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Wednesday, July 13, 2011

NY Takes a Step Forward on Energy, Jobs

Early this month, New York took a step towards opening the state up to natural gas development in the Marcellus Shale region.

As widely reported, the state's Department of Environmental Conservation (DEC) has found that the process - known as fracking - by which natural gas is extracted from shale rock can be done safely. This would seem to point the state in the direction of ending its current moratorium on fracking.

A Wall Street Journal report called the DEC report "a victory for natural-gas producers." The Journal also quoted Chris Tucker, spokesman for Energy In Depth, declaring, "It's a good step toward finally being able to produce in that state."

Newsday quoted Brad Gill, executive director of the Independent Oil and Gas Association of New York, saying, "Allowing natural gas development to expand in New York will bolster the state's economy, provide thousands of new jobs in the near term and move our nation to greater energy independence."

But there would be limitations under the DEC recommendations. The Rochester Democrat and Chronicle noted that "a ban of high-volume fracking within 4,000 feet of the Syracuse and New York City watersheds, on any primary aquifers and on any state-owned land" was recommended. The paper added: "If the department's requests become final, about 20 percent of the state's portion of the Marcellus Shale - which stretches across the Southern Tier - would be off limits to natural-gas drillers."

It is clear that fracking does not present any real risk to drinking water. After all, as the Journal noted, "The industry contends that fracking has been used safely in oil and gas production for decades, and that drinking-water supplies are protected from drilling fluids by more than a mile of impermeable rock between shale formations and aquifers."

For good measure, as Investor's Business Daily pointed out in a recent editorial: "A 2010 Pennsylvania Department of Environmental Protection report concluded that no groundwater pollution or disruption of underground sources of drinking water has been attributed to hydraulic fracturing of deep gas formations. Even Environmental Protection Agency director Lisa Jackson recently told a House Oversight Committee hearing that, despite some anecdotal evidence, ‘I'm not aware of any proven case where the fracking process itself has affected water.'"

The hype on fracking has been generated by environmental activists who are opposed to any kind of production and use of carbon-based energy. If the Democrat and Chronicle report is correct, and the DEC's recommendations could open up 80 percent of New York's share of the Marcellus Shale to natural gas production, that would be notable, given the stranglehold that such environmentalists have on the state's political machine.

But given that political reality, it would be wise not to jump too far ahead on what might happen in New York. There is a public comment period, and then Governor Cuomo would present his decision. The state legislature could still weigh in, and the state attorney general also is sticking his nose into the issue.

New York has taken an important step forward, but we are not yet at the point where we could celebrate a victory for sane energy policies in the Empire State. But there is now hope.


Raymond J. Keating is chief economist for the Small Business & Entrepreneurship Council

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