Alex Mills
By Alex Mills
It’s official: The good people of New York will be paying an arm and a leg for electricity this winter.
New York’s Governor Andrew Cuomo’s administration announced recently that it will prohibit hydraulic fracturing statewide even though the southern portion of New York has excellent potential for cheap and plentiful reserves of natural gas.
Just a few weeks ago when a winter storm blew through the Empire State natural gas prices shot over the $10 per thousand cubic feet (Mcf) mark while most of the nation paid $3 to $4. The reason was the people who trade on the spot market for natural gas felt that there was a shortage of natural gas in the area. And, when demand exceeds supply prices rise.
New York, which is a net importer of energy, could be a part of the solution to its energy problems by following the lead of its neighboring states Pennsylvania, West Virginia and Ohio. The Marcellus Shale formation encompasses all four of these states. In 2013 alone, Pennsylvania produced 3.26 trillion cubic feet of natural gas from the Marcellus, West Virginia produced 717 billion cubic feet, Ohio 186 billion cubic feet, and New York 23 billion cubic feet.
New York’s production probably will decline even further because if the industry cannot stimulate the wells in the Marcellus Shale formation with hydraulic fracturing techniques there will be no reason to even drill the wells.
The New York State Department of Environmental Conservation said it would issue a recommendation to prohibit hydraulic fracturing following a study by the agency.
The agency cited the potential health problems from contaminated drinking water, soil pollution and methane releases. However, state and federal regulators of the oil and gas industry have stated many times that in the 60 years that the industry has been fracturing wells there has never been a case of groundwater pollution.
The conservation department also noted that the cost of regulating hydraulic fracturing could overwhelm local and state governments.
Pennsylvania communities along the border of New York initially greeted the news with delight. Some believe that the money and jobs that would have been spent in developing natural gas reserves in New York probably will be spent elsewhere hopefully in northern Pennsylvania.
Natural gas producers in Texas, Louisiana and Oklahoma have been fighting gas from the Marcellus over the gas market back east. Natural gas from the Marcellus has a big advantage, because it is much closer to consumers.
Alex Mills is President of the Texas Alliance of Energy Producers. The opinions expressed are solely of the author.
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