Tuesday, May 14, 2013

A Modest Proposal: Drill-Ban Towns Could Just Ask Folks to Vote with Their Square Feet

I realize this idea will never fly.  But it would be much fairer than the current confiscatory state of affairs regarding shale gas in New York, where the winners don't even bother seeking to meet the losers half-way.

Rather than put in a temporary moratorium or permanent ban on drilling, New York townships could simply rent the underlying mineral rights — and then decline to use them.  It's not a solution that relies on blunt regulation, or fiat, but on compromise and horse-trading.

It's very similar to a public agency, or an environmentally minded group, buying development rights, sometimes also known as conservation easements.  These involve willing sellers, willing buyers, and prices they meet at someplace in the middle.

In New York, towns wouldn't have to lease everything.  Just a tad above 40%, on average, crazy-quilted across the landscape, would prevent any serious operator from qualifying for a state permit for anything other than an old-school vertical well.

Town leaders could just sit down with the grassroots landowner coalitions and negotiate the price on a 5- or 10-year model lease:  Joe and Josephine Landowner, Lessor, to Town of Freakout, Lessee.  And then the town would have to pay up, of course.  And, yes, you'd have to do it all over again in five or ten years, if the townspeople haven't come around to any kind of New Religion in the meanwhile.

To motivate the marketplace, a town could run it as a first-come, first-serve, limited-time-offer kind of thing — at least until its quota is reached, at which point they could close up the lease-buying shop, and the latecomers lose their chances.

Put the word out what the standing offer is, buy some lunch for a few otherwise idle notaries public, and schedule a couple signings en masse.  Possibly sync these events up with a chicken barbecue or something, and put on some heartfelt presentations in the school auditorium themed "Peace in Our Time."

People with a lot of land effectively get a discount, or possibly even a rebate, on their land taxes.  Villagers and small lot holders make up the difference.  It's an end to the bully's free lunch of getting away with just pushing people around.

Ever-mistrustful anti's would be free to boycott the proceedings by either relying instead upon their tallies of acreage that's already pledged to never (again) be put under lease.  Or by leasing all their land, for a nominal price, and for the same no-drill purpose, to an organization they feel confident will never do anything with those rights.

Vote with your square feet.

Either way, you add it all up, and you could put a rough pricetag on the preliminary costs of a community's decision to decline the opportunity shale gas poses — at least within the current climate of nagging skepticism that New York will ever be able to get its act together on this score.

The point is these bans cost something.  For those landowners willing to turn down such an opportunity, and to eat those costs on principle, I see it as a matter of private rights and choice, and I cannot object. 

But for those who demand to be compensated for something owned — something that's essentially being confiscated from them by popular will — show them the money.  To me, it's just another side to the coin of "environmental justice."

Then put the whole lease plan to a referendum, including the final costs.  If the townsfolk start back-peddling when the final bill comes due, well, then, that should tell you something about the depth of their current mania.

All this is the same kind of tough choice anybody faces in any kind of legitimate marketplace:  If there's no cost to the proponent, demand is unlimited, but, if there's skin in the game — well, then, not so much.

Friday, May 10, 2013

Millennium Pipeline Floats Upstate North-South Natural Gas Connector

Yet another chance for New York's anti-development forces to say "not in my backyard," even while thousands of Upstate residents, businesses, and institutions — including Whitney Point, NY, my hometown — continue to have no competitive consumer-level energy options other than electricity, trucked-in fuel oil/propane, or the joys of firewood.


The developer — a consortium known as Millennium, which includes National Grid as a member, and which already controls the main west-east pipeline through New York's Southern Tier — floated trial balloons on this 60-mile south-north natural gas pipeline plan on May 9-10, 2013.  Unsurprisingly, no mainstream or web-based outlets have so far gone to the trouble of posting the map, which to me is the most interesting thing.  So I dug it out myself.

Right now, and for the rest of the month of May, Millennium is just shopping for enough transmission customers to justify building at least a 24-inch diameter line.  If there's more than enough interest, the pipe could go bigger.  On the other hand, if there's not enough need — measured exclusively by the private sector, according to future flow commitments — then this thing could easily die an early death, and we in New York can go back to our regularly scheduled programming.

The project is going to go by either the dull name Phase 1, or the somewhat more descriptive North-South Upstate Pipeline Connector.  The concept — the same as several other already built, building, or proposed plans — is to get around the Northeast U.S. west-east bottleneck by sliding burgeoning WV-OH-PA shale gas production to open west-east pipeline capacity to the north.  Big city markets in New York and New England would be very quietly using up most of it, although I suppose the politically testy natural gas exports angle could be a factor in the long run (no such proposals have been put forth yet in the Northeast).


From a very provincial perspective, but one that happens to be very important to me,
this pipeline could put an end to that sorry lack of energy choices in small towns in the Tioughnioga River valley.  But I'm already certain that this pipeline plan is going to turn into another branch of the larger political fight over shale gas, regardless of what New York State ever winds up deciding (or failing to decide) on this issue, so far as its own citizens' undeveloped resources are concerned.

I know there are always winners and losers in politics, but this kind of reflexive conflict in New York State is getting ridiculous.


At this point, I think I would welcome an activism-imbued township, somewhere along this route, seeking to naively try enforcing a ban on not only all localized drilling, but also through-transport of fossil fuels by pipeline.  Such a "Home Rule"-inspired ban should eventually be crushed under the principles of federally protected interstate commerce.

(But, then again, maybe not.  Maybe the balkanization of New York continues and prevails, no matter what the long-term up-shot of all this might be.)

We've already seen in New York, at least for the time-being, that "Home Rule" is capable of both politically and legally trumping long-standing private property rights, much to the dismay of local landowners who mistakenly thought they still held onto something constitutionally protected against popularly inflamed confiscation.  My hope would be that pushing "Home Rule" to the next level should expose the fact that it's really just "States Rights" for green reactionaries, where provincial interests go too far by getting in the hair of the larger public interest.

Reading further between the lines of Millennium's announcement (which you can peruse for yourself here):

"Millennium has executed a Memorandum of Understanding with the owner of an existing pipeline and the related right of way associated with that pipeline.  Millennium has completed a preliminary constructability assessment of the right of way and has conducted a review of the property records underlying that right of way and has determined that the right of way for the proposed extension is usable from both a constructability and land rights perspective."

Translation:  To minimize the impact, the pipeline planners want to "co-locate" this natural gas pipeline alongside an already built, refined and liquid fossil fuels pipeline (which should be familiar to locals on the ground with its orange or yellow markers).  To my knowledge, this should be the Sunoco Corporation's 8-inch line, which moves refined product from Philadelphia, PA, to an end point in Brewerton, NY.  This is historically known as the "Sun Pipe Line," and probably dates from, like, the 1930's.

Question:  Does the developer actually propose it won't have to pay host landowners to expand the use of these old easements — because it's going in as a sub-tenant under open-ended boilerplate language in these old documents?  That's not a good start, and I sure hope not.  They're going to have a big enough fight on their hands, as it is.

Wednesday, May 1, 2013

ExxonMobil's XTO Now Camped Out With 5 Wells In NY's Stalled Shale Gas Queue

[Original post Feb. 27, 2013.  Updated May 1, 2013 upon receipt from DEC Albany of the two Delaware County unit maps proposed by XTO.]

Three more full-on Marcellus shale drilling applications from ExxonMobil subsidiary XTO Energy popped within New York State's electronic records during Feb. 2013. 

Adding these three to two previous XTO filings — previously reported here and here alone in Oct. 2012, but now re-cast with this fresh update — I've mapped all five projects
with pins marking top and bottom holes below, and summarized all five at the end of this post (together with links to detailed maps of the proposed units, when I get my hands on the new ones).

View XTO Energy (ExxonMobil subsidiary) — Five Marcellus shale gas applications in NYS in a larger map

Significant?

These are the first of any sort of application statewide for XTO, never before an active driller in New York State by that name.

But they're
also the first horizontal shale gas requests from a well-known, well-funded developer — at least since New York State started informally refusing such applications sometime during the early months of its now fully 5-year-old bureaucratic blockade against this new enterprise.  A number of pre- and early-moratorium applications still technically sit idle within the DEC's electronic records, but so many of the underlying leases have lapsed in the meantime — or fallen under the legal cloudiness of the force majeure issue — all of these old applications are likely to be scrapped, or to be total do-overs.

XTO's projects are all within Broome County's easternmost Sanford or the adjoining Township of Deposit in Delaware County.  Both townships sit just north of the politically significant NY-PA state line (though the shale has been sitting for many years under both jurisdictions without knowing the difference).  While Deposit looks as though it sits wholly within the Delaware River drainage, Sanford straddles the watershed divide between the incapacitated Delaware Basin, and the much more accommodating Susquehanna River drainage area.  (Yes, they're both free-flowing rivers; but, again, it's just that the bureaucracies are different.)

Nonetheless, the surface pads for all of these XTO wells —
including the Dew Dec A 1H, which I'm told is named for landowner Dewey Decker, Sanford Town Supervisor, and an early advocate for upstate's budding lease opportunities — are proposed for hilltop wooded terrain draining ultimately to the Delaware, not the Susquehanna.

What this all means is that XTO — for reasons that probably only an optimist could explain — is now ready and eager to get into a line that's been long blocked, not by one, but by two, shale gas moratoriums.

For the first moratorium, New York environmental officials have been flat-footed since Feb. 15, 2008 (the date of the first such stalled application anywhere statewide from industry).  Then
— since July 23, 2008, the birth date for the tortured and still-unresolved SGEIS process — these officials were busy coping with studious delay, and unprecedented public commentary, on this question.

For the second moratorium, the federal-state compact Delaware River Basin Commission has been stymied from reaching a consensus (or even just taking a vote) on its own version of over-lapping regulations governing such activity.  Unlike the similar, adjoining federal-state compact Susquehanna River Basin Commission, the DRBC decided early on it had to do much more than simply regulate water withdrawals in its zone of influence.  But then the DRBC's proposed, over-the-top regulatory scheme got bogged down in politics, same as in New York — a pool of quicksand from which the path of least (short-term) resistance always seems to mean... don't sink; don't swim; don't even struggle; just delay, delay, delay.

These XTO applications also represent a challenge to anti-leaning observers (most mainstream reporters, and a handful of pseudo-journalistic bloggers), as well as to basically-burned-out well-wishers for progress (such as myself, at least on certain days) — all of whom have become increasingly hopeful/fearful that indigenous shale gas will never be produced from under gridlocked New York.  (At least not within the foreseeable future.)


It's true that financially troubled Norwegian penny stock Norse Energy has made similar filings —
camping out in the DEC's stalled shale gas queue since July 2011 with 29 new, mostly horizontal, Marcellus and Utica shale applications.  But it's been easy for many to ignore Norse's efforts as a persuasive stunt, or as a prop to the hopefulness of its investors, or as a sweetening to its underlying assets for an eventual sale.

But now well-heeled XTO joins bedraggled Norse to "occupy" New York's line.


Hmmm...

API Well Number:  31007300060000 (proposed unit map obtained and uploaded off-site here)

Well Name:  Dew Dec A 1H
Company Name:  XTO Energy
Well Type:  Not Listed
Well Status:  App to Drill/Plug/Convert
Objective Formation:  Marcellus
County:  Broome
Town:  Sanford
Status Date:  10/11/2012
Permit Application Date:  10/3/2012
Well Orientation:  Horizontal
Surface Longitude:  -75.519335
Surface Latitude:  42.064837
Bottom Hole Longitude:  -75.506605
Bottom Hole Latitude:  42.054007
True Vertical Depth:  6050
Bottom Hole Total Measured Depth:  11000
Drilled Depth:  11000
Proposed Well Type:  Gas Wildcat
Spacing: 
Spacing Acres:  619.1
Integration: 
Last Modified Date:  10/11/2012

API Well Number:  31007300070000 (proposed unit map obtained and uploaded off-site here)
Well Name:  Cempa Unit A 1H
Company Name:  XTO Energy
Well Type:  Not Listed
Well Status:  App to Drill/Plug/Convert
Objective Formation:  Marcellus
County:  Broome
Town:  Sanford
Status Date:  10/11/2012
Permit Application Date:  10/3/2012
Well Orientation:  Horizontal
Surface Longitude:  -75.503886
Surface Latitude:  42.079922
Bottom Hole Longitude:  -75.514772
Bottom Hole Latitude:  42.091136
True Vertical Depth:  6077
Bottom Hole Total Measured Depth:  10795
Drilled Depth:  10795
Proposed Well Type:  Gas Wildcat
Spacing: 
Spacing Acres:  635.2
Integration: 
Last Modified Date:  10/11/2012

API Well Number:  31025300000000 (proposed unit map obtained and uploaded off-site here — after waiting out a nearly 2-month Freedom of Information Law delay engineered within DEC Albany)
Well Name:  Begeal 1H
Company Name:  XTO Energy
Well Type:  Not Listed
Well Status:  App to Drill/Plug/Convert
Objective Formation:  Marcellus
County:  Delaware
Town:  Deposit
Status Date:  2/20/2013
Permit Application Date:  1/18/2013
Well Orientation:  Horizontal
Surface Longitude:  -75.35141
Surface Latitude:  42.017858
Bottom Hole Longitude:  -75.355152
Bottom Hole Latitude:  42.033241
True Vertical Depth:  5870
Bottom Hole Total Measured Depth:  11170
Drilled Depth:  11170
Proposed Well Type:  Gas Development
Spacing: Conforms to statewide spacing under Title 5
Spacing Acres:  633.23
Integration: Integration order pending
Last Modified Date:  2/20/2013

API Well Number:  31025300010000 (proposed unit map obtained and uploaded off-site here —
after waiting out a nearly 2-month Freedom of Information Law delay engineered within DEC Albany)
Well Name:  Shaefer Unit 1H
Company Name:  XTO Energy
Well Type:  Not Listed
Well Status:  App to Drill/Plug/Convert
Objective Formation:  Marcellus
County:  Delaware
Town:  Deposit
Status Date:  2/21/2013
Permit Application Date:  1/18/2013
Well Orientation:  Horizontal
Surface Longitude:  -75.365989
Surface Latitude:  42.121412
Bottom Hole Longitude:  -75.372014
Bottom Hole Latitude:  42.128093
True Vertical Depth:  5995
Bottom Hole Total Measured Depth:  10732
Drilled Depth:  10732
Proposed Well Type:  Gas Development
Spacing: Non-statutory unit under Title 5; conforms to policy objectives
Spacing Acres:  579.95
Integration: Integration order pending
Last Modified Date:  2/21/2013

API Well Number:  31007300080000 (proposed unit map uploaded off-site here)
Well Name:  Kelly Unit 1H
Company Name:  XTO Energy
Well Type:  Not Listed
Well Status:  App to Drill/Plug/Convert
Objective Formation:  Marcellus
County:  Broome
Town:  Sanford
Status Date:  2/21/2013
Permit Application Date:  1/29/2013
Well Orientation:  Horizontal
Surface Longitude:  -75.4611045
Surface Latitude:  42.098447
Bottom Hole Longitude:  -75.468786
Bottom Hole Latitude:  42.108737
True Vertical Depth:  5873
Bottom Hole Total Measured Depth:  10088
Drilled Depth:  10088
Proposed Well Type:  Gas Wildcat
Spacing: Non-statutory unit under Title 5; review in progress
Spacing Acres:  555.49
Integration:
Last Modified Date:  2/21/2013