DOWNEY: No Natural Gas Upstate? Politics Is The Reason

LETTER from DICK DOWNEY

No Natural Gas Upstate?

Politics Is The Reason

To the Editor:

Tom Morgan’s column, “Frack Bust? Or frack Boom?” (10/10/19) cited multiple studies showing the safety and economic benefits of the shale revolution. Naturally, it drew the usual flurry of nay-sayers.

Jay Fleisher, Ph.D., worried about shallow Marcellus formations in the Catskills and Northeast Pennsylvania. As a geologist, he should know most Catskill shale is “cooked” and therefore out of play. The well depths of Northeast Pennsylvania’s Susquehanna and Bradford counties average about 7,000 feet. They’re doing just fine.

Chip Northrup’s letter credits his “Ain’t No Gas Here, Guv!” tour in the late fall of 2014 as influential in Cuomo’s decision to ban gas in New York. Maybe … but probably not. More likely was Zephyr Teachout’s 37 percent showing in the Democrat primary, the consideration that Upstate New York was not his constituency, and Cuomo’s need to move left to satisfy his NYC base. However, the anti-gas tour’s theme –  New York gas has little value so why drill? – deserves scrutiny.

Tour member Jerry Acton forecast gas productivity in New York using depth and thickness of formation data coupled with initial production numbers from 1,700 Marcellus wells along the PA/NY border.

From this, he deduced New York’s Broome and Chenango counties would be productive but little gas of value elsewhere. Unfortunately, Mr. Acton had to use limited NYS data.

More important, there was very little data on production from Pennsylvania’s Utica shale because there was virtually no drilling in that formation prior to 2014. (See EIA Monthly Dry Shale Gas Production, Oct.17, 2019.)

The Utica, a deep shale formation, now accounts for about a quarter of the Appalachian Region’s output. It was the primary formation targeted by drillers in Otsego /County. So, while Mr. Acton’s data confirms Marcellus productivity in Broome and Chenango counties, it is silent on the true total potential of gas in New York.

Tour member Lou Allstadt used the industry’s flight from New York as an indicator that the state’s gas drilling was deemed unprofitable. Unprofitable? Yes, but not from a lack of natural gas.

Politics killed gas development in New York. Rex Tillison, then Mobil Exxon’s CEO, requested a meeting with Governor Cuomo to discuss moratorium issues. Cuomo refused. Weeks later Exxon Mobil cancelled all its New York leases.

A good move for Exxon Mobil. It had nothing to do with gas in the ground; New York was NOT “open for business.”

Likewise the small operators. Some went to court; some stuck it out until their bank accounts ran dry. Mr. Allstadt characterized the completion of Gastem’s Ross #1 on Crumhorn Mountain in the Town of Maryland as unprofitable. That’s why they left , he said.

Wrong. In their conversations, discussions with landowner lawyers, annual reports and targeted sites, Gastem (and Lenape O&G) intentions were crystal clear; they wanted local gas for local use. Gastem’s limited vertical frack at Ross #1 proved there was a local supply to meet the company’s goal. Politics killed opportunity. That’s why they left.

Mr. Northrup’s role in the tour was to turn a rogue’s eye view on the financial machinations of the big oil and gas companies. This didn’t have much to do with the lack of gas in New York, but Mr. Northrup has a long history of low-balling natural gas reserves, particularly in the Marcellus. Should we heed his “expert” advice?

In November 2014, the gas output of the Appalachian Region (Pennsylvania, Ohio, West Virginia and MIA New York) was 14 billion cubic feet per day (Bcfd). As of the Energy Information Agency’s Oct. 17 graphs, it has now more than doubled. This gain happened in spite of a politically limited pipeline capacity, the denial of normal markets on the East Coast and New England, and an oversupply of discounted natural gas now piped to the South and the Southeast.

The “Ain’t No Gas Here, Guv!” tour had little to do with convincing Cuomo to ban gas and little to do with reality. The reality is that Upstate New York without natural gas is left swinging in the wind of expensive renewables.

NYSEG rate case, anyone? Just the first of many rate hikes.

DICK DOWNEY

Otego


2 thoughts on “DOWNEY: No Natural Gas Upstate? Politics Is The Reason

  1. Chip Northrup

    There were many test wells drilled in New York state and they did not show to be productive in either the Marcellus or Utica. Exxon Mobil never had more than a few well permits near the border, and those permits simply lapsed. Jerry Acton’s methodology – which showed a sharp decline in productivity towards the north and to the east – was later copied by Penn State. Almost all of the activity in New York was by penny stock companies – like Norse – and mineral lease speculators. There is more hot air in New York than gas.

  2. byngh1

    Good to see Downey’s intelligent, fact based analysis of how NY natural gas development has been stymied by several local politicos, mascarading as environmental and gas industry experts.

    Particularly relevant and correct is the negative report card on the “tour” participants, and their obsession with NIMBY. Research into both the naysay leaders’ actual experience and backgrounds clearly shows they are not the “hands on” kind of experts in the field of natural gas development that they claim to be in various public forums.

    This drama ought to be replayed by a commission of real energy experts who understand how to rescue NY from its downward economic spiral. Just go out and take a close look at Otsego Appalacia and all its poverty, that can not be reversed unless we begin producing more goods and services, which takes inexpensive energy sources. Renewable is not the focus that could turn this downward trend.
    By: Concerned Otsego County Son

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