna)
4/12/2011 
Plugged and Abandoned
Gas Wildcat —
Herkimer
(Horizontal)
Hillage 2H
Norse Energy
Corp USA
Madison
(Eaton)
4/11/2011 
Permit
Issued
Gas Wildcat —
Herkimer
(Horizontal)
TK DAVIS 2H
Norse Energy
Corp USA
Chenango
(Smyrna)
4/11/2011 
Spudded
Brine —
Salina
(Vertical)
Hooker 182
Occidental
Chemical Corp
Wyoming
(Middlebury)
4/11/2011 
Permit
Issued
Brine —
Salina
(Horizontal)
Texas Brine
Company 118
Texas Brine
Company, LLC
Wyoming
(Middlebury)
4/11/2011 
Permit
Issued
Brine —
Salina
(Vertical)
Texas Brine
Company 119
Texas Brine
Company, LLC
Wyoming
(Middlebury)
4/11/2011 
Permit
Issued
Brine —
Salina
(Vertical)
Texas Brine
Company 120
Texas Brine
Company, LLC
Wyoming
(Middlebury)
4/11/2011 
Permit
Issued
Brine —
Salina
(Vertical)
Texas Brine
Company 121
Texas Brine
Company, LLC
Wyoming
(Middlebury)
4/5/2011 
Plugged and Abandoned
Gas Wildcat —
Herkimer
(Directional)
Carhart 2H
Norse Energy
Corp USA
Madison
(Eaton)
4/1/2011 
Plugged and Abandoned
N. L. —
Medina
(Vertical)
Merle, G 1
New York Gas & Oil Co, Inc.
Wyoming
(Attica)