NORWICH – An uncharacteristically lengthy discussion of natural gas issues capped February’s meeting of the Chenango County Board of Supervisors this week.
A discussion of compulsory integration restrictions, hydrofraking pollution, municipal roadway ordinances and forming a consensus on the county’s position on drilling ensued for 25 minutes and drew comments from eight of the county’s 23 supervisors.
The exchange followed board business that included the adoption of 25 resolutions, a Commerce Chenango budget presentation and committee appointments. It was one of the longest monthly meetings held in the recent past.
The subject of natural gas exploration and drilling, whether it be into lucrative shale formations, such as the Marcellus and Utica, or immediately promising Herkimer or Vernon sandstone strata, has consumed not just Chenango County and the Southern Tier, but all of New York State. It is currently pitting upstate farmers desperate for income versus city dwellers who fear the byproduct of drilling could pollute their upstate drinking water supplies.
Supervisor Ross Iannello kicked off the discussion about local exploration and drilling by asking for immediate board support in leasing county-owned land at Preston Manor. The land is being integrated into a Norse Energy, Inc. spacing unit at an adjacent well site. Iannello and other supervisors who make up the county’s Natural Gas Committee have been pushing the board to take advantage of an opportunity to profit.
Only a short window of time remains to enter into a contract. The New York State Department of Environmental Conservation will hold a compulsory integration hearing on the order in early March. (A previous mid January hearing was postponed.)
It was a call the Town of New Berlin supervisor made upon first learning of the opportunity last fall, in hopes of garnering a more lucrative royalty payoff for Chenango County taxpayers. Iannello repeatedly asked for the board’s support this week, both on Monday and in a Planning and Economic Development Committee held on Tuesday. (See sidebar.)
“We are going to lose revenue. ... The bottom line is if we don’t move on this, we are only going to get 12 .5 percent, not the 25 percent that would be possible for taxpayers,” he said.
Iannello requested such a resolution in the Planning and Economic Development Committee in December, but his motion died, he said, because the committee changed directors.
“It still bothers me,” he told the board. “I want to find some way of getting this land leased.”
“We had months and months to do this already,” he said in an interview following Monday’s board meeting.
Chenango County Attorney Richard Breslin has advised lawmakers against negotiating with companies for the higher royalty option available on standard compulsory integration notices. Breslin cites County Law 215’s 5-year lease contract limitations. Gas companies would require longer terms due to the nature of production.
Iannello suggested looking for “a possible way of getting around the law,” by contacting companies that might renegotiate after the five-year time period. He said 215 permits consecutive lease periods of 5 years.
The opportunity presents a second time that county land in Preston has been involved in an adjacent well’s spacing unit, and the county has elected to take the integration order’s least profitable option. Breslin remained silent during the meeting, often shutting his eyes and leaning back in his chair as the natural gas discussion ensued.
At present, state representatives have sponsored a bill in both houses that would amend County Law 215. Iannello suggested that the amendment might pass in the very near term.
“I know the state takes forever to do things, but somehow I don’t think it’s going to take them five years to amend 215,” he said.
In regular business, and as advised by Breslin, county lawmakers adopted a resolution that would enable the board to enact any amended legislation, once it is passed at the state level. The Senate and Assembly bills are sponsored by Sen. Thomas W. Libous, Assemblyman Bill Magee and Assemblyman Clifford W. Crouch.
Chenango County Natural Gas Committee Chairman Peter C. Flanagan, D-Preston, deferred several of Iannello’s questions to the county’s attorney. Flanagan said while he didn’t know of any specific offers on the Preston Manor land, he agreed with Iannello that companies might be interested in leasing.
“We could find companies out there that might trust us, and after five years, let us sign up again,” Flanagan said. “But, it’s a lot of work, and is the board going to give me the authority to speak for it? We don’t’ have a lot of time for a proposal.”
“I’m sure the taxpayers aren’t going to cut our fingers off if we take the time necessary to do this,” said Iannello.
Town of Preston park land was included in the same well spacing unit as the county. The Preston Town Board passed a resolution to surplus the park land, and has been negotiating with a company that is interested in leasing it in place of the integration order.
Board of Supervisors Chairman Richard B. Decker said he didn’t see why the board “couldn’t take a look at it (contacting companies).” However, he suggested that doing so by the deadline was “a dead issue.”
“If what the industry says is true, we are going to just continue to get integrated down the road. We can look ahead, and put together an RFP (request for proposal),” he said.
Supervisor Jack Cook, R-Greene, suggested that Iannello’s call for soliciting companies is premature. “How much money are we talking about? We don’t even know what’s down there. Nobody knows what we are going to get out of this. We can’t ask a company for something that we don’t know what we are asking for.”
Supervisor John Phelan, R-Coventry, said gas companies are most likely “cherry picking where the best bets are now.” He suggested passing a resolution with the “intent” to lease if 215 is successfully amended.
Supervisor Dennis Brown, D-Pharsalia, concurred with Cook, saying he would be “uncomfortable with the caveats of the lease when we don’t know what’s down there.” He pointed to the Planning & Economic Development Committee as the place to beginning drawing up a proposal request.
Brown told the board he had been educating himself about the natural gas claims within the Marcellus and other formations underground in the region, as well as the process of hydrofraking. He referred to the byproducts of drilling, the strata’s fluids and hydrofraking water released afterward, as “real nasty stuff.”
He also asked the supervisors of towns where wells have already been drilled whether they have been satisfied with gas company repairs to roadways damaged from trucking in water. Both Flanagan and Jim Bays of Smyrna said they were satisfied. Iannello said his town experienced no road damages from seismic testing, but has a $13 million bond in place as a precautionary measure. Flanagan said Norse Energy paid $30,000 to repair one road that was damaged in Preston. Norse has drilled four wells in Preston and built a gathering pipeline.
Flanagan said towns should educated themselves and conduct a road assessment survey for possible future legal purposes. The Town of New Berlin highway department is taking photos of roads twice a year, Iannello said.
Afton Supervisor Robert Briggs, in whose town two vertical wells have just recently been permitted, asked the county for a uniform road damages law that all towns could adopt.
“We have a proposal on the floor now, but I think it’s too restrictive. It would be great if we could standardize. I don’t think we should all be coming up with different laws,” he said.
“Clearly, that’s what we’ve been wanting,” said Bays, whose town has numerous wells and a pipeline.
Brown asked the board to develop a consensus on its stance on drilling, either pro or con. He said despite water contamination possibilities, the amount of water needed to drill a well in Pharsalia would equal “one percent of what’s leaked out of New York City’s watershed system.” He also pointed out that economic development “is happening right now” for farmers who have leased their land for drilling and pipeline easements.
“Twenty-five thousand dollars a year has helped some stay in business,” he said.
Bays agreed that forming a consensus was necessary, but he called the process “so complicated” due to legitimate environmental concerns about containing formation and post drilling fluids.
“What comes up currently goes into an open pit. I have a problem with that,” he said, adding that he agreed with the Chenango County Farm Bureau’s stance on mandating a closed loop system in leases.
Natural gas development figured prominently in Commerce Chenango President Maureen Carpenter’s report as well. She fielded questions about developing the county’s Earl B. Clark Business Park in North Norwich into a staging center for gas companies to warehouse supplies and materials, and suggested that the now defunct railroad might figure in transporting water and other supplies to and from the area in the future. Carpenter also said some of the county’s economic development funds were being used to create a directory of local industry-related suppliers and contractors that gas companies might consult.
Decker commended Supervisor Flanagan and the Natural Gas Committee for keeping county supervisors informed. He referred further questions to the committee or the county’s Planning and Development Department.

Sidebar
NORWICH - The Chenango County Planning and Economic Development Committee has given Attorney Richard Breslin less than two weeks to develop a request for proposal that could be sent to entities that might be interested in leasing county land.
The committee has requested the completed proposal by the next meeting of the Natural Gas Committee on February 23.
Town of New Berlin Supervisor Ross Iannello made the request with the committee’s full support.
Chairman David C. Law said, “Why linger. It’s a major issue.”