Will New York become the next boom state that 42 percent of New Yorkers want, or will fear and willful ignorance close the door on potential decades of prosperity?
That's the question Governor Andrew Cuomo and the Department of Environmental Conservation (DEC) are currently weighing.
The State of New York put a moratorium on fracking in 2008 to give regulators time for gathering and studying data on the process, which environmentalists claim pollutes drinking water and causes other environmental hazards. Fracking, or hydraulic fracturing, is a drilling process used to extract oil and gas from shale formations deep below the surface.
New York's potential for fracking good fortune
New York, Pennsylvania, West Virginia and Ohio sit atop oil and gas reserves trapped deep in the Marcellus shale formation. The most productive sections of the Marcellus shale are found in Pennsylvania and New York. Unlike New York, Pennsylvania has been cashing in on its good fortune, allowing oil and gas companies to use fracking. The natural gas industry alone has invested more than $4 billion in Pennsylvania leases, land acquisitions and infrastructure development, creating 13,500 direct and indirect jobs in 2009 and expecting to create as many as 211,000 jobs. Penn State has estimated that the gas industry generates a value-added increase in spending of more than $1 billion in Pennsylvania, and contributed more than $1 billion in state and local taxes.
New York homeowners could enjoy the same embarrassment of riches, receiving $5,000 per acre, plus royalties of 12 percent to 20 percent, by leasing land to gas companies, and the state could reap more than $1 billion in state and local tax revenues from natural gas drilling, according to the Manhattan Institute. It's no wonder that a recent poll by Siena College revealed that about 42 percent of New Yorkers support fracking (36 percent oppose it).
Some fracking facts
Fracking has been fraught with controversy, exacerbated by a seeming dearth of credible data about the health and environmental impacts of the practice. (There are loads of studies, many from highly respected universities, but opponents persist in perpetuating their unsubstantiated claims.) The EPA began a new study in November of 2011 for precisely that reason, having found that other studies conducted to date are inconclusive, incomplete or have come under scrutiny for suspected industry influence.
It's likely that no matter what the new EPA study finds, fracking's detractors will not be satisfied. Undoubtedly, they assume that the oil industry is pursuing profit at the expense of environmental safety, but they're conveniently overlooking the fact that safe and "green" fracking practices, such as better methane capture, adoption of techniques that use less water, and recycling, can actually increase oil company profits.
Too late for the public comment period, but perhaps in time for the DEC's deliberations, a documentary investigating the claims, "FrackNation," will hit cable network AXS Jan. 22. I encourage all concerned and curious about the true facts on fracking to tune in, and then decide for yourselves: should New York count its gas and oil blessings all the way to the bank or let fear and a knee-jerk negative response to "big oil" keep it from greater economic prosperity?
Guest Post by Chris Faulkner, Founder, President and CEO of Breitling Oil and Gas. Advisor to the ECF Asia Shale Committee and member of the Board of Directors for the North Texas Commission.
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