Landowners Left Out of the New York Natural Gas Equation
Over the weekend, several articles cited projections from scientists that New York’s Marcellus reserves are not as vast as those in Pennsylvania and West Virginia. As the Associated Press put it, “New York’s recent decision to ban fracking is hardly seen as a big loss for the nation’s production of natural gas.” What the AP and many other outlets missed is that the ban on fracking is, in fact, a pretty big loss for New Yorkers, especially the landowners of the Southern Tier.
For one thing, it has led to a tremendous loss of revenue. Representatives from Baker Hostetler, LLP wrote a guest post for EID last week, which explained the enormous economic growth that would have occurred in the Southern Tier if fracking were allowed, even using more conservative figures. They said,
“The US Energy information Administration conservatively estimates that 144Bcf of technically recoverable reserves of natural gas exist in New York State. Even if only 10 percent of the technically recoverable gas were produced over the next 15 years, and even if the price at the wellhead is only $4/MMbtu, that would still represent a staggering $57 billion in gross value. Of that, even if the farmers’ and rural landowners share averaged only one-eighth, that’s still more than $7 billion in lost revenue pulled directly from the pockets of farmers and rural landowners in New York’s southern tier. The lost tax revenue from extraction taxes at the County and School tax level and income tax at the State level are equally significant lost revenues.” (emphasis added)
The Joint Landowners Coalition of New York (JLCNY) is aware of this lost revenue and is currently awaiting the release of new regulations from the Department of Environmental Conservation (DEC) to determine if the ban can be fought in the New York court system.
The Southern Tier has some of the highest unemployment rates in the state, with places like Binghamton continuously higher than the state average. According to the Bureau of Labor Statistics, the city’s unemployment rate was six percent in November 2014.
Local unions came out to the January 5th rally in Binghamton and described the situation their members are facing, which can be seen in the following video:
“Of the 400 plus working members of local 112, we currently have 37 working out of town in motels at their own expense. They are away from their families in order to make ends meet, but they are the lucky ones. We also have 89 members who are currently not working at all. Some have totally exhausted their unemployment benefits, some have lost their health insurance, some are having trouble paying their bills and are in danger of losing their homes. We need these jobs.” (0:34; emphasis added)
The point is that even if the amount of Marcellus gas recoverable in New York isn’t as large as it is in other states, it still would have enticed some companies, which would have strengthened New York’s economy and created jobs. Instead, New York landowners have had this and other potential economic opportunities dangled in front of them only to be ripped away with no realistic solutions offered in return.