Get out of the Gate on Fracking

We spent some time in New York's Southern Tier and just across the border in Pennsylvania a little bit ago. We had a handful of goals for the long weekend --get some time away from work, get some winter pictures, and have someone else make our bed and breakfast, and we succeeded on all counts.

Some of those pictures we took in Pennsylvania, and while we were there we got to thinking about fracking. While New York has some clear ideas on gambling, and keeping money here in NY that is currently flowing to states like Pennsylvania, fracking is one of those things that happens only there (in PA) but is still just being thought about here. Thought about, and thought about, and thought about, and thought about, and thought about but not decided upon. I looked for but did not see any obvious signs of fracking around Wellsboro PA, so either it's well hidden, I don't know what to look for, or we weren't in the right area to see anything.

NY DEC illustration

I've long been of mixed opinion on whether we should allow high-volume fracking, the kind that's all the rage in other states, here in New York, where we've allowed the low-volume kind since the 1950s.

The map at left shows, in the brown outlined area, the location of the Marcellus shale formation in New York State, which is where we'd frack if we were so inclined.

If we were to allow it, the most attention would likely be in the area near the NY/PA border, where we stayed on our long weekend, and where the gas is collected way below the surface -- 7,000 feet or more -- rather than throughout the rest of Central New York and the Finger Lakes, where the gas is considerably closer to the top and accessible without as much effort (or risk).

These are the three key things that impact my thinking on this:

• a concern for protecting our water sources, as well as our other natural resources
• a concern for property owners to reasonably use their land
• a concern for at least some kind of 'home rule'

Now, as noted above we're still studying, and there's a ton of information in the draft report (available on the DEC's website) about what would be done or could be done or couldn't be done. We even sent people to Pennsylvania to study what's happened there, and how to regulate differently (it not better) to avoid some of the problems they had in the early going. But in summary, here's what the proposed regulations would offer:

• High-volume fracturing, or fracking, would be prohibited in the New York City and Syracuse watersheds, including a buffer zone
• Drilling would be prohibited within primary aquifers and within 500 feet of their boundaries
• Surface drilling would be prohibited on state-owned land including parks, forest areas and wildlife management areas
• High volume fracturing would be permitted on privately held lands under rigorous and effective controls

DEC goes on to note that 

The recommendations, if adopted in final form, would protect the state's environmentally sensitive areas while realizing the economic development and energy benefits of the state's natural gas resources.  Approximately 85 percent of the Marcellus Shale would be accessible to natural gas extraction under these recommendations. 

So - regarding my first bullet, the water and natural resources -- the regulations would address my immediate personal needs (not messing with the Syracuse watershed), and they would also go quite a ways to protect some of our other precious natural resources in New York, by keeping state-owned lands free of wells, and by regulating wells on private lands.

One could make the case that protecting the municipal water supplies of Syracuse and New York City by not allowing landowners unfettered rights to use their property sort of trumps my second bullet. However, the 'reasonable' quotient applies here. I mean, one farmer who happened to end up on top of some gas-rich geologic formation doesn't get to trump the better interests of the larger population of the state, does she? And, by allowing rigorously regulated fracking on 85% of the Marcellus Shale formation, the DEC seems to offer a significant population of landowners the opportunity to obtain reasonable use of their property.

Of course, let there be no mistake: nobody does rigorous regulation like New York, and it might end up that some folks who think they're sitting pretty on top of a natural gas mother-lode may find out that their gas isn't worth enough for anyone to go to the effort. In which case, the landowner will continue using their land the way they are now, sell to a developer for a non-fracking purpose, or do whatever else constitutes a reasonable use of their property.

My bullet #3, on 'home rule' of some kind, is about allowing local governments and citizens the opportunity to control their own destiny through hopefully hearty discussions, and the resulting laws that come out of them. While I've been accused of being one of those darn liberals who thinks the government should tell us what to do, I believe that the people who are going to have to live with the consequences of laws that are passed should have a very loud voice in what gets passed. They should use that voice regularly with their elected officials, and particularly when it comes time to vote.

This is not an all or nothing kind of thing, as noted with bullet #1, for example. I also think that we have way too many 'local' jurisdictions here in New York, and frankly some of them sometimes make what appear to be bad decisions -- but generally I think the local people should be allowed to make the decisions they want to live with, and be allowed to live with the decisions they want to make.

So, with all that said and out of the way, here's one way I think I could live with fracking:

1. The fracking companies put a specified amount of money in an interest-bearing escrow account. It could be based on how many wells they're putting in, how much gas they expect to tap, a per capita figure for all residents in the area, or on some other number, but the point is they set aside money as a guarantee, if you will, that they are committed to the area and to being responsible stewards of our resources. The fund would grow by additional contributions should the formula's multiplier increase. More wells put in, more gas extracted, that kind of thing. Sort of like a 401(k).
2. If needed, a portion the money in the account could be withdrawn and used for specific and immediate needs, such as those outlined in #3 or #4 below, as long as those needs are described in the fund documents.  The documents should also include the time frame for replenishing any withdrawals. And any funds taken out must be replaced all at once, not a little bit at a time. So, a million bucks out means a million goes back in, and if the rules say within 30 days, they that's how long the fracking company has to replace the money. The interest cannot be touched. Violations of the fund rules mean the fund balance including interest goes to the municipality. 
3. The fracking companies sign a document saying that they will be responsible for ALL costs associated with cleaning up ANY accident that might occur.  This means any incident below ground, above ground, issues with the drinking water, removal and transport of the fracking solution and related ingredients, and so on. All means all; any means any. 
4. The fracking companies also agree to a net-zero impact on the municipality for things like police, fire, DPW, and any other department that might need to provide services should an unfortunate incident occur.  So, for example, overtime costs that would otherwise be borne by the residents would be paid by the fracking company, and would NOT be added to the municipal employee pensions. That kind of thing.  Net zero means exactly that.
5. The municipality would agree to set aside a percentage of the money flowing to them as a result of the economic boom from fracking (taxes, licensing, sales tax on materials, new housing, etc.) and dedicate that money towards infrastructure -- including reliable, low-cost Internet for all residents, for example; and new roads, and water mains, and considerations for placing utilities underground, and so on. This shares the wealth with all of the residents who are impacted by the introduction of fracking to the neighborhood. 
6. A further percentage should be set aside by the municipality for their rainy-day fund, so that they don't end up high and dry when the boom is over -- because, sooner or later the boom will be over.  The rest of the money can be distributed as seen fit by the local voters. Maybe they choose royalty payments to residents, similar to what Alaska does with oil revenue.  Maybe they reduce property taxes, or dedicate the money to schools, or youth programs, or set up a legal fund for land owners to help get the best deal from their leases. It's up to them how the money is spent.
7. The fracking companies pay for independent on-site research/monitoring and testing for air and water quality. This is not a one time deal, it's continuous monitoring - the canary in the coal mine.
8. The DEC establishes a satellite/regional office in the neighborhood, and makes sure no corners are cut. If corners are cut, the boom is lowered, the escrow account is forfeited, that kind of thing. 
9. The State collects taxes and fees in accordance with whatever rules are in place at the time; ideally, the rules would be similar to how the gambling rules are set up, where the home county gets a specific return, and the rest of the money is distributed to the region, with a smaller percentage going to the state. 

The point of all of these rules and restrictions?  The companies that stand to benefit have significant skin in the game, they accept the risk for what they're doing, and they put their money where their mouths are. The municipality agrees to the terms and conditions, and accepts the frackers into their homes and lives. The citizens also gain - not only the lucky ones who have the leases in hand, but the rest of them: the schools, the diner owners, the home builders, the cleaning companies, the landlords, the bar owners, the florists, the grocery stores, the interior decorators, the doctors, pharmacies, the veterinarians, environmental waste removers, and so on. And they're as protected as they can be if something goes wrong. 

And me? Like the rest of the residents of New York who are not in an area that will directly benefit from fracking, we'll reap some small economic benefit from taxes flowing to Albany. More importantly, we too are as protected as we can be should anything go wrong, and will not be on the hook for the costs.  

We can talk and study and think until we're blue in the face, but it's time to give everyone a chance to make their decisions, and to live with them.  There are scientists on the pro-fracking side, and there are scientists on the anti-fracking side. There are farmers and other landowners who are fine with it and farmers and other landowners who are not fine with it. There are politicians on both sides, and plain old ordinary people on both sides.

I'm in the last bucket - a plain old person who wonders why we can pass gun legislation in the  middle of the night, or why it costs $60K to keep a criminal in prison each year, or why any of the other myriad things that happen in NY happen here, but we can't get out of the gate and make a decision on fracking. 

Frankly, whether my ideas makes sense or not, someone's ideas have to. Our DEC needs to get their thinking over with and make a decision. If we're going to allow fracking, get the regs out and let the chips fall where they may. If we're not going to allow fracking, tell people, so they can figure out what to do next.