Another Terrific Essay from Richard Downey, The Voice of the Upper Susquehanna

[Blogger's note:  I'm told this was scheduled to appear in the 12/31/2011 Oneonta Daily Star, but I can't tell as of right now whether it made it or not, or how much of it made it.  Downey is a former NYC school teacher, now retired upstate, who finds himself leading a coalition of pro-drilling landowners in the Greater Unadilla-Otego area — in a pitched battle against the local forces of "sustainability," whatever you want that to mean.]

For pure chutzpah, you gotta love it.  Adrian Kuzminski tells us “NIMBY is good.”  Move over, Gordon Gekko.  “Greed is good” is so-o-o Eighties.  There’s a new mantra in town.  We’re all New Age now.

In his Nov. 19th Op Ed piece, “Sustainable Shouldn’t Be a Dirty Word,“ Mr. Kuzminski condemns a hydrocarbon based economy, population growth, consumer demand, distant sourced food, energy, and manufactured products, Big Business, Big Government, and unresponsive politicians.  He lauds revitalization of our (organic) agricultural base, and processing local products for local use. Local renewable forms of energy — wind, solar, hydro, and biomass — are good.  Listing the evils of gas (you know the drill — no pun intended), he calls for home rule.

Not a bad list.  I can get on board for some of them.  And both mantras can be boiled down to “self interest is good.”  Again, no argument from me.  It’s central to Adam Smith’s “Wealth of Nations.”  Capitalism 101.  My argument with Mr. Kuzminski is his grasp on reality and his cramped application of the term “sustainability.”

So what is reality?

Our nation gets 45% of its electricity from coal, 25% from natural gas, 20% from nuclear, 7% from hydro, and 2% from wind.  Solar barely registers.  Wind/solar exists only with massive subsidies.  Solyndra, part of a $16 billion loan guarantee package that was supposed to generate 17,000 jobs, sucked $535 million out of the taxpayers’ pockets.  Chump change, actually.  Each job in the total package is underwritten with over $940,000 of public money.  How’s that grab you?

In transportation there’s no substitute for the internal combustion engine, the diesel, or the turbine.  These engines power 94% of commerce worldwide.  Without them we’re back to the ox cart and boats with oars.  As for electric cars, remember 70% of the generating power comes from hydrocarbons, 20% nuclear.

Hydrocarbons are the feedstock for everything from grocery bags to structural resins.  From the frames of Mr. Kuzminski’s glasses to the synthetic fibers in his clothes to the elastic in his boxer shorts to the “rubber” on the soles of his shoes, Mr. Kuzminski is wrapped in hydrocarbons.  As are we all.

To get those hydrocarbons 90% of all new wells drilled in the United States are hydrofraced.  This 60 year old technology, substantially enhanced over the last two decades by incorporating horizontal drilling, has unleashed the vast reserves in shale formations that make the US the “Saudi Arabia of gas.”  Oil production is likewise increasing.  So much oil and gas is being produced that US pipelines are in reverse flow to accommodate our neighbors to the north and south.  US dependency on foreign oil has fallen from 60% to 47% over the last 5 years.  It continues falling.

With Poland, Germany, Argentina, Australia and China developing reserves, shale gas is upsetting geopolitical power balances.  50% cleaner than coal and 30% cleaner than oil, expect a dip in pollution everywhere gas replaces coal.

No man is an island.  We’re not hobbits in the shire.  From our earliest days we’ve depended on others outside our valley to produce goods that suit our needs and desires.  Somebody outside of Otsego County made the Prius that was parked in front of me yesterday.  Nobody walked to the DEC hearings.  Few of us make their own clothes.  We buy them at Walmart.  Sure, we should eat only local foods but … oh, those oranges!

Mr. Kuzminski lists the evils of drilling — bad water, gutted roads, undesirable real estate.  A suggestion:  get in your car and hydrocarbon your way down to Pennsylvania.  Talk to people; the real estate broker, the town clerk, the guy behind you at the 7-11.  Drive around.  Look at the roads.  Do you see the nightmare scenario painted by the antis?  Search for FOR SALE signs.  I found one 4 miles north of Montrose on the left hand side.  Maybe YOU can find one also!

Then come home.  Ask why are there so many houses for sale?  Why are our young leaving?  Why are our schools emptying out (18% decline in 10 years)?

Why?  No opportunities for young families.  Retirees come for the many amenities Mr. Kaminski enumerates but Otsego’s overall population stagnates, growing ever older.  We’re Scottsdale, AZ, with icicles.  An exemplar of sustainability?  Perhaps somebody‘s, but not mine.

Sustainability is a locally produced cheap form of energy called gas.  Gas will attract and retain industry (think Amphenol) and stabilize our family farms and woodlots and provide tax revenue for our towns and schools.  The good paying jobs generated will attract young workers and their families.  Only opportunity will truly sustain our community.

NIMBY is good?  Yeah, good if you’re a NIMBY.  Not so good for others looking for a better life.

More Quiet News from Big Flats Water Case: Anschutz Pushes to Get it Over With

A thick set of legal filings from 12/28/2011 shows the defending Anschutz Exploration Corporation is pushing to expose the Fall 2010 water contamination complaints from Big Flats, NY, homeowners as groundless.

Anschutz, in a nutshell, is saying, "There's no there there."

As I did previously, when noting the inconvenient fact that NYS DEC specialists had already reached essentially the same conclusion, but without drawing any media notice, I've gone to the trouble of obtaining and uploading highlights of these papers for all to see.

Anschutz Filings 12-28-11

I do this out of a sense of alarm that the news-consuming public is being very badly misled by the cumulative impact of current media fashion and behavior. 

In fact, New York Times reporter Mireya Navarro — in the course of some counter-intuitive reporting on the economic boom PA fracking has triggered in the still-frackless Southern Tier of NY— recently provided another example of this phenomenon.  NYT editors chose to bury some details about the Big Flats case in a blog sidebar, rather than including them in the printed version of the main story.  And yet, in the process of even that burial, Navarro reported only the DEC's preliminary findings of its investigation — and not its significantly more damning final report, which I've had posted here since August 2011.

The case of Baker et al. versus Anschutz has not seen any new filings between July and December 2011.  To me, this raises a question as to the motives and seriousness of the plaintiffs' lawyers.  If there's, in fact, no there there, let me ask:  Are these lawyers working just hard enough to keep this thing slowly rolling — mainly because the case is good advertising for them in the course of drumming up possibly more lucrative, future clients?

The contrast in media coverage of the two sides of the Big Flats case clearly has something to do with the modern definition of news:  If an apparent little guy (to whom the public is pre-disposed to feel sympathetic) comes forward with spectacular-but-vague allegations against an apparent big guy (to whom the public is pre-disposed to dislike and mistrust), then that is unquestionably news.  News of the case against Anschutz, at the point of filing, was covered worldwide — triggered by an error-laden press release from the plaintiffs' lawyers, who specialize in this sort of litigation.

If, however — months or years later — the complaint turns out to lack scientific credibility, or legal credibility, or both, the media just let it fade away without much notice.  On some level, media people must feel uncomfortable running a story that actually accomplishes the public service of getting to the truth of the matter — which is that not all of these environmental complaints have merit.

What has become of NY AG Schneiderman's attempt to impede drilling in the multi-state Delaware River watershed — by pursuing a case against the federal government on grounds of insufficient environmental review?

What has become of the Maryland AG's once-announced plan to sue Chesapeake Energy over the broken wellhead incident at the Atgas well site (Township of Leroy, Bradford County, PA), which occurred hundreds of miles upstream of the Maryland state line in the then-swollen Susquehanna watershed?

What has become of Berish versus Southwestern, originally touted as one of the first water contamination cases in PA?

We don't know, because the media are incapable of fitting the actual current facts into anything that feels, to them, like a news story.

Let the Landowners Be Heard: Video Highlights from the Shale Gas Showdown

Much as I personally respect the facts, the science, and the technology behind shale gas, it turns out the public debate on this issue is not really all that much influenced by those things.  Instead, this is a persuasive contest in which emotion counts.

So now I'm glad to see the pro-drilling landowners are finally getting their voices recorded and put out there, in a faithful, persuasive way.  I recognize a lot of faces and statements from the Binghamton hearing. 

Please, let's get this shared far and wide.

Norse Files for its Third Shale Gas Horizontal

[Update April 2, 2012:  The proposed Spacing Unit Map associated with this application has been obtained in PDF form and uploaded here.]

Chenango County is starting to look like it could become Upstate New York's Pioneer of Marcellus and Utica Shale Gas, what with all three post-moratorium drilling permit applications being situated in that rural locale.

Technically, New York's tortured SGEIS process has still not fully run its course, and the shale gas moratorium remains in place.  But there's been one exploration and production company getting in line way early for drilling permits, in anticipation that the temporary ban will be declared over sometime in 2012.

The NYS DEC's public database of regulated wells shows Norse Energy on Nov. 14 put in another application — this time for a full-on horizontal Marcellus shale gas well to be called the Martin, C. 1H.  The proposed well pad location maps out near the uphill corner of Jones Hill Road and Town Line Road in the Town of McDonough.  If it ever happens, the outermost reach of the horizontally running drillbit would be deep under the valley of Genegantslet Creek, about one full mile away, across Route 220 in the Town of Smithville.

This blog previously broke the news on two similar applications, both also from Norse:  The Norse-Housing 1H, New York's first-ever-proposed full-on horizontal Utica project, in the Town of Smyrna.  And the Nowalk, R. 3H, Town of Smithville, which ranked as New York's first-proposed full-blown Marcellus application — but only as measured since the end of New York's now-nearly-four-year-old shale gas moratorium has finally come into view.

The royalty-paying unit which is proposed to include the Martin, C. 1H — together with follow-up horizontals — would be 320.38 acres.  That's only about half the size of how these sorts of projects have been typically envisioned and promoted.  Bigger units imply more wells or longer laterals from the same well pad, and therefore also lower overall surface impact.

The Marcellus shale layer is expected to be reached 3,055 feet deep at this latitude, and the driller's fully drilled depth (vertical, plus the turn, plus the horizontal) is expected to be 8,241 feet.

One final point of interest I just happened to notice in connection with this well:  As is true with much of Chenango County, there is so much state forest land scattered about in this immediate area, it is practically certain that New York State itself could expect to have significant acreage either voluntarily or compulsorily integrated by this unit. 

What that means is — under the state's ultra-conservationist forced pooling law — the DEC as assigned representative of the state's land-bound mineral interest would face three options, the same as any unsigned owner.  (Three options, that is, beyond simply voluntarily negotiating a lease with the operator.)  The formally established process forces unsigned owners to choose between:  1) Collecting a baseline royalty, the same as the lowest private deal in the unit, but no less than 12.5 percent.  2) Letting the driller "carry" them, in exchange for production profit once the well has paid for itself three times back.  3) Ponying up enough cash to fully participate in the well.

Under state law, there is no fourth option — the minority interest veto option so yearned for by anti-drilling activists — so long as the operator holds deals with ready, willing, and eager owners of at least 60 percent of the involved acreage, including the wellsite itself and any access path.

Letter from a Colorado Driller to Cortland Landowners: Best of Luck With Your Prospect

This text was read aloud by Cortland County landowner Robert Crowley at the DEC's SGEIS hearing, held in Binghamton, NY on the afternoon of Nov. 17.

The original was received by the leader of the Taylor Land Group, which is centered in a township in eastern Cortland County.  It came by email in reply to the group having sent around — to more than 20 different exploration and production companies — coalition membership maps covering 13,000 unsigned acres.

Sent: Friday, October 7, 2011 5:55 PM

Subject: September 26th 2011

To whom it may concern at the Taylor Land Group,

I wanted to write you a quick e-mail in response to your September letter.  I don't know your group and this letter is in no way intended to throw stones at you all.  Your letter just ended up on my desk, and I wanted to write back to someone in New York with some thoughts.

We are a family-owned company out of Denver, Colorado.  We have six people in our office and are the definition of a small business.  We aren't "BIG OIL," and we appreciate the environment and the outdoors as much or more than most.  In fact, I am probably going to jump on my mountain bike after I finish writing this e-mail.

We've tried to do business in New York for the past decade and frankly it has been a very trying experience.  We've been stewards of the land, worked honestly with the surface and mineral owners, and generally tried to do business the right way.

From my grandfather to my dad to myself, we've had the pleasure of doing business in numerous countries around the world and states in the U.S., and we've never experienced the outright hostility to our industry as has been the case in New York.  Whether it is the government bureaucracy, the misinformation and outright lies about fracking, or the general hostility to resource development, your state simply does not want this industry's business.

New York very well might have tremendous Utica and Marcellus resources, but so do lots of other places like North Dakota, Nebraska, Wyoming, etc.  At some point you have to say, life is just too short and take your time, your jobs, your donations to the 4H and Fire Department, etc., and your money and put them someplace where they are appreciated and not reviled.

Like I said at the beginning, I am not pointing fingers at your group.  I just want you to know how I and probably lots of other people in my business feel.  If anyone in the Southern Tier needs a job, the most reviled company in America (Halliburton) is hiring 11,000 people this year in North Dakota alone.  Someone with a high school education can make $125,000/year within two years.  That job could be in New York, but it's not...

Best of luck with your prospect,

Helm Energy / Mega Energy

Without more detail, or more digging, I can't say with absolute certainty if this is the same Mega, but it seems likely:  MegaEnergy Operating Inc. is still the DEC-listed operator on eight at-one-time planned or drilled wells running between Steuben County on the west and Broome County on the east.  None is still active today, and the wells appear to have been designed to test Oriskany sandstone, or Trenton-Black River limestone, from 2004 onward.

The DEC's well transfers database shows MegaEnergy during 2010 and 2011 formally transferred to Inflection Energy, LLC ownership and responsibility over four additional wells in Tioga County, NY.  One was a TBR well, and the others were Oriskanys, and — since there was an interested buyer — these wells might presumably someday show some production.

Keep in mind that any well, in this part of upstate, reaching Oriskany sandstone also necessarily passes through Marcellus shale, and any well reaching Trenton-Black River goes through both Marcellus and Utica shales.  It's not unheard of, furthermore, for gas companies to disguise the true intentions of their test wells by listing a plausible-but-bogus "objective formation."

So this looks to me like a quiet business decision by at least one North American E&P company to simply give up on New York State altogether after more-than-several years of effort.  And this was not so much because of geology — but because of a hostile regulatory and cultural environment for the natural gas business.

Cuomo, meanwhile, has come into office with a tout that New York State is now open for business.

Photographs From Nov. 17 SGEIS Hearing in Binghamton: Landowners as Underdogs

This is a display from a recently formed pro-drilling coalition of both pro-business and pro-labor groups — together with landowners who originally organized themselves in order to attempt collective bargaining of leases with the drilling industry.  I'm not sure if I can put my finger on it, exactly, but the artwork has a very interesting leftist vibe to it — which, to my eye, is nicely counter-intuitive in the context of this dispute.

An anti-driller — sometime during the hearing — had apparently come along and planted signs in front of the hotel where the landowners had earlier gathered to warm up, and to pick up some swag, and to be fed lunch.  But the intrusion was soon thereafter eclipsed with more pro-gas signage, simply placed in front.

Nicole Jacobs from Energy In Depth, Northeast Marcellus Initiative.  This is an industry-organized and industry-funded web site, which has taken on the basically impossible job of correcting or counter-spinning significant misinformation coming from the anti-drilling side.  The freaky-but-effective, frack-related distortions have been very successfully spread by the Internet, or during in-person "educational forums" in the PA and NY areas over the last three or more years.  EID Northeast, on the other hand, has been trying to dig the pro-gas side out, since sometime earlier this year.

This was a new T-shirt on me, sponsored, as you can see, by www.energycitizens.org, which looks like another outreach attempt from the American Petroleum Institute.  If it were up to me, I would not have printed anything on a yellow background.  But these did at least stand out for the day.

An usher told me the Forum officially held 1,527 seats.  But they didn't use the balcony to seat the crowd during the 1-4 p.m. session.  So I would say attendance in Binghamton on Nov. 17, midday round, was around 1,200.  It was tight, and occasionally more than a little testy.  That is Victor Furman with his arms folded on the right.  He earlier gave the DEC a three-minute piece of his mind, and he has also become a persistent pro-drilling voice in the Binghamton area, especially on the letters page, and in the thoroughly over-heated comments section of the online Press and Sun-Bulletin.

This is Hazel Brandt from Windsor, NY, and her very powerful, very personal, pro-drilling statement has been since preserved by EID-Northeast here.  Definitely worth a read.  She had to drop her cane in order to handle her notes.

.

The NYS DEC took testimony from as many speakers as they could fit in, between 1 and 4 p.m., at the rate of three minutes per speech — minus, of course, time lost to explaining ground rules, walks to the podium, applause and boos, official shushing of the applause and boos, and people who tried to go over their limit.

The anti's seemed to go over their limit quite a bit, which inevitably led the gassers to yell "Time!"

Having to sit and listen quietly to so much absolutely preposterous untruth — some from the excessively hopeful gassers, but by-far-most from everywhere-doom-seeing anti-drillers — was very difficult for me.  (And that was pretty much why I was not able to stick it out for the evening session, sorry to say.)  My only comfort, the whole day long, was the knowledge that soon somebody who shared my sentiments would be yelling "Time!"

Looking back, it occurs to me that that should be the landowners' rallying cry against all further shale gas delay:  "Time!"

This is Hazel Brandt again.  This was the right coat to wear to this event.  As the day progressed, I learned that I could tell which side each speaker would be on, immediately beforehand — based solely on garb, hair, and body type.  Only one speaker threw me — a tall female small-scale farmer in felted wool pants, whom I mistakenly thought for sure was going to be on the "Absolutely Not" side.  There were a surprising number of frack-o-phobic women who appeared to be nursing late-stage eating disorders, their pants on the verge of falling off.  The pro-gas side, on the other hand, both male and female, looked like a bunch of pretty enthusiastic eaters.  (Just FYI:  I'm in no position to throw out the first potato.)

One of the interesting things about this battle — and it's something that the generally under-40 media people simply don't have the life context to appreciate — is the fact that the anti-drilling side has been basically engaging in this sort of dramatic street showmanship, on one issue or another, their entire post-adolescent lives.  It's old hat to them.  (Hopefully, in a year or two, it'll be something new.  Possibly they'll be taking on the scenic blight of windmills — or some other, equally quixotic cause.)

The pro-gas side — not so much.

To get even a handful of these kinds of people out of their kitchens, their diners, their Masonic Lodges, or their volunteer firemen's halls — out onto the streets of Binghamton, NY — this issue must carry a lot of unprecedented, personal oomph for them.

And so here they are.

Many of these folks are the authentic old-guard anchors of upstate New York — my upstate New York.  But a surprising number of others are thickly accented NYC metropolitan transplants — with hearts of gold.  Or recent immigrants to the U.S.A. — who have discovered some unexpected obstructions to their personal American dreams.  Behind every face, I believe there is a story of personal transformation.  But these have all been missed by reporters working today — so enamored are they with the latest fully-acted screaming sound-bite from Catskill Mountainkeeper.

Total bullshit.

Total friggin' bullshit.

On at least three occasions, I noticed anti-frackers smoking cigarettes in the street outside Binghamton's Forum Theater.  I had heard about this previously, but I was a little surprised to see it in person.  These guys are still smoking?  I mean, believe me — I'm all for free choice.  And, as an ex-nicotine junkie myself, I maybe hesitate a bit to sling this kind of mud.  But what is wrong with this kid?  If he's truly concerned about health risks, he should simply take a hard look at what he's already habitually sucking down.  Even if he actually worked full-time on a drilling rig, smoking is easily a thousand-times-bigger issue than any health impact his body would ever see from shale gas development.

As you can tell from the banner on my home page, this is my favorite message from the pro-gas side.  In fact, soon after it was put out in bumper sticker form, I wrote a whole post about just this message.  The fellow on the left is Douglas Lee (spelling?), and he later gave a speech inside, demolishing a long list of falsehoods from the anti-frack side, with a voice still nicely accented with his native tongue (which I don't know for sure, and which I didn't get a chance to ask).  The tall blond woman in the middle was the only speaker for which I could not guess her preference beforehand.  I forgot that I had seen her before the hearing started, standing out here with these characters.

I'm pretty sure this is Victor Furman, who was second in line for entry to the DEC's 1-4 p.m. hearing in Binghamton on Nov. 17.  I was there by maybe 9:30 a.m., and so he had to have planted himself sometime beforehand.  Very clever sign.  Later on, there was a speaker inside — a different fellow — who actually felt the need to explain his midday weekday presence with this:  "I'm able to be here today because I don't have a job... Welcome to the Valley of Opportunity."

That's a reference to an old catch-phrase for the Greater Binghamton area — the so-called Triple Cities — back when corporations like Endicott-Johnson, or Singer-Link, or IBM were credited with systematically improving the lives of thousands.  Now, for some reason, corporations have been re-cast as villains (but not, strangely, not-for-profit corporations).

This is Dan Fitzsimmons, leader of the Joint Landowners Coalition of New York, which is what I like to call "the coalition of coalitions" in upstate New York.  Formed in the Fall of 2008 — shortly after New York's temporary shale gas moratorium got started — JLCNY today claims to represent more than 20,000 households, 70,000 people, and 800,000 acres, mostly in the Southern Tier.

Given the popularity of the drilling issue within upstate media, you would think Fitzsimmons would already be findable, pictured many times on Google Images — and also be findable, quoted hundreds of times, on Google News.  Instead, I assert that JLCNY and Fitzsimmons and many others on the pro-gas side have been routinely ignored by upstate media — especially those outlets originating as daily newspapers. 

This is simply because the current generation of journalists is too committed to a reflexive (but essentially untruthful) enviro's-versus-industry narrative.  Tell me, where do the pro-drilling landowners fit in this narrative?  Where do the job-hungry labor unions fit?  Or the pro-drilling chambers of commerce?  The story that's customarily told — over and over again — is not the whole truth, and it's not the whole story.  And my frustration level on this point is beyond bursting.

I know Fitzsimmons has been called for a quote once or twice before, but I believe this is the first web-posted photo of him.  Three years later — this is the first.  To me, that is amazing. 

I think I'm now officially starting to lose track of the number of web sites that have been created, over the last two years or so, with the specific calibration of taking the pro-shale gas side — in a seemingly authentic, grassroots way.  In my recollection, Shale Country was one of the earlier entrants — leading with some fairly artfully done slide-shows-with-voiceovers.  But there wasn't much updating or follow-through — which is certain death for any web site.  I don't know enough about the genealogy of the oil and gas policy family to be able to explain all the subtle shadings and differences, presumably traceable to all the various funding sources.  All I know is, with regard to this Marcellus Shale and Utica Shale fight, everything in NY and PA has been too little and too late from the pro-drilling side. 

All hindsight, and no foresight, in other words. 

Running forward, we shall see.

Industry's Bad Bet on NYS from 2006: Leases on State Forests Expire Today

Here is a little-known, and little-appreciated fact:  Today — Nov. 15, 2011 — five-year leases on 19,227 acres of New York State-owned forestland, bid out to the natural gas industry in 2006, expire according to the terms on their face.

I know it does seem hard to fathom that the Vampire State ever, in recent memory, wielded enough decisive, clear-headed authority to actually engage in bonafide business-like transactions with the oil and gas industry.

But it is true.  I mean — it was true, five years ago today.

These are the 19,227 acres of state forest land New York State leased to the natural gas industry for five years, starting 11/15/2006 — about half of which did, in fact, allow for surface drilling operations:  Broome/Tioga 1 = Tracy Creek; Cortland 1 = Hewitt; Cortland 3 = Kennedy; Cortland 9 and 10 = Tuller Hill; Tioga 1 = Fairfield; Tioga 2 = Oakley Corners; Tioga 3 = Robinson Hollow; Tioga 4 = Anderson Hill; Tioga 6 = Ketchumville; Tioga 7 = Jenksville; Tompkins 4 = Potato Hill; Chemung 1C = Catlin; Chemung 2 = Maple Hill; Schuyler 4 = Coon Hollow; Steuben 5A = West HIll.

Adding up signing bonuses and delay rentals spread over the full primary terms of these leases, New York State was paid nearly $9.5 million by the winning bidders, Chesapeake Energy out of Oklahoma, and Fortuna, now known as Talisman, out of Canada.  The public lands ran in an arc across the southern end of the Finger Lakes region, ranging from West Hill State Forest near Painted Post in Steuben County on the southwest, to Hewitt State Forest in Cortland County's Town of Scott on the northeast. 

These and prior mineral transactions are still explained online in bureaucratese by the NYS DEC on its web pages here. 

Also, I've gone over all this in detail twice before:  First, while countering completely wild, activist perceptions from October 2010 that future leasing of state land for oil and gas purposes would somehow represent some sort of unprecedented or catastrophic threat to public land.  And, second, while raising questions of both wisdom and fairness, following the Cuomo Administration's terribly short-sighted decision in July 2011 (as part of the tortured fracking-related SGEIS process), to lay down a blanket ban against any future surface use of these state lands for shale gas development.

The Nov. 15, 2006 deals were inked approximately 14 months before the possibilities of shale gas became widely known in Appalachia.  Since that time, however, much hard-bitten and cynical hindsight, coming from observers outside the industry, has created the revisionist mythology that sharp-dealing oil and gas executives always secretly know what their plans are for years beforehand — and that their 2000-2007 leasing behavior in NY, PA, OH, and WV was specifically calibrated by a desire to screw unknowing landowners out of their shale gas.

At the time of bidding, Summer 2006, I was into my seventh year of running title for this industry — mostly, believe it or not, on projects situated inside the boundaries of New York State!   I can tell you from first-hand experience that the E&P decision-makers very often do not, in fact, know what their plan is — certainly not with any reliable certainty, much more than a year or so ahead of time.  (I mean, they may have a plan in advance, but it hardly ever works out as planned.)  Furthermore, I can tell you from first-hand experience that both CHK and TLM operations in New York State were in 2006 still single-mindedly motivated by the prospect of seismically discovering — and proving by horizontal drilling, without the need for any hydraulic fracturing — natural gas tucked away in discrete pockets of dolomitized Trenton-Black River limestone.  Back then, that was "the play."  Sandstone would have been a Plan B effort.  And shale gas would have been a futuristic theory. 

Since that time — in the Northeast, and in New York in particular — the natural gas game has totally changed. 

Some of that change was economic — though driven by a sweeping technological revolution:  It turns out that producing natural gas through the extra effort of hydraulically fracturing shalebeds within parallel, rectangular sections was a much surer thing — compared to the crapshoot of trying to hit an unverified sweet spot within limestone or sandstone.

The rest of that change was regulatory — though driven by a sweeping political firestorm:  New York State installed a supposedly temporary shale gas moratorium, quietly since at least Feb. 15, 2008, and by public pronouncement since July 23, 2008 — which turned out to be a very unfortunate regulatory hesitation, clearing the stage for activists to ruin the rest of the show with uninformed babble.

You add those two landslide changes together, and — in the five years since all that money changed hands in New York, starting on Nov. 15, 2006 — there hasn't been any drilling on or near any of this leased state land.  And, needless to say, no production, and no royalty — which would have been beneficial, in one way or another, to state taxpayers.

None!  Can you believe that?  Who can run a business this way?  Buy something for $9.5 million, and then never even get a crack at earning any payback?  (And, of course, this $9.5 million was just a small portion of what they were then spending statewide, largely on deals with private landowners.)

The bottom line is that all the best-laid plans of CHK, and TLM (and Anschutz Exploration, and Norse Energy) have fallen by the wayside hereabouts — simply because New York State turned out to be a Very Bad Bet.  Sure, I mean — business is business, and shit does happen.  But this is no way to govern a state economy.

I mean, really, let's ask a fair question here:  Tell me again who got screwed on these deals from 2006?

I saw the whole collapse happen personally.  I still remember the day the cell phones buzzed, and they moth-balled the last job I had a piece of in CNY.  Immediately thereafter, and for nearly the last three years, me and nearly all my New York-based colleagues have been forced to shift the horizons of our employment to either other fields entirely, or to shale gas projects out of state.  It's true that some of us are still paying income taxes as New York State residents, but the land work involved has been virtually all out-of-state acreage, with mostly out-of-state economic impact.

You ask me, I say the whole thing has been just one Big Blown Opportunity for New York.

Regarding these as-it-turns-out-useless state lands leases, Chesapeake has been already reported — through beyond-the-norm journalistic effort by Jon Campbell of the Gannett organization — to have had its lawyer write to the NYS DEC, asserting a claim to indefinite extensions under the customary "force majeure" clause.  CHK's argument is, through no fault of its own, it has been stymied from proceeding as contracted under the leases by a superior force — specifically the disruptive regulatory power of New York State itself, which is still ongoing.

The counter argument, of course, is that these companies were still completely free to look for natural gas within the conventional prospects of drilling to limestone or sandstone, which is the main thing they contemplated at the time of leasing, but something they simply chose not to do afterwards.  This is, of course, a good point in the theoretical world, but a pointless point in the real world of actual business — especially the fast-shifting oil and gas business.

No word yet on whether Talisman has similarly put its lawyers to work, sometime prior to today's lease expiration, laying down a claim against NYS for extensions on their share of these state lands deals.  (Or demanding a refund.)

And no word yet on whether either gas company plans to sue — partly on the additional grounds that New York State used its regulatory power to unfairly and unilaterally change the terms of its own deals, and partly on the question of whether drilling for shale gas shouldn't be "grandfathered in" on previously leased state forests, some of which remain "held by production" from drilling activity undertaken based on rights from even older deals.