Fordham Law


Economic, environmental impacts of gas fracking contested in New York

Fordham Law in Platts, March 08, 2011

Media Source

With a June 1 expiration looming for an executive order prohibiting most hydraulic fracturing for natural gas in New York, a debate Tuesday highlighted the contentious economic and environmental issues at play.

While some speakers at the Fordham University Law School forum argued that the prohibition unfairly keeps royalty owners and gas producers from exploiting the resource, others said that such development would cause environmental damage and degrade the market value of rural areas.

"If there are 20 to 30 million gallons of [drilling wastewater] under your house or under your farm, who is going to buy it?" asked Peter Cambs, a lawyer with Parker Waichman Alonso, based in Bonita Springs, Florida.

"If the subject is damages," countered Michael Joy, a lawyer with Blitekoff & Joy of Amherst, New York, "let's talk about the damages to a person prevented from exploiting an economic benefit they own. We are talking about billions of dollars."

The executive order issued by former Governor David Paterson expires June 1, and the state Department of Environmental Conservation is completing a supplemental environmental impact statement. The panelists did agree that the executive order only prohibits high-volume fracs, those of 80,000 gallons or more.

More than 500 permits were issued in 2010 for both vertical and horizontal wells.

The third speaker, Christine Fazio of the firm Carter Ledyard & Milburn, based in New York, said both sides need to find middle ground.

"We cannot ignore the potential economic benefits or the environmental impacts," she said. "The natural gas companies need to be proactive. Right now the public perception is against drilling, and by opposing regulation, the gas companies have hurt themselves.

"They should establish common best practices and standard monitoring," she said. "Good regulation benefits the industry by getting rid of the bad apples."

--Gregory Morris, newsdesk@platts.com