TO DRILL OR NOT TO DRILL... AND WHAT HAPPENS IN THE MEANTIME?
| Jurisdiction | United States |
(Dec 2010)
TO DRILL OR NOT TO DRILL... AND WHAT HAPPENS IN THE MEANTIME?
The West Firm, PLLC
Albany, New York
THOMAS S. WEST, founder of The West Firm, PLLC, is recognized for his distinguished accomplishments in the oil and gas and environmental fields by the Best Lawyers in America, Super Lawyers, Corporate Counsel Top Lawyers, and Strathmore's Who's Who. He was featured in the 2009 Edition of Upstate Super Lawyers magazine and was selected as the 2010 Professional of the Year by Strathmore's Who's Who in the field of environmental law. At The West Firm, Tom represents clients in the oil and gas sector on a broad variety of issues involving legislation, compulsory integration, administrative adjudication, civil litigation, investigations by the New York Attorney General's office, and criminal defense. In 2010, he and his firm launched a title practice in New York and Pennsylvania and they are actively writing title opinions in both states for the oil and gas industry. In his more than 30 years of practice, Tom has represented the oil and gas industry on many issues. He was one of the principal authors of the spacing and compulsory integration legislation that overhauled New York's oil and gas program in 2005. He was also at the forefront of the 2008 amendments to New York law to accommodate the development of the shale resources in New York State. Tom also regularly represents clients relative to state legislation and currently represents one major operator before the New York State Legislature and the Governor's office relative to oil and gas issues. Also, he has represented major interstate pipelines on environmental issues and is currently working with one large interstate pipeline company to help streamline the review process before the United States Army Corps of Engineers. Outside of the oil and gas area, Tom has an extensive environmental practice, representing a broad variety of clients on environmental issues involving counseling, civil litigation, administrative practice, and criminal defense. He is a 1974 graduate of St. Lawrence University and a 1977 graduate of Albany Law School of Union University, has been admitted to the U.S. Supreme Court, U.S. Court of Appeals for the Second Circuit, and the U.S. District Court for the Northern, Southern, Eastern and Western Districts of New York. He is licensed to practice in New York and Pennsylvania. He is a member of the Executive Committee of the Environmental Law Section and Co-Chair of the Mining and Oil & Gas Exploration Committee of the New York State Bar Association.
OPPOSITION
June 25, 2010
Re: S.8129 B (Thompson) / A.11443 B (Sweeney)
Anschutz Exploration Corporation (AEC) opposes this measure because it will frustrate the orderly development of New York's natural gas resources, deflect much-needed investment dollars for years to come, and eliminate the opportunity for significant job creation in New York State.
AEC is a privately held company based in Denver, Colorado that has been a leader in the natural resource industry for more than 80 years. AEC prides itself on its environmental conscience and consciousness. In addition to oil and natural gas exploration, AEC's holdings include extensive interests in renewable energy and transmission infrastructure in the western U.S. AEC believes in natural gas as the transition fuel of choice and renewable sources as the energy future.
AEC has been active in New York State since the 1970s and has invested more than $50 million in New York State since 2005. AEC is now one of the largest leaseholders in New York State and one of the only operators that is still engaged in any drilling activity of significance. Given the de facto moratorium that exists in New York on developing shale resources until the Supplemental Generic Environmental Impact Statement (SGEIS) has been completed, AEC is developing other natural gas resources that do not depend upon hydraulic fracturing. AEC is fortunate to have leaseholds that include some of the few remaining non-shale natural gas deposits of any significance in New York State. AEC is in the process of developing several Trenton Black River wells in the Southern Tier and is poised to develop shale resources in New York State once the SGEIS process has been completed.
Unfortunately, due to the inability to get permits to develop shale resources in New York State, AEC has diverted its investment activity to other states, which means that we are diverting our capital to those states. This is causing us to incur significant losses as our investment in land leases in New York State remains uncertain pending the outcome of the SGEIS process.
More problematic is the fact that we are finding it increasingly difficult to find investors or potential joint venture partners for New York State activities. They flinch at the mention of New
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York State because they consider the regulatory framework unstable. A moratorium enacted by the New York State Legislature will eliminate consideration of New York investment for many of these investors. Quite rationally, they fear that the New York State Legislature will continue to pass legislation making it difficult or impossible to drill in New York State even though the New York State DEC is in the process of setting the highest environmental standards anyplace in the country, if not the world.
Although it is true that the shale resources will not go away, once the responsible operators like AEC lose their lease positions, they will have no choice but to divert their attention elsewhere where there is more certainty and less capriciousness in the regulatory climate. This will impact New York State for many years to come.
We respectfully submit that the New York State Legislature is at a crossroads. It can stand down, allow the DEC to finish its job and allow industry to demonstrate that they can develop this resource in a safe and environmentally sound manner. Alternatively, it can send a signal to our industry that New York does not want its natural gas resources developed and does not want the jobs and economic prosperity that will come with the development of the shale resources.
Accordingly, we respectfully urge you to defeat this measure and restore the faith of our industry in New York State as an investment opportunity.
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STATEMENT IN OPPOSITION
S.8129 B (Thompson) / A.11443 B (Sweeney)
Moratorium on Clean Energy Development and NY Job Creation
Chesapeake Appalachia, LLC, a wholly owned subsidiary of Chesapeake Energy Corporation ("Chesapeake"), strongly opposes the enactment of this legislation.
This legislation would amend the environmental conservation law to establish a moratorium on the issuance of permits for the drilling of a well which utilizes the practice of hydraulic fracturing for the purpose of stimulating natural gas or oil in low permeability natural gas reservoirs, such as the Marcellus and Utica shale formations.
As the State of New York explores ways to reduce its dependency on imported energy, meet the goals of the State Energy Plan and address climate changing emissions, the development of indigenous natural gas has become an important discussion. Currently, the Department of Environmental Conservation (DEC) is considering a wide variety of key issues that impact the natural gas industry as part of the development of the Supplemental Generic Environmental Impact Statement (SGEIS) for gas drilling in the Marcellus and Utica Shale. One of the most widely discussed issues in recent years regarding...
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