Advisors on Fracking Unsure of Cuomo Administration’s Expectations

Tuesday, July 26, 2011

A panel appointed by the Cuomo Administration earlier this month has been tasked with giving advice on some of the most sensitive issues related to the controversial gas drilling technique known as hydraulic fracturing, or fracking. But weeks after it was created, the group’s role is still unclear to some of its members, and there are questions about balance.

In the months ahead, the group is supposed to advise the state Department of Environmental Conservation on enforcement, fees and taxes and minimizing the community impacts of gas drilling. Meanwhile, the state will solicit feedback on its 1,095-page environmental review of fracking. As soon as 2012, the DEC could begin issuing permits to drill in parts of upstate New York lying above the gas-rich Marcellus Shale formation.

But no meeting has yet been scheduled for the 13-member High Volume Hydraulic Fracturing Advisory Panel, and several members said they were asked to join just hours before the DEC went public with its fracking plans.

"It was suggested to us a couple of days ago, and we formally agreed to participate late yesterday afternoon," wrote panelist Kate Sinding, an attorney with the NRDC, in an email as Commissioner Martens was announcing the panel on July 1.

The same day, Erica Ringewald, a spokesperson for another panelist, Environmental Advocates of New York’s Robert Moore, wrote, "We had about an hour to assess yesterday."

Stan Lundine, a former Lieutenant Governor who is also a panelist, expressed some confusion about the panel's purpose "because I don’t know the answers, where we still haven’t had the first meeting of this panel."

Some panelists had a little more time to consider the offer. Robert Catell of the Advanced Energy Research and Technology Center at SUNY-Stony Brook said he’d been talking with the DEC “for some time” and Mark Boling, a senior vice president at Houston-based Southwestern Energy, said he was asked to join the panel about a week in advance.

Panels and committees are usually praised by their creators for the expertise they bring. But very often what they do is something far more valuable: they provide political cover to make unpopular decisions. On the hotbutton issue of fracking - which has political, environmental, and economic dimensions - this panel could help ease the way to a broadly-accepted compromise on fracking. But if the group founders, key constituencies could instead be alienated from the process.

A Question of Balance

Boling is a choice that rankles some in the natural gas industry: not only is he the only representative of the natural gas industry on the panel, his firm has very little skin in the game.  His firm, Sourthwestern, has only a small number of acres under lease in New York State.

"I'd be remiss if I didn't admit that that bothers me," said Brad Gill, executive director of the Independent Oil & Gas Association of New York, an industry group. "We would like to see greater local input, from operators who know the Marcellus end of the business and know how to drill in New York State."

Boling sees his role as a bridge between energy companies and the environmentalists who often oppose their activities. Since early 2010, Boling has led an effort to develop a new industry code of conduct, in partnership with the Environmental Defense Fund. The idea is to address the concerns over fracking, such as water contamination and air pollution – concerns some gas drillers say are exaggerated: "A lot of companies don’t agree with my views," he said.

The composition of the rest of the panel is raising eyebrows as well. Six of the 13 members are staffers at environmental groups. And people who are on the front lines of the issue have largely been left out: there is no representative of land owners (several property-owner groups have formed since 2007), and no well services company is represented.

Assemblywoman Donna Lupardo, a member of the new panel, represents the gas-rich area around Binghamton and says there could be an advantage to broadening the panel.

“I think it would not hurt for us to have a number of voices at the table,” Lupardo said. “Certainly someone from the oil & gas industry, someone from the landowners should be involved.”

Lupardo, a Democrat with strong environmental cred, said she initially hesitated when she was asked to join a group that will, in effect open the door to fracking in New York. But, Lupardo said, “too much is at stake to not be directly engaged in the process.”

A DEC spokesperson said the agency has received suggestions for additional panelists, and is considering them.

Asked whether he sees his panel as balanced, DEC Commissioner Joe Martens pointed out that one advisor, Robert Catell, is a former chairman of National Grid. He also sits on the board of Keyera, a company that fracks for gas in Alberta. Another panelist, Kate McGinty, a former advisor to President Clinton, sits on the board of NRG, a power plant operator.

Putting a Price on Gas Development

The most contentious issue panelists are likely to deal with is imposing new costs on the gas industry to offset some of the negative social and environmental consequences of fracking.

One option would be to institute a severance tax, which targets a portion of the revenues generated by gas drillers. Boling pointed out that in 2008, Arkansas raised its negligible severance tax to a heftier 1.25 to 5-percent reserving most of the revenue for road repair and construction (moving heavy industrial equipment on small roads can cause serious damage). The tax gave Arkansans a reason to support drilling in the state’s Fayetville Shale, Boling said.

But in Pennsylvania, the issue has become a political flash point. Tom Corbett, now the state’s Republican governor, made opposition to the severance tax a campaign issue when he was running for the governorship in 2010.

And although Boling supported the 2008 severance tax in Arkansas, he’s now opposing a proposed tax hike there, arguing it would make the cost of doing business too high.

One likely measure that may be easier for the gas industry to accept would be a hike in permit fees, which could enable the DEC can hire more staff to process more drilling applications.

But Will The Drillers Come?

Some opponents of fracking fear that as soon as new rules are in place, the gas industry will swarm into New York State. But this is not likely to happen. For one thing, DEC’s Martens has said permits will only be issued as quickly as his agency’s budget will allow.

What’s more, the economics of natural gas are not working in the drillers’ favor. Since the shale gas boom began, natural gas prices have slumped to around $4 per thousand cubic feet. Earlier in the 2000’s the price was as high as $10. Mushrooming supplies and stable demand mean prices will likely stay low for years to come as more shale reserves are tapped all around the country.

Another obstacle is the long wait time drillers face to obtain the heavy equipment used in fracking. Mike Hogan, an independent oil & gas consultant in Western New York, said roughly 3,500 wells sit ready to be fracked in other states, and a driller ordering equipment for a new site today can expect to wait two to three years for delivery.

Hogan said the companies he does business with are “just happy that the process is moving forward,” and will review regulations once they’ve been written.

While many forces are acting to slow the pace of development, one fact may prompt some companies to hurry to put drill bits in the ground: expiring leases. Natalie Cox, a spokesperson for Talisman Energy, notes that the company’s total area of land under lease – currently around 400,000 acres – is constantly declining, as agreements with landowners, often for a term of 5 years, expire. One way to avoid that: start drilling.

Chesapeake Energy, which has 1.76 million acres under lease, recently announced a novel alternative plan to ramp up demand: invest $1 billion in technologies to enable cars to run on natural gas.

Many observers say the first wells to be fracked in New York will likely lie just a few miles from the Pennsylvania state line.

“The infrastructure, the service companies the drilling rigs, all the support services, the workers are in Pennsylvania,” said Brad Gill of New York’s Independent Oil & Gas Association.

But for many panelists, Pennsylvania’s brief experience with fracking, which includes a number of spills and explosions, serves as a cautionary tale.

“Looking at Pennsylvania, you see policy-making occurring backwards,” said Lupardo. “Something goes wrong, and they decide to establish a policy. I think people should feel very good about the way New York has approached this.”


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Comments [18]

David Willinger from Manhattan

I just stumbled on this discussion (today, 12/1) although I remember the broadcast very well. I agree with all the above and demand that this - MY radio station that I support consistently with my money -- respond to these charges of being in the pocket of the gas industry and having given a skewed report.

Dec. 02 2011 02:31 AM
Jess from Chelsea

Ban it, Ban it, Ban it. State-wide. Sad to see that WNYC constantly has on "environmentalists" from outfits like NRDC when they SUPPORT IT!!!

Jul. 30 2011 01:45 PM
Calamity Jane from Western NY

"So, who will pay? The common people: the landowners when their property becomes uninhabitable, uninsurable and unsellable"

This remark is hysterical. So do you coastal dwellers ever travel to other parts of NY state? I grew up in the state and hold a large piece of well located property that hasn't been sellable for at least 20 years. I recently crossed the state and travelled through NY's bread basket to find that every grand old home has been abandoned for easier living in the front yard moblile home.

Get a grip people. NY state needs to be reinvested and repopulated or the property outside of NYC needs to have it's property taxes to reflect reality - that would be zero. NY state is now Apalachian and that too is something that should concern everyone.

Get off your keyboard and get out to see for yourself how your beautiful state has declined. NY State needs this industry plus the reopening of all the factories vacated during the last decade. The natural gas industry needs to be welcomed but supervised.

If you folks want nothing to happen in parts of the state where you do not travel - time for you to pay my taxes.

Jul. 28 2011 10:17 AM
James Barth from Beach Lake, PA, Queens, NY

Perhaps WNYC would prefer a panel that is as "balanced" as Gov. Corbett's, in PA, that included 13 of 30 members directly from the extraction industry, and only 4 of 30 that had members of "environmental" organizations, none of them "hardcore"?

Please, WNYC, learn a little more than you have since the first report by Illya Marritz, in July of 2008! I'm ashamed of your lack of depth.

Jul. 27 2011 08:53 PM
Mil from Brooklyn

I just watch a documentary called "GasLand" directed by Josh Fox. I recommend the Advisoy panel watch it. GasLand shows the effects fracking has caused to the drinking water and health of the people in Colorado and surrounding states.

Jul. 27 2011 08:37 PM
Tom from NJ

WNYC's reporting on this subject does indeed feel compromised to anyone who knows the subject well.

Is anyone at your station even aware of the key role of the Delaware River Basin Commission (DRBC) in regulating -- or, in a sane world, banning -- this process in the Delaware watershed, from which 15 million people, including NYC, get their water? Governor Cuomo's plan would open that watershed to gas development while protecting only the NYC portion of the watershed. How do your Jersey- and PA-based listeners feel about that?

Even less well understood, I suspect, is the pivotal role being played by Governor Christie in pushing for gas development in Pennsylvania and New York, in the watershed from which his own citizens get drinking water. (Hint for understanding Christie's motivation: NJ-based Hess Corp. holds the right to drill in about 75,000 acres of the Delaware watershed.) But when Brian Lehrer had Christie's DEP head Bob Martin on the show, he somehow managed not to ask him about what may be the single biggest environmental threat in our region, or about his role in encouraging it.

It's past time for this station to engage in real reporting on this issue. The fact is that shale gas is not only unsafe at the local level but also a terrible idea on the macro-level, because it will only hasten climate catastrophe.

This story -- that a panel without a single voice in outright opposition to shale extraction is somehow biased against industry -- is beyond belief.

Jul. 27 2011 03:49 PM
Patricia Friedland from Manhattan

We know from the promos, WNYC is not going to take a stand on fracking. But one of the most frightening aspects of this kind of narrow biased reporting on the issue, is that it ignores the context of what is happening in terms of climate, and the limited resources available to deal with any future "catastrophes." Millions and millions of gallons of water are used in the fracking process; it has been proven that that water is contaminated. That means it is possible that sometime in the near future, New Yorkers will not have access to drinkable water when they turn on the tap. It will take unimaginable resources to make that water drinkable. Meanwhile, New York's infrastructure is a decaying mess already causing serious problems, especially serious in a time of ever-dwindling resources, (The fire in the Harlem Sewage Water Treatment Plant caused such a problem: millions and millions of gallons of raw sewage poured into the Hudson River.)

In her book, The Weather of the Future: Heat Waves, Extreme Storms, and Other Scenes from a Climate-Changed Planet, climatologist- --and visiting professor at Princeton, Heidi Cullen, singles out seven regions of the world that will be hardest hit in the future, New York City is one of the seven. At any time, her scenarios of what could possibly happen in the future, would be, at the very least, thought provoking. In the context of Andrew Cuomo's dismissive attitude toward the issue, and WNYC's biased reporting, "thought provoking" doesn't quite cover it.

Jul. 27 2011 02:45 PM
Marc from New York City & Peekskill, NY

Hello, please do not add industry or leases.

Jul. 27 2011 02:05 PM
Donna Fellenberg from Montclair, NJ

Although I still listen to WNYC, I refuse to give them any of my money! I couldn't believe my ears when I heard the oil and gas promos during one of my favorite shows. I had decided since my son had graduated from college this year that I was going to give a big chunk of change to WNYC. Guess what! I changed my mind. Until those promos come off, I will not be "sponsoring" WNYC.
This has really eroded my trust, but I would never miss the "Car Guys." Some things are sacrosanct!

Jul. 27 2011 01:34 PM
thatgirl from Manhattan

To build on Alice Zinnes' and saneenergy's points, it's an appalling thing that WNYC takes as much oil and gas industry "sponsorship" money (their promos, read by one of WNYC staff, can be heard hourly), and sees nothing wrong with weighing in on the composition of this hastily-gathered DEC panel, suggesting rather plainly that the "voice of industry" be better represented.

Really? So the "voice of industry" isn't sufficiently represented when they spend millions with both you and the largest volume NYC print media outlets every week? I could wallpaper my bedroom with the full-page propaganda to which I'm subjected weekly, if it didn't make me sick with mourning over reason forming our environmental and quality of life decisions in NYS.

I would take issue (again) with Brian Lehrer's softball interview with T. Boone Pickens (I've given up on his Readers Digest length/depth "interviews" long ago), but his show seems only designed to whet the audience appetite only sufficiently to generate hits on the WNYC website for days following. Talk about something designed only to attract more advertising dollars from industry! You underestimate the public's knowledge about these metrics mattering when it comes to income: you don't need my pennies in the fund drive, as long as you've got Exxon Mobil, Shell and others.

Many of us appreciate Ilya Marritz' time spent on this vital subject--we've spent significant time sharing his reportage with cohorts who wouldn't readily access your broadcast. But please don't insult the audience he's built by dismissing the voices of these ordinary citizens who've sacrificed their personal and professional time to bring this to light over the past three years.

Be careful--your credibility slip is showing!

Jul. 27 2011 01:00 PM
Alice Zinnes from Park Slope, Brooklyn

One of the major sponsors of NPR is the American Natural Gas Alliance (ANGA). It is therefore not surprising that WNYC's coverage of the new NYS Hydraulic Fracturing panel should be biased toward industry. Looking more closely at the panelists, we discover that some the so called "environmentalists" are not so anti-fracking after all. For instance, Robert F, Kennedy Jr., although recently stating his doubts about industry's ability to drill safely, has huge family investments in natural gas, and has not actively worked against fracking. The NRDC, although a fantastic organization that has done tremendous investigative research on loopholes for the gas industry in federal regulations, officially believes fracking can be done safely if regulated properly. In contrast, most grassroots organizations, i.e. organizations composed of the people directly affected by fracking, do not believe fracking can be done safely, and are therefore calling for an all-out ban on the process. These grassroots organizations are not represented on the Martens panel, but WNYC neglected to mention this fact. Also not mentioned in the WNYC report is that the Acting President & CEO, Business Council of New York State, Inc., plus a number of elected officials are members of the panel.

If WNYC is to argue that this panel is biased against industry, then perhaps it also should argue that President Obama's fracking panel is biased TOWARD industry. Or that industry sends lobbyists daily to our elected officials and regulatory agencies. Or that industry has plastered our media outlets with advertisements full of lies -- ads that both propagandize and make media outlets dependent on their ad revenue. Perhaps WNYC should do stories on why it is that they and other news organizations generally do not present the negative aspects of fracking. Or perhaps WNYC should just cover the fracking issue completely, and objectively.

Jul. 27 2011 12:29 PM

Hello, please do not add industry or leases.


Jul. 27 2011 12:08 PM
Jennifer Davis from NYC

One issue that seems to be left off the discussion table should this unconscionable practice be allowed, is that of regulating, imposing and collecting fines. Would this be left up to the DEC to implement? This is what I could find on the DEC's website: The DEC currently has "over 330 sworn members of the Division of Law Enforcement. Their mission encompasses two broad enforcement areas: fish & wildlife and environmental quality... (this) includes addressing complaints of poaching, the illegal sale of endangered species, and checking hunters, fishermen, trappers and commercial fishermen (lobsters, clams, bait fish, food fish) for compliance... investigating timber thefts, illegal water pollution, improper use or application of pesticides, commercial vehicles producing excessive emissions, freshwater and saltwater wetland degradation, illegal mining and almost any area that affects air, land or water law violations."

330 officers to perform the above mentioned duties AND monitor water withdrawals and disposal of hazardous frack water (oh... I forgot it's no longer considered hazardous AFTER it's been used... then it's classified as only industrial waste) and drilling and flaring and leaks and accidents and truck emissions for thousand of well pads which means tens of thousands of wells.

This is ludicrous... a Sysiphean task, and one that can only result in catastrophe.

And so, once the catastrophe happens, how will the industry be held accountable? We know from experience with the oil industry that they rarely can be held to anything. BP has to date paid only a fraction of the compensation it promised after the Deepwater Horizon disaster. Their clean -up attempts were laughable. Alaska still suffers from the Exxon Valdez tragedy. And we can see from recent events in PA, Arkansas and Texas that the gas industry does not even consider the ramifications of their actions and will admit to nothing. Instead, they make the burden of proof the onus of the citizens knowing full well that most would not be leasing their land for fracking if they had a secure enough financial base to sue for reparations at the onset.

Mark Boling is against a severance tax because "it would make the cost of doing business too high". With or without a tax, the cost of doing this business is already too high.

So, who will pay? The common people: the landowners when their property becomes uninhabitable, uninsurable and unsellable; and the rest of us, when the water becomes unpotable, the air unbreathable, the food inedible and health insurance rates unimaginable due to increased incidents of cancer and heavy metal toxicity and whatever other ailments this poisonous unnecessary industry will bring. The one thing it WILL leave behind? Energy independence.

Jul. 27 2011 10:09 AM
Carlos Briones from NY

Evan, Rema and Sane are correct - We don't have any ban supporters on the panel! How can the "not in my backyard" voice be heard if we are stuck with a bunch of people committed to responsible development?

Jul. 27 2011 09:48 AM
Stan Scobie


This panel seems to be a classic case of "fire, ready, aim." We have seen this happen in PA with drilling starting and proceeding at a rapid pace with helpful rules and regulations, and enforcement monitoring following several years later.

The DEC Panel has nothing to work on:

1. The dSGEIS, the guidance document for HVHZHF in shale in NY has not yet been published in even its draft form - that is to happen soon.

2. When the dSGEIS is fully published, there will be a time and space for public review and comment. Only then will the NYDEC begin to try and draft a final version. In the meantime the Panel would have to guess at what the final version might be - unless the fix is in.

3. The DEC has said that there will be real regulations about shale gas (and other?) drilling - the Panel is supposed to help direct that regulatory process - again how could they do that before the final SGEIS is published?

Stanley R Scobie, Ph.D., Binghamton, NY

Jul. 27 2011 08:35 AM

Evan is correct. Far from the panel being stacked with real environmentalists, it is stacked with people who are pro-regulation. No one on the panel is opposed to drilling. No one on the panel takes a ban position. This panel is entirely aimed at getting started on drilling; for them it it not even a consideration that drilling NOT happen. If they impose a severance tax, the industry will cry out how wronged they've been, and Cuomo will tout it as revenue for the State. Meanwhile no tax-based mitigation fund will ever be able to replace a ruined aquifer, or rebuild the landscape after it's become industrialized beyond recognition.

This panel is as unbalanced as Obama's DOE panel, and their mandates are the same: to provide greenwashing and political cover so that drilling can be declared "safe." If this were a truly balanced panel, it would include stakeholders such as Rema, and true grassroots groups who have been fighting for a ban for the past 3 years. We should not be reassured by regulations or supposed mitigation of the destruction that fracking will bring. We should not volunteer for our own destruction by fracking. We should simply refuse to allow fracking to happen here, at all.

I'm appalled that WNYC would even run this piece. Following the lame puff piece with T. Boone Pickens, I wonder what exactly is happening to my former favorite station. Who's bought them off?

Jul. 27 2011 07:54 AM
Rema Loeb from Afton, NY

Here are a few suggestions concerning this panel from one who has spent the last three years studying the issue.
First of all, it makes a huge difference whether you are being told that your watershed is safe, even though others may be impacted. Upstate New York depends upon unfiltered water from thousands of rural water wells. The water is great, at least until the drilling starts. We are told by the DEC that the methane in our water is "naturally occurring," even though it did not naturally occur in our water until a gas well was drilled. nearby. Please read the Duke study, confirming that the closer one's water well is to a gas well, the more likely one is to find methane in the water. We now have over 100 gas wells in Chenango County and many stories of individual water wells with methane that was not present before. Unfortunately, we do not know much about the radioactive materials (such as uranium 226, I believe) that may also be in our water - as well as arsenic, barium, benzene, toluene, ethylbenzene. Water tests are expensive and must be done both before drilling and at intervals after drilling.
This panel is not composed of involved environmentalists. While is comforting to read that Robert Kennedy, Jr. no longer believes that slickwater high volume hydrofracking can be safely done, many "environmental groups" are still wishful thinking, ignoring the mounting evidence of PA and other states. And, as an aside, Donna Lupardo is less environmentalist and more on the wishful thinking list. The minerals division of the DEC already admits that their purpose is not to protect the environment or the public but to permit gas and oil wells.But Donna trusts the DEC.
I have seen or heard little to inspire my trust.

Jul. 26 2011 08:45 PM
Evan Romer from Windsor, NY

WNYC's report suggests that the panel is slanted against drilling. But in fact, there is NO representation from any of the many organizations in NY that actually oppose fracking.

All the environmental groups represented on the panel are in favor of "safe" drilling. There are many, many New Yorkers and many environmental groups in NY who feel that fracking, even with the best regulations, will be a disaster for the environment, for public health and safety, and for our quality of life. Somehow they were overlooked when the panel was chosen.

Assemblywoman Donna Lupardo may once have had "environmental cred," but for the past two years she has been very consistently pro-drilling -- and sure enough, she is quoted here as wanting more industry representation on the panel.

It looks as though Gov. Cuomo wants to make it SEEM as though all sides are having input, while in fact stacking the deck in favor of the drilling companies. In the same way, the Cuomo administration has portrayed the new draft regulations as tough, when in fact they place few significant new restrictions on drilling. The sentence about "political cover" has it exactly right.

Jul. 26 2011 08:20 PM

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