Appalachian Basin

Marcellus Shale A Real Life “Sim City” Winner

Have you ever played one of the Sim City games? In them, the mayor (you) must struggle to find the balance between keeping citizens happy by keeping taxes low, while still being able to provide for all of the needs for the community. If public funding goes too low or taxes get too high, it makes for very unhappy citizens. Wouldn’t it be great, and much less frustrating, if you could find a magic button to allow for an income that would provide a surplus budget without having to tax your community or get state and federal funding? Wouldn’t it be even better if there was a real life method to have this same thing occur?!

Well Sim City fans, you will have to wait for the games to catch up with the real world because one town in New York has moved out of the realm of imagination and into a league of entrepreneurial genius. The moratorium on high-volume completion activity in New York  means that some of the best and potentially most productive reserves of Marcellus gas remain off-limits. For most communities that has meant waiting on government decisions that must be made to allow natural gas development to go forward…but not in Painted Post. The development of the Marcellus to the south in Pennsylvania requires water, something this village has a lot of, and they don’t need the moratorium to be lifted to start cashing in.

File from The Leader, Corning, NY

According to an article in The Leader, published April 28, Painted Post is already using the railway system to transport 500,000 gallons of water out of the city each day. The Myles Group, which owns the Wellsboro and Corning Railroad, wants to build a a rail siding, water storage tank and equipment to fill up tank cars, and increase the amount of water to 1 million gallons a day. See the full article.

“We do have adequate capacity for these withdrawals,” said Larry Smith, superintendent of the village’s Department of Public Works, in the above mentioned article. “I’ve found documentation that we used to produce well over a million or a million-and-a-half gallons a day in our heyday. So we’re capable of making a lot of water. Water usage has gone down, and we’ve been very aggressive in fixing leaks. So that’s given us the potential to look at this.”

The new facility will lease 54 acres of the former Ingersoll-Rand foundry, which closed in 1985 and dropped the village water usage down significantly. This could provide a village, who’s entire yearly budget is only $1.7 million, with profits up to $2.6 million annually! With an economic incentive like this, it’s no wonder other towns in the area are considering getting on board. For example, Painted Post’s neighbor, Corning is considering setting up its own water depot next to a railroad as well.

The Wellsboro and Corning Railroad

According to a May 10 article in The Leader, the taxes in Corning could go up as much as 8 percent this year! While state law dictates that the revenue would have to go to the water company and couldn’t be used for things like road projects,  it would still enable the city to keep the lid on taxes and costs of services. See the full article for more details.

At a time when municipal budgets are everywhere tapped out, the Marvelous Marcellus could provide a cost effective solution for the state. Cheers to the people of New York for finding innovative means of becoming actively involved in the Marcellus Shale play and increasing their own revenues, despite the moratorium!

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