Rebuilding New York's Economy: Can Fracking Be An Answer?

1:52 PM, Feb 11, 2013   |    comments
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By Jon Campbell

Gannett Albany Bureau

ALBANY -  The problem is the years-long economic decline of New York's Southern Tier, an area once known for its strength in manufacturing and agriculture.

WATCH LIVE:  Siena pollster Steven Greenberg will be live 2 p.m. Monday in the Gannett Albany Bureau studio to discuss a recent poll that gauged voters' interest in hydrofracking across the state and in the Southern Tier.

The solution, some contend, is developing the Marcellus Shale, a gas-rich, underground rock formation that touches parts of 29 counties in New York.

Others disagree, pointing to the potential for environmental harm and low natural gas prices that have forced drillers to pull back in some parts of Pennsylvania.

Since taking office in 2011, Gov. Andrew Cuomo has consistently resisted showing his hand when it comes to his administration's review of large-scale hydrofracking and whether it should be allowed in New York.

A fast-approaching regulatory deadline, however, may force him to finally decide: Can fracking be a boon to the upstate economy, and is it worth the risk to the environment?

"If not, then what?" said James Finch, acting town supervisor in rural Conklin, Broome County. "We've got a lot of people here on fixed incomes -- I don't mean pensions, I mean Social Security -- that own the farms and the rural land that are holding out to try and survive."

The economic potential of the Marcellus has driven the debate on large-scale fracking in New York since it was first put on hold in 2008.

In a study commissioned by the state Department of Environmental Conservation in 2011, Buffalo-based consultant Ecology & Environment estimated the state would likely see a boost of 13,491 to 53,969 new jobs over the next 30 years, depending on how many gas wells were permitted.

But environmental and anti-fracking groups heavily criticized the study, in part because the consultant has gas companies among its clients. Since the job estimates were created, a plan was floated that would allow only a limited number of drilling permits in five New York counties -- Broome, Tioga, Chemung, Steuben and Chenango.

Others criticized the state for not doing more to calculate the costs to local governments, such as damage to roads from increased truck traffic and a potential strain on emergency services. DEC Commissioner Joseph Martens said in December 2011 that he would direct Ecology & Environment to broaden its study, but it's unknown if it was since expanded.

Neither the DEC nor the consultant responded to a request for comment.

"The DEC still hasn't studied the costs to local governments and communities," said Martha Robertson, chairwoman of the Tompkins County Legislature. "New Yorkers deserve to know the full picture of what fracking would bring, not just the promises of the gas corporations."

In bordering Pennsylvania, natural-gas production quadrupled from 2009 to 2011, from about 400 million cubic feet per day to about 3.5 billion, according to the U.S. Energy Information Administration.

Meanwhile, employment in the state's mining and logging industries grew substantially over the last 12 years, from 19,300 in 2000 to 30,100 in 2012, according to the Pennsylvania Department of Labor and Industry. From June 2009 to June 2012, employment in the core gas-drilling industries increased by 182 percent in the state -- from 10,909 to 30,854.

"You need to do due diligence in preparing for it because it can be overwhelming to a community, but it is definitely beneficial to a community," said Susan Portnoff, director of the Central Bradford County Chamber of Commerce, located in Pennsylvania's most active drilling county.

"We have hotels that are booked, we have new hotels going in which are hiring people, and energy companies are building here."

Pennsylvania's gas boom had turned the rental market in rural parts of the state upside down. In 2009 and 2010, as gas companies brought more of their workers to the state, a rental property in Bradford, Tioga or Susquehanna counties that had cost $500 a month jumped to $2,500, according to Bill Hall, owner of Endless Mountain Real Estate Co.

"I think when it first happened, it hit us very hard. Nobody was ready for it," Hall said. "Immediately what happened was there became a great demand for rentals, housing units for all of these gas drillers."

Eventually, the housing market balanced out as drillers began hiring more locals and started minimizing their operations in the county as prices dropped, Hall said.

While business and industry groups have touted Pennsylvania as an economic success story, environmental groups have pointed to a number of high-profile incidents. The most publicized has been in Dimock Township, a small town 30 miles south of Binghamton where residents of a rural road saw their well water muddled with methane and contaminants in 2009. Some of the residents have since settled with Cabot Oil & Gas, a company that operated a nearby gas well but has denied responsibility for the bad well water.

New Yorkers Against Fracking, a coalition of anti-fracking groups, began airing a television advertisement last month highlighting claims of water contamination, sickness, eye irritation and quality-of-life concerns from Pennsylvania residents who live near drilling rigs.

"With tens of thousands of wells, transportation and processing devices spread across the landscape of the typical gas fields or plays, hundreds of accidents will happen over a year," David Brown of the Southwest Pennsylvania Environmental Health Project said last month. "No one can assure people who live, work, or attend school near drilling and fracking operations that they are safe."

For Cuomo, the decision on hydrofracking comes with a significant risk-versus-reward factor. If shale-gas drilling does move forward, he would likely offend his Democratic political base and a highly organized anti-fracking movement, which have made clear they believe the potential for environmental harm is too great.

If it doesn't move forward, he risks losing a potential economic opportunity as the state's unemployment rate continues to hover above the national average two years into his tenure.

"There have been no real solutions for the economy of the Southern Tier, which is a place where there has been pretty much economic devastation for decades," said Karen Moreau, executive director of the New York State Petroleum Council. "Natural-gas development, and the resource being located in that area, is a blessing to that area."

Judging whether upstate New Yorkers want fracking to proceed has been difficult for politicians and poll watchers.

A Siena College poll released Monday found an even split statewide: 40 percent of voters in favor, 40 percent opposed and 20 percent who didn't know or had no opinion. In the Southern Tier -- defined by Siena as a 13-county region including Broome, Chemung and Tompkins -- 47 percent supported fracking and 48 percent were against.

The state DEC faces a Feb. 27 deadline to finalize a set of proposed fracking regulations or allow them to expire. The agency will have to finalize a lengthy environmental review by Wednesday if it wants to meet the deadline.

"I support it if it can be done safely and responsibly," said Carolyn Price, supervisor of the town of Windsor, Broome County. "The town of Windsor borders Pennsylvania and we have seen there the economic benefit it has had."

Others worry that local governments haven't done enough to prepare. The environment shouldn't be risked for the economy, said Elmira Mayor Susan Skidmore.

"The rural areas really make their money on tourism," Skidmore said. "Who wants to go to a place where you've got this 24/7 traffic and dust and noise? What does that do to our wineries?"

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