With all the restrictions in proposed state regulations and local bans, gas companies say about half of their lease holdings in the lucrative Marcellus Shale region in New York state will be off-limits or inaccessible to drilling if the state gives the green light to developers this year.
A coalition of environmental groups is pushing for a complete ban on shale gas drilling, but the industry and landowners hoping to lease to drillers are working to lift some of the restrictions and halt the movement toward local bans.
“Industry estimates that when you look at the cumulative effect of prohibitions and setbacks, 40 to 60 percent of their leasehold is effectively undevelopable,” said Tom West, an Albany lawyer representing gas companies.
The Marcellus is a gas-rich shale deposit thousands of feet underground in parts of Pennsylvania, New York, Ohio and West Virginia. It’s estimated to contain 84 trillion cubic feet of recoverable natural gas, enough to supply the nation’s gas-burning electrical plants for 11 years.
The formation produced just over 1 trillion cubic feet of gas in Pennsylvania last year, providing $3.5 billion in gross revenues for drillers and more than $400 million in landowner royalties, according to an analysis by The Associated Press.
Industry insiders and environmental groups say it’s impossible to quantify how much gas would be off-limits to production under the various bans and restrictions in New York because the amount of gas that can economically be extracted won’t be known until wells are drilled.
Drilling hasn’t been allowed since 2008, when the state began an environmental review of high-volume hydraulic fracturing, or fracking, which frees gas from shale by injecting a well with millions of gallons of water mixed with chemicals and sand. After drillers poured into Pennsylvania in 2008, environmental problems including methane-contaminated private water wells, salt in rivers from wastewater dumping and spill-polluted streams prompted regulatory reforms in that state and touched off a vocal opposition movement in New York.
For a state that’s broke, they’re sure leaving a lot of money on the table. But then again, that’s consistent with teh anti-human movement they’re now beholden to.