Editor’s Note: This is the first in a seven-part series on natural gas drilling gleaned from a recent staff outing to Pennsylvania. It will continue each Thursday in The Evening Sun.

The Evening Sun staff traveled to Montrose and Dimock, Pa. on Dec. 7, 2010 to obtain first-hand accounts about drilling for natural gas in the Marcellus Shale, the resulting impact on those communities, and, ultimately, to draw for readers a picture depicting what Chenango County could expect if shale gas drilling were permitted here.
It was a cold, snowy day on the drive down, but it took less time than planned to reach the widely-publicized epicenter of the nation’s focus on shale drilling. We drove through the Susquehanna County capital of Montrose, noting the glassy reservoir that feeds it to our left, but, surprisingly, saw no anti-drilling signs on people’s lawns. Only upon reaching our destination of Carter Road in Dimock did we finally see any anti-drilling sentiment.
Cabot Oil and Gas Corp.’s admitted drilling accident that allegedly polluted 18 Carter Road area residents’ wells has grabbed headlines, and the company eventually paid $4.1 million to the residents with contaminated wells and $500,000 to partially offset the state’s investigation into the cause of well contamination. Reporter Brian Golden scored an interview with one of the affected families, and in the next article of this seven-part series, he’ll describe their sentiments and the Dimock disaster in detail.
Brian’s piece will also delve into the environmental activists’ perspective on the dangers related to the controversial high-water volume, hydraulic fracturing drilling method needed to extract the energy source from shale, as there have been other alleged accidents in Pennsylvania, West Virginia, Louisiana and Wyoming. The possible water, soil and air contamination from fracturing ultimately resulted in an Obama Administration directive to the Environmental Protection Agency in March to study for a second time whether it should be regulated under the federal Safe Drinking Water Act.
Most readers know by now that fracturing, which is not new, just improved, also prompted New York Gov. David Paterson to take caution back in 2008 when companies began targeting this state’s newly discovered riches in the Marcellus Shale. He halted permitting, giving the Department of Environmental Conservation time to revise and update its regulations. Executive orders announced during the governor’s last days in office have extended release of those regs through at least July, leaving companies and landowners wanting to develop the region’s shale gas potential effectively shut out of New York at this point.
Chenango County followed the DEC’s lead and embarked upon its own investigation of natural gas drilling activity. From Town of Otselic Supervisor David J. Messineo’s first remark back in 2005 about “clandestine gas-related activity” along county Road 16 between his town and Smyrna, to the formation of a Natural Gas Advisory Committee in 2008 and subsequent hiring of an economic development consultant in 2009, Chenango’s government has asked questions, searched answers and struggled to control both the existing natural gas drilling in sandstone and the future natural gas drilling in shales.
Our day trip took us on many windy, hilly and narrow dirt roads that were reminiscent of the back roads in McDonough, Otselic or Smyrna. And, as is easily the case in those Chenango County towns, it’s not surprising that we got a bit lost. But, despite the snow and in-the-middle-of-nowhere feel, and the abundant, gas-related truck traffic, it was obvious that the roads had been recently maintained, and some of them even widened and improved.
Reporter Tyler Murphy had the opportunity to sit down with Montrose’s emergency management officials to discuss actions taken to regulate municipal ordinances and maintain safe roads, water and pipeline infrastructure. His article will describe how the town has prepared itself to respond to drilling-related accidents as well as offer a history of the impact of natural gas drilling on Dimock from when it began in 2007 to present, including road boring, seismic testing, noise control and the resulting impacts on residents.
Western Pennsylvania and New York have long histories of subsurface oil and mineral exploration, beginning in the late 19th Century. But perhaps Pennsylvania’s heritage as the coal capital of the world during the Industrial Age gave the Commonwealth’s Department of Environmental Protection less cause for concern when shale drilling for natural gas began. After all, it was the University of Pennsylvania that came out with the new figures reporting the astounding 500 trillion cubic feet of natural gas in the Marcellus, which, if true, would make it the second largest natural gas field in the entire world. At current national consumption rates, the Marcellus is predicted to meet our nation’s natural gas needs for over 20 years.
So unlike in New York, Pennsylvanians have already experienced the economic windfalls that accompany producing natural gas from the Marcellus Shale. According to a recent study released by researchers at Penn State, the industry will help create nearly 212,000 jobs across the Commonwealth over the next decade. In 2009, Marcellus development was responsible for the creation of 44,000 jobs. To date, landowners have received more than $1.7 billion in royalties and lease payments from Marcellus producers. And this production has also generated close to $400 million in state and local tax receipts – with that number expected to double this year.
Whether we like it or not, experts predict approximately $30 billion worth of natural gas from multiple formations lies under the ground in Chenango County. Even soil and water conservation experts predict that amount – and billions more throughout the Southern Tier – is too much money for the state to walk away from, particularly when it faces a $9 billion deficit, 10 percent unemployment and few, if any, prospects for boosting the economy.
“We are all kind of puttering away on the assumption that that’s where we are going to be in a year or two years from now. Nobody’s seriously saying that it won’t happen,” said Chenango County Cornell Cooperative Extension Director Ken Smith.
That’s the general assumption of people who are farmers struggling to make ends meet, business owners faced with higher taxes and fees and governments confounded by social services mandates. About 150,000 acres of property in Chenango County is already under lease to natural gas companies such as the Norwegian firm, Norse Energy, and the owners of 150,000 more acres are sitting tight within the Central New York Landowners Coalition, the largest in all of upstate New York.
Indeed, the natural gas industry has already become part of our economy. According to the Chenango County Planning Department, there are 157 wells in different stages of permitting, drilling and producing, including some that have been plugged an abandoned. Of that number, there are 27 active wells in Smyrna, six in Plymouth, two in Preston and between 10 and 15 pending permits.
According to company officials, Norse Energy invested $73 million in 2008 and $40 million in 2009 on natural gas production in Chenango County. When combining the production taxes paid on producing wells and the land it owns outright, Norse generated $400,000 for Chenango County’s school districts for the 2010/2011 school year. The Sherburne-Earlville School District took in $280,000 alone. Moreover, the town of Smyrna’s fully assessed value increased by $1 million.
Reporter Melissa Stagnaro’s contribution to the series will explore the economic development aspects associated with shale drilling in Susquehanna County and in adjacent Bradford County, which is currently the hub of the Northern Tier’s Marcellus Shale activity. She will also zero in on the potential impacts of natural gas drilling on Chenango County’s number one sector, agriculture.
Rounding out our series, and to provide as much local color as possible about Dimock and Montrose, Reporter Brian Golden’s last article will be a person on the street set of interviews. After we returned from our trip, we thought it would be interesting to gauge the same sentiment from people who live in Smyrna, Plymouth and Preston where Chenango County’s drilling is ongoing, so Tyler Murphy’s conducted local interviews to add to Brian’s piece.
And finally, the cap stone article in the series will address the differences in government regulations and taxation between the two states, as it pertains to the natural gas industry, and what part New York, the Southern Tier and Chenango County might play in the future development of this alternative fuel source.