New York State has had a struggling economy now for quite some time, especially in Upstate where farmers are struggling to hold onto their land and businesses have been closing their doors for years.  Governor Andrew Cuomo has realized New York needs more help than ever and is now trying to reach out to private sector businesses and encourage people to support New York businesses. Today the state launched a brand new marketing campaign, including a website in hope of helping the “new” New York.  This is a great step in the right direction at a time when real solutions are needed, and natural gas could provide the light at the end of the tunnel New Yorkers and Governor Cuomo would be crazy to ignore.

“Creating jobs and welcoming business are both critical to our future.  New York State is open for business.” Governor Andrew Cuomo

So, what is this “new” New York? This video, complete with voice over by Robert DeNiro, describes it. Here’s the transcript too.

The website, as can be seen in the screenshot below, provides some great information for starting or continuing a business in New York. It’s got tips on everything from training employees to tax incentives to regional help. It even has information on finding a location and exporting goods internationally–everything you would want to know as a business owner or prospective one.

The “New” New York Literally Supports Business Development But What About Industries That Don’t Need Help from the State?

The campaign is currently running a series of commercials to help spread their message.  All of these commercials share a common theme.

The common theme, which is easily noticed below, is that all of the projects were directly supported by the state:

That is until New York stepped in, and put together a package of $40 million worth of job and investment-related tax credits, to help them stay and relocate to a new facility in nearby Endicott, New York. (BAE Systems)

To support this growth, New York State gave FAGE, a Greek company, incentives worth over $1.5 million. (FAGE)

To show its commitment, New York State agreed to invest $400 million into the College for Nanoscale and Science Engineering at SUNY-Albany. (Nanotechnology)

The State has created a package for Smith Electric Vehicles worth nearly $3.4 million that will help the company build its new factory, as well as create nearly 100 jobs in one of the neighborhoods that needs it most. (Smith Electric Vehicles)

A state offering money and incentives packages to ensure businesses can stay or get started is not necessarily a bad thing.  New York needs to be open for all business, and sometimes businesses need help along the way to make it.

The fact of the matter is that our state needs jobs and economic growth, however we can get it, and I’m grateful for the work the Governor’s doing to help get us out of this economic slump.

That said, I have to ask, are we really “open for business” if our doors are still closed to the one business that would gladly come to New York without any of these incentives?  It goes without saying that I am talking about the natural gas industry.

Yes, that’s right at a moment we are saying we are “open for business” we simply aren’t.  We are delaying regulations for activity that has been proven safe in over 1.2 million applications spanning six decades because a group of individuals is bent on spreading mis-information and  scare tactics to shape public opinion.  So it makes sense that we look at what we are missing out on.

Our Neighbors to the South Are Getting It Done with Non-Subsidized Natural Gas

What has happened in Pennsylvania in the past from natural gas development?  The Marcellus Shale Coalition outlines those benefits succinctly in a one-page document they have produced.  A highlight:

But while there are no easy answers or quick fixes in reversing an economic slide as rapid and severe as the one confronting our nation now, at least in Pennsylvania, we’ve got options.  Among the most exciting?  The safe and steady development of clean-burning natural gas resources from the Marcellus Shale responsible for creating more than 44,000 jobs, generating $4.5 billion in economic value, and sending more than $1.4 billion back in royalties to the state’s landowners.

Another fun fact from Pennsylvania:

For every $1 invested in the state by Marcellus producers, $1.90 in total economic output is generated.

Natural gas can help every type of business in a local economy. If New York welcomes the natural gas business in,  it will in turn provide opportunities for more businesses indirectly.  The Marcellus on Main Street website is a perfect example of how every business in the region is being impacted by the development around it.  Check it out when you get a chance and you can see companies from day cares to gas stations to car dealerships experiencing growth from the increased economic development.

What about New York?

While we understand the benefits that have been accrued in Pennsylvania its important to understand what could be realized in New York.  Luckily, the SGEIS and a study from the Manhattan Institute provide a pretty clear picture of the benefits that could be forthcoming with approval.

Directional drilling and hydraulic fracturing have unlocked vast new reserves of natural gas in the United States. Development of these resources is now well under way in Pennsylvania and West Virginia. Unlike their neighbors to the south, however, New York residents are not directly benefiting from natural gas development as the result of a governmentimposed moratorium, itself a response to environmental concerns surrounding hydraulic fracturing. This study analyzes the economic and environmental impacts of shale gas drilling in New York and finds the net economic benefits to be significantly positive. Specifically:

• An end to the moratorium would spur over $11.4 billion in economic output.
• Some 15,000 to 18,000 jobs could be created in the Southern Tier and Western New York, regions which lost a combined 48,000 payroll jobs between 2000 and 2010.*
• Another 75,000 to 90,000 jobs could be created if the area of exploration and drilling were expanded to include the Utica shale and southeastern New York, including the New York City watershed. (This assumes a regulatory regime that protects the water supply but permits natural gas development to continue.)
• Localities and the state stand to reap $1.4 billion in tax revenues if the moratorium is allowed to expire.

Are Marcellus Shale jobs long-term?  How do natural gas jobs compare to other energy jobs?  We can find this in the same Manhattan Institute study.

The continuity of drilling effort and the economic activity that it generates set shale resource development apart from other energy development activities.  Developing coal mines, wind turbines, hydroelectric resources, and solar energy involves significant job creation during construction. Once the facilities are in place, however, their operation requires relatively few workers.  In contrast, the labor-intensive aspects of shale gas development accelerate over time and can persist for decades, if the reserves in place are large enough.

Broome County Demonstrates Just What “New” New York Could Be with Natural Gas – No Incentive Programs Required

Let’s take a look at the study found here and quoted below.

Though gas wells can produce for 20 to 30 years, the bulk of their output occurs in the first ten years. In Table 4, using the wellhead price projections from the Energy Information Agency and the yield curve from Figure 2 (plus 10 percent), we calculate the total revenue for a hypothetical gas well in Broome County. Assuming well completion in 2009 and production commencing in 2010, we estimate gross revenues at about $9.3 million per well during the first ten years of production. The net present value of this revenue stream, using a discount rate of 3.2 percent, would be about $8.3 million.   As discussed above, Broome County can probably support 4,000 gas wells. If, theoretically, they were all completed this year and began producing in 2010, the total revenue stream over ten years would be about $37.2 billion. But, since well development will obviously be a staged process, the revenue impact is perhaps better expressed as $3.72 billion per year.  These revenues will generate significant new income and employment benefits for businesses and residents of Broome County (see discussion below). (emphasis added)

While the numbers dealing with one county look great, the SGEIS took a look at benefits that could be accrued to counties across the Southern Tier.  From the SGEIS:

Broome, Chemung and Tioga Counties would experience annual increases in employee earnings of approximately $254 million to $1.0 billion, or 4.7% to 18.7% of the 2009 total wages and salaries for the region. (page 6-229)

Of course, there’s potential opportunities for every county that hosts natural gas development because of New York State’s Ad Valorem Tax.  Check out the presentation below to see how much revenue one natural gas well can produce in taxes alone.

It’s Been an Uphill Battle Thanks to the Anti-Energy, Anti-Growth, Anti-Opportunity, Anti-Everything Agenda of a Few

The anti-natural gas crowd goes against everything Governor Cuomo has stated New York needs. In fact, the activists were proud when they felt they had shut down Schlumberger for the day. They were happy thinking they cost the company millions of dollars in profits, prevented hardworking Americans from doing their job, and impacted one of the largest taxpayers in the county.  They also tried shutting down two other large employers and taxpayers, Inergy  and Talisman.  Not only do these protestors like inhibiting economic activity, but it seems they wont even cut their neighbors a break.  Who can forget when they protested a local distribution system whose only goal was to provide a low-cost energy source to help residents and businesses save money on heating costs and the costs of conducting business along the Southern Tier.

Meanwhile, the protestors who claim to be peaceful show their true colors every day by spreading misinformation, fear and even threats.  Here’s one from Bill Huston:

Cuomo will not issue one permit.  Unless he wants a civil war.  The Elders have been meeting. We are all preparing.

That seems reasonable, allow natural gas and prepare for civil war, surely there is no hyperbole here.

Don’t Close the Door on Potential Business

If this new plan is going to succeed, all of New York needs to be open to all business, not just the part the natural gas activists, or NIMBY’s, support.

By supporting the entire economy we’ll grow a healthy economy for our state and its next generation of leaders.  We can’t slam the door shut on the private sector potential by allowing “Home Rule” bans and moratoriums to determine development.  Home rule gives towns the ability to say no to business, no to growth, and no to opportunity off the whim.  For example, look at the amount of resources that has been levied in stoking fear and mis-information to shape the opinions of town boards throughout New York. It’s natural gas today; what will it be tomorrow from this crowd? That’s a good question and one likely no one can answer.

Home rule denies individuals their private property rights and impeded economic growth on a regional basis. If one town passes a ban, it can stifle the opportunities for the towns around it as well.  Commerce doesn’t end from town to town.  Why does a town board (5 members) have the ability to stop  folks from developing the minerals they own when the DEC has put together a proposal that will ensure safe and responsible development in New York?

The Department of Environmental Conservation has gone above and beyond with the Supplemental Generic Environmental Impact Statement  and has developed one of the strongest regulatory platforms in the nation.  It’s time to move forward for the people of upstate who are desperate for work, jobs, growth and opportunity.  That’s what the Governor is trying to address and that’s what natural gas would accomplish.  No new incentives or programs are required.  All that’s needed is an approval and a sound regulatory platform.

A website like Governor Andrew Cuomo has developed drives home the point natural gas development can help all the local businesses in New York.  Natural gas will jump start New York’s economy and it will lead to direct and indirect jobs which will be created with private investment alone.  Even the state regulatory program would be paid by natural gas permitting fees.  What’s not to like?

Isn’t this the ultimate goal for New York State?  Don’t we all want to live in a state with a healthy economy? Governor Cuomo says that his goal.  So Governor Cuomo, let’s take the regulations DEC has created, allow permits for natural gas development in all of Upstate’s Marcellus Shale, and let’s really open New York for business.