Buried deep underneath the ground is a layer of rock known as the Marcellus shale. Named in 1851 after the town of Marcellus, near Syracuse, this layer of shale rock was formed from oceanic deposits more than 350 million years ago. The Marcellus formation ranges from 100 feet to 250 feet deep at depths of up to 6,000 feet.
This organic-rich deposit has been reduced to rock containing methane or natural gas. Until recently, extracting gas from shale rock was not economically feasible because of the low porosity and poor permeability of shale. Over the past 30 years, two drilling techniques have made gas extraction from shale economically viable: horizontal drilling and hydraulic fracturing, also known as hydrofracking.
Beyond state lines
The Marcellus shale does not know state borders and extends into New York, Pennsylvania, Ohio, West Virginia and Maryland. These other states have begun to tap this resource with extensive economic benefits. Pennsylvania permitted 1,985 Marcellus wells in 2009 and already has approved permits for 584 wells through April 2010. Many of these wells are in the Pennsylvania counties that border the Southern Tier of New York, including Susquehanna, Bradford, Tioga and Greene counties. Wellheads are in most cases a few miles from the New York counties of Broome, Tioga and Chemung.
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Permits translate to active drilling sites that employ engineers, scientists and drilling operators. Secondary economic benefits from these direct jobs include hotel and hospitality, construction materials, drilling supplies, and transportation and logistics. Pennsylvania has already begun to experience a direct economic benefit from Marcellus shale development with corresponding tax and royalty revenue.
In New York, however, nothing is happening: no permits, no jobs, no revenue and no economic benefit.
The state Department of Environmental Conservation has stopped all permitting of Marcellus wells while a document, the Supplemental Generic Environmental Impact Statement, is under review. This SGEIS will serve as the guidance document for drilling and wellhead operations once permits are issued.
While a public comment and review period closed on Dec. 31 of last year, landowners and drilling companies must now wait for the DEC to review the thousands of public comments.
While there has been much debate on the safety and impact of hydrofracking, it is being done safely in thousands of wells, right now, in all other states that overlie the Marcellus shale as well as other shale formations in the United States, including the Barnett in Texas and the Haynesville formation in Louisiana.
Hydrofracking has been a technology used for over 30 years. What is new is the application of horizontal drilling with hydrofracking to make shale gas production economically competitive. Pennsylvania has recognized this valuable resource and is actively promoting shale gas development in partnership with Penn State and numerous other educational institutions, leaving New York behind.
While most gas consumed by New York consumers is produced in the Gulf region, the benefit of the Marcellus shale is its location and proximity to major distribution pipelines where there is demand, namely the major population centers from Boston to Washington. If New York is to benefit from gas well development, produced gas must be transported where there is demand. As we wait, spare capacity is being spoken for in the Millennium Pipeline, a major transport pipe that runs through the southern tier to Rockland County in the lower Hudson Valley of New York. As wells are developed in Pennsylvania, pipeline capacity is committed.
It is estimated that in less than three years, all available Millennium capacity will be allocated, namely to Pennsylvania gas producers. Any new wells will be capped and held in reserve. Many of these wells will be in New York, where permitting and drilling was extensively delayed. The net effect will be significantly reduced economic benefit for New York as drillers and producers forgo wellhead development in New York.
Several bills have been proposed by the New York State Senate and Assembly that will effectively suspend permitting and drilling, even after the DEC approves the SGEIS. These bills are mainly supported by environmental advocacy groups under the premise that more “study” is needed on the effects of drilling. Their goal, however, is to stop drilling.
My answer is to let the professionals at DEC complete and issue the SGEIS immediately so a comprehensive set of rules are established to safely develop the Marcellus shale. All of New York would then benefit from the needed jobs, revenue and added economic diversity this industry will add to New York.
Edward Leighton lives in Niskayuna. The Gazette encourages readers to submit material on local issues for the Sunday Opinion section.