NORWICH – A New York State Department of Transportation permit that would enable contractors for Norse Energy to bore underneath state Route 23 in Plymouth has been delayed since the fall.
Norse’s newest segment of transmission line would connect two wells in Preston to the company’s compressor station at the Diehl well just south of the Smyrna town line, carrying the energy source to either the Dominion pipeline in the north, or to markets in the west via a New York State Electric and Gas line.
Gathering lines to the wells, which are both vertical, was completed in December, and plans were to hook up them up on Dec. 15. The date was later delayed to Jan. 15.
“If it wasn’t for the Route 23 deal, we’d be hooked up,” said Evalyn Blood, one of the well owners. “It’s kind of discouraging that they don’t get completed. I think i’ts a great thing for the economy in the area.”
The other well in Preston is owned by Linda Palmatier of Walking Ridge Development, LLC whose husband, Steven, is Chenango County’s economic development consultant for the natural gas industry.
According to a spokesman, the Norwegian-based energy company thought it had secured all of the necessary permits with the state’s DOT prior to initiating the project in November. The DOT, however, apparently sent them a boring permit to complete, but not a use permit.
“In fairness, there was some confusion, and not entirely their’s (the DOTs). We didn’t realize they didn’t initiate both (permits),” said Dennis Holbrook of Norse. “We are doing our best to try to move the process forward with the DOT.”
A spokesman for the state said the DOT is awaiting for receipt of official documentation from Norse Energy that it has completed the state environmental review process.
“This documentation is needed before NYSDOT can take action,” said David Hamburg, press secretary in the DOT’s Region 7 office in Binghamton.
Holbrook said his company had addressed all the various environmental compliance issues with the New York State Department of Environmental Conservation, including the State Environmental Quality Review statement, and is just waiting for the DOT to issue the use permit.
“All of this will be much less confusing once the DEC finishes the SGEIS (Supplemental Generic Environmental Impact Statement for potential natural gas drilling activities in the Marcellus Shale formation) process. Then we’ll all know how to handle these things,” Holbrook said.
Meanwhile, it’s not just the well owners who are losing out on the potential profit from production. A total of 16.5 percent of one well’s production value would be shared by the owners, the town of Preston, Chenango County and applicable school and fire districts based on the distribution of property taxes. Holbrook said the two wells are expected to produce about 1,000 mcf’s per day initially, dropping off incrementally over time. With about $5.25 on the marketplace for the commodity currently, approximately $1,000 per day is going unrealized. (Natural gas wells produce for at least 15 to 20 years.)
The pipeline extension would also be used to eventually connect another existing well in Preston, in addition to others in various stages of the DEC’s permitting process.
Chenango County Real Property Tax Services Director Steve Harris reported this month that Chenango County realized $2 million in added value last year from gas wells for all of the towns combined, most of it was from the 13 wells in Smyrna.
“It was a sizable add to the roll for the year,” he told lawmakers at a meeting of the Chenango County Finance Committee.
Harris said there has been a lot of controversy over the methods used by the New York State Office of Real Property Services to calculate what’s valued and what’s not in natural gas well operations. Transmission lines and compression stations are part of the economic unit now. But since ORPS standards were set back in 1980 – before the renewed interest in drilling shale wells was spurred by improved hydrofracking technology – those standards are expected to be updated, he said.