Louis W. Allstadt
Development of the Marcellus
Shale could provide
enormous quantities of cleanburning
natural gas with great
economic benefits to
New York state. It
should be possible
to drill for gas while
safeguarding our land,
water and air, and minimizing
risk to individuals. Unfortunately,
the state is heading
down a path that will neither
maximize the benefits nor
minimize the risks associated
with natural gas drilling.
On the benefits side, New
York is one of only three states
that do not have a severance
tax on gas as it is produced at
the well. New York needs this
revenue to support a serious
regulatory body for overseeing
the drilling and production of
gas, as well as to fund repairs
to roads that will deteriorate
quickly due to tremendous
heavy truck traffic.
Some of the funds
could also be channeled
to educational
programs to help New Yorkers
participate in the higher
paying technical gas jobs that
would otherwise go to others.
Remaining funds can go
toward funding the general
budget or reducing personal
income taxes.
On the regulatory side,
the proposals by the state’s
Department of Environmental
Conservation (DEC) are
woefully inadequate. Meeting
the softball requirements
of the present draft
Supplemental Generic Environmental
Impact Statement
(SGEIS) would allow drillers
to proceed, no further
questions asked. This draft
SGEIS should be scrapped.
It should be rewritten, adapting
the best science and the
best regulatory practices of
states with greater experience
into regulations that
will protect our citizens and
our environment. There is
no reason for New Yorkers to
be less protected than residents
of other states.
Of paramount concern
in the current draft are the
proposed setback distances,
which would allow drilling
just 300 feet from New
York City reservoirs, a mere
150 feet from the rest of the
state’s municipal water
supplies, and at any distance
from individual water
wells.
These setbacks are just
plain dangerous, and the
draft GEIS does not allow
for further review. The
current draft also fails
to consider topography,
which would lead to even
greater setbacks for wells
where the surface slopes
downward to water supplies.
Drilling each well
will require roughly 1000
trips by heavy trucks, and
as many as ten wells could
be drilled at each site.
Some trucks will carry
pipe and drilling equipment,
but most will carry
water and toxic chemicals
(enough to fill several
Olympic swimming pools)
to and from the site. Just
one accident a few feet
from our municipal water
supplies could contaminate
the drinking water of
thousands or millions.
The recent announcement
by one of the large
drillers that it will not
drill in the New York City
reservoir watershed is
commendable. It shows
that responsible drillers
think this is a bad idea.
The DEC needs to protect
all of the state’s municipal
water supplies from those
drillers who may not be as
far sighted. The setbacks
in the draft SGEIS have
to be much larger, with a
full SEQRA review for review
for any company that
wants to drill closer. The
DEC’s draft SGEIS has
many serious problems,
but this issue is critical.
We simply cannot allow
the proposed setbacks
from drinking water
sources to stand.
We also need setbacks
from cities, villages,
schools and hospitals; setbacks
from parks, recreational
areas and historic
districts and setbacks
from homes, water wells,
farm buildings and livestock
areas.
The Marcellus Shale
underlies such a large
area that it would take
decades to drill it all.
There is no reason that
we could not start with
ultra safe setbacks from
all of these areas and
subject anything closer to
full SEQRA review. The
whole setback issue could
be revisited later when
we have real documented
data upon which to base
the setback distances.
Furthermore county and
local authorities should
have a role.
Of equal concern is the
lack of capacity to process
the millions of gallons
of flow-back fluids from
each well. These are the
fluids that are pumped
out of the well after the
shale has been fractured.
They include brine, toxic
chemicals, hydrocarbons
and radioactive material
mixed with very large
quantities of water. The
DEC would allow these
to be stored in open surface
ponds before they
are trucked out to be reprocessed.
However, New
York has no plants that
can process any significant
quantity of this material.
Other states with
similar shale oil are hard
pressed to handle their
own flow-back fluids.
The DEC needs to assure
that plants exist and are
licensed to clean up this
material safely. The DEC
also needs to control the
pace of drilling so that no
wells are drilled unless
the flow-back fluids can
be transported for reprocessing
within a very short
specified period of time.
No well should be allowed
to be hydrofracked until
that driller has obtained
a contractually binding
time slot shortly after
the hydrofracking at a licensed
processing plant.
The DEC has proposed no
such mechanism. Without
this we could end up with
thousands of ponds full of
toxic fluids and the prospect
of environmental
disaster when the heavy
rains come.
Another area of great
concern is the impact of
huge numbers of heavy
trucks on our roads and
communities. State,
county and local highway
officials need full
authority to route this
traffic around critical areas,
in order to minimize
the impact on population
centers, critical environmental
areas and any
other sensitive location.
We also need a system in
which state, county and
local road authorities issue
fee based permits to
these trucks. The extra
cost of road maintenance
must be covered by severance
taxes and/or by direct
fees on trucks. New
Yorkers should not pay
their taxes to give drillers
a free ride on our roads.
We also need laws that
lay responsibility squarely
on the driller for cleanup
during drilling and production,
as well as for final
cleanup when a well
is abandoned. This protection
needs to extend
through any corporate
structure to the real owners
of the drilling operations.
It is not unusual for a
driller to establish an individual
corporation for each
well, then to keep little or
no money in that shell
corporation’s account. Nor
should drillers be allowed
to pass responsibility to
land owners from whom
they lease mineral rights.
Requiring drillers to establish
a bond for the cleanup
of each well would provide
an incentive to do the job
right.
The U.S. has thousands
of drilling companies.
Many of these companies
are experienced, competent,
responsible and
have shown in other states
that they can work within
strict regulatory systems.
However, some lack the
competence and expertise
for this highly technical
type of drilling, and
a small minority will attempt
to cut any corner. A
fair severance tax, escrow
for cleanup, and effective
regulations that protect
all New Yorkers will not
scare off competent, responsible
drillers. Their
record in other states has
already proven that they
can follow the rules and
still make a nice profit.
———
Louis W. Allstadt is a
resident of Middlefield.
He was an executive vice
president of Mobil Oil Corporation
and an operating
officer for exploration and
producing in the U.S., Canada
and Latin America.
