Fracking in New York

fracking in new yorkIn recent weeks, the New York State Assembly passed a two year extension of the state’s current moratorium on high-volume hydraulic fracturing (HVHF) within its borders, suggesting that oil and gas companies will not have access to the NY portion of the Marcellus Shale anytime soon4.  However, drilling company eCorp International may have found a way around the moratorium.  In partnership with GasFrac of Canada, the duo hopes to exploit LPG technology to circumvent the ban on fracking in New York and access previously untapped Marcellus natural gas.

The moratorium on fracking in New York

Following widely publicized predictions of large shale gas reserves in the Marcellus Shale in 2007, oil and gas companies began applying en mass to the NY Department of Environmental Conservation (DEC) for permitting within the state.  At the time these applications began flooding in, there were no laws regarding high-volume hydraulic fracturing in the state of New York1.

High-volume hydraulic fracturing (HVHF) is a process by which oil and gas companies often extract shale gas, utilizing high pressured pumping of large amounts of water-based fluid to fracture dense rock formations.

As of early 2008, standard drilling procedures were regulated in NY under the Oil, Gas, and Solutions Mining Act of 1963 but there was no legislation on file that specifically addressed HVH fracking in New York1.

At the same time that companies were applying for state permits, they were aggressively pursuing mineral rights in the area.  Companies like Anschutz Energy Corporation offered attractive terms to landowners willing to lease their property for production, including hundreds to thousands of dollars per acre and potential royalty payments from production profits1.  Fracking in New York gained publicity and a spot in the national spotlight as citizens weighed these benefits against potential environmental effects and concern for drinking water supply.

fracking in New York protest

Public concern as leasing began sparked creation of new fracking legislation in New York.

In response to public concerns, then Governor Paterson signed into law the first legislation regulating fracking in New York in July of 20081.  This legislation constituted the effective moratorium that was to span the next five years.  While the law did not ban fracking in New York outright, it placed all HVHF operations “on hold” until the DEC could complete a Supplementary Generic Environmental Impact Statement (SGEIS)1.  Due to an ever expanding list of public concerns and the sheer volume of research and public comments addressed in the document, the SGEIS is still not finalized, extending the de facto ban on fracking for 5 years.  In the meantime, the State Assembly has passed the recent official extension of the moratorium, extending until 20154.  This extension currently awaits approval of the State Senate.

LPG and the Tioga Deal may initiate fracking in New York

GasFrac waterless logoFrustrated by the long delays in the bureaucratic process, in 2012, shale gas producer eCORP International developed a plan to potentially circumvent the moratorium.  As the language of the 2008 law specifically referred to high-volume hydraulic fracturing, eCORP began negotiations on a plan to access Marcellus Shale gas using the alternative, waterless fracturing method pioneered by GasFrac of Canada.  Although the process would still require state review under the Environmental Quality Review Act, GasFrac’s process could technically be used to carry out fracking in New York as the wells would be fractured using liquid propane gas (LPG) rather than high volumes of water2.

In an extension of this proposition, NY citizens in the form of the Tioga County Landowners Association (TCLA) announced in the spring of 2012 that they had entered negotiations on a contract to lease 135,000 acres to eCORP to be produced using LPG fracking by GasFrac2.  Although this deal faltered in early 2013 with eCORP and the TCLA essentially returning to the drawing board, the eCORP/GasFrac contract recognizes the potential of LPG fracking to circumvent current anti-fracking laws6.

An LPG loophole?

Although federal regulation of fracking is minimal, across the United States, individual states, counties, and townships have been increasing limitations on fracking in recent years.  Areas that have banned fracking outright include the state of Vermont; Pittsburgh, Pennsylvania; Morgantown, West Virginia; and Mora County, New Mexico5.  Internationally, nations with a comprehensive moratorium on fracking include France, Bulgaria, and South Africa5.

However, much of this legislation refers to “hydraulic fracturing” specifically.  As LPG technology is further researched and developed, it becomes important to consider the scope of these laws.  Will these bans hold if industry begins using fracking that is not “hydraulic”?

LPG is not currently widely used in the oil and gas industry and is considered a “niche technology” for use in water sensitive situations.  As more regions develop hydraulic fracturing bans, are these areas widening the LPG “niche”?  As waterless fracking technology expands, legislators may be unwittingly creating an “LPG Loophole”.

 

References:

1)      Ayala, S. (2011, November 29). The story of nys’s fracking moratorium. The Examiner

2)      Brino , A. (2012, April 16). Waterless fracking method could sidestep ny ban. Inside Climate News,

3)      Cart, J. (2013, May 28). New mexico county first in nation to ban fracking to safeguard water. Los Angeles Times

4)      Gralla , J. (2013, March 7). New york state assembly passes fracking moratorium in largely symbolic measure.Huffington Post

5)      Linehan, J., & Stefan, M. (2013). Global list of fracking bans and moratorium. In Keep Tap Water Safe.

6)      Tioga county, ny lease deal with ecorp falls apart. (2013).Marcellus Drilling News,

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