Swann Galleries' annual rare & important travel posters auction set for November 11

Swann Galleries' annual rare & important travel posters auction set for November 11

LONDON TRANSPORT POSTERS TO BE AUCTIONED AT SWANN GALLERIES

JEAN-LUC GODARD RETROSPECTIVE MOVIE POSTER AT AUCTION

A Swiss large format movie poster is being offered by Heritage Auctions in their weekly internet sale.

1920s MOVIE THEATER PHOTOS FEATURED ON CINEMA TREASURES SITE

The upcoming ( May 20 ) sale of photographer signed 1920s photos featuring Boston area movie theaters was just highlighted by Cinema Treasures, a web site devoted to all things old movie house. 


http://cinematreasures.org/

1920s SIGNED PHOTOS OF BOSTON AREA MOVIE FRONTS AND INTERIORS

AT AUCTION MAY 20 2011

A group of 40 matt-mounted eleven inch by nine inch sepia prints by Boston photographer Paul J. Weber,  signed on the matt adjacent to  the photo. “Weber Boston.” 

Plus 7 unmounted unsigned prints.

Photos are of 7 New England movie theaters that date from the late 1920s. Several have visual references to the introduction of sound to motion pictures. (Dates affixed are based on titles of films being shown.)  Each group features a photo of the theater front plus photos of the interiors. 

Paul J. Weber ( 1882 - 195? ) was an architectural, industrial, landscape photographer who worked in the New England area. 

He was hired by the New England Theater Operating Company, a loose affiliation of independent movie house owners. The photos Weber shot were collected into a portfolio created for presentation to the head of Paramount Pictures, Alfred Zukor, who had expressed interest in buying an interest in the theatre chain. 

Paul J. Weber reference: collection of photographs (same format as the theater photos ) in the Fletcher Steele Landscape Collection at Lake Forest College Library, Lake Forest, Illinois.


For further information, contact Rudy Franchi 617 216 5511

Movie Poster News Bulletin: MORE 30s THEATRE FRONT STILLS + ONE SHEETS, LOBBIES, ETC.

Movie Poster News Bulletin: MORE 30s THEATRE FRONT STILLS + ONE SHEETS, LOBBIES, ETC.

MORE 30s THEATRE FRONT STILLS + ONE SHEETS, LOBBIES, ETC.

The second batch of original stills featuring 1930s old movie theater
fronts ( All Quiet On The Western Front, Man Of The World ) are up for
sale at Heritage's weekly internet auction ( http://tinyurl.com/3e8un9b ) which ends Sunday, April 10.This week's sale includes the first batch of interior lobby art 
(Scandal Sheet, Trouble In Paradise, Unfaithful ) plus a selection of items I've been hauling around since selling The Nostalgia Factory, including: 70s porn one-sheets,
Lawrence of Arabia ( 1962 ) one sheet, mighty Joe Young ( 1949 ) lobbies and the French grande for Targets  (1963 ), designed by Sarah Palin.  Regards, rudy franchi

1930s Vintage Stills Of Movie Theater Fronts

Starting this Sunday ( March 27 ) Heritage Auction Galleries will be offering for sale a series of original stills dating from the 1930s that feature  fronts of Boston and New York movie theaters. From the 1920s and right through the 1960s the major studios and their field offices had entire exploitation departments devoted to creating elaborate designs for theaters playing  the first runs of films on their release schedule. This group of stills is the first of a series that will be offered by Heritage on successive Sundays. Each batch of stills is open to bidding for one week.  

Marcellus Shale Water Problems Surfacing

One of the major problems  ( selected from a host of them) with drilling for natural gas via fracking in the Marcellus Shale is the huge amounts of water that are returned to the surface from the millions of gallons pumped in to break the gas containing rocks. The water is not only filled with the unknown cocktail of chemicals and other substances that are used to fracture the rocks,  the returning water picks up all kinds of stuff on its way back to the surface and flows out of the well with a warm and homey glow ..... if your home is in the suburbs of hell, since the water is now contaminated with unsafe levels of radioactive materials.  ( And please let us not forget all the water that doesn't make it back to the surface; water that seeps and seeks its way through major aquifers, polluting home drinking water wells. )  The recent articles in the NY Times series Drilling Down are focusing on the returning water and its proper and most improper disposal. It is being dumped into streams that find their way to rivers and in some cases, directly into the rivers themselves. These are rivers that supply drinking water to millions of people.

GASLAND, MARCELLUS SHALE DRILLING DOCUMENTARY ON HBO THIS MONDAY

This review   is just about the best  I've yet read for Josh Fox's documentary on Marcellus Shale drilling Gasland, which will be shown this coming Monday night ( 21 ) on HBO at 9PM/EDT.  I recommend the review and I strongly recommend the film.
Some of the movie's critics, mostly pro gas drillers, have attempted to dismiss it as an example of a Michael Moore movie screed.  A legitimate critic might find fault with certain aspects of the film, but I doubt they would find  it has  a polemical soundtract. Rather than covering a broad topic with sweeping diatribes ala the often very effective Mr. Moore,  Fox's is  very personal film, more  in the  tradition of the Maysel brothers. 

MARCELLUS SHALE GAS DRLLING EVENT

This press notice is being posted as an FYI for those interested in events related to Marcellus Shale Natural Gas Drilling.


 MARCELLUS SHALE GAS DRILLING EVENT

    Coverage Requested:

    of what might prove to be a contentious meeting of Cochecton (Sullivan County ) Planning Board which is proposing to change local zoning to permit Marcellus Shale gas drilling in 90% of town plus allow for building of man camps for gas workers.
w
    Local group, Keep Cochecton Green, is urging townspeople on both sides of the drilling controversy to attend meeting to question this change.

    Thursday, May 27, 7PM
                    Cochecton Town Hall (845 932 8360)
                    CR 16, Lake Huntington, New York

    Contact: Grace van Hulsteyn
                   845 932-8910
                   212 663 3457
                   gracewildhack@gmail.com

    -----------------------------------------------------------------------------------
    Text of group's mailing to Cochecton residents:

                 Keep Cochecton Green
                                 
                              P.O. Box 253
                                                  Cochecton, New York 12726

     Did you know that the town of Cochecton is in the process of changing its zoning plan to expressly allow horizontal hydrofracture drilling for natural gas in 90% of the town?  No other town in our area has taken such a radical step, which we believe could overwhelm the community, just as Dimock, Pennsylvania has been overwhelmed.

     However you feel about gas drilling, ATTEND THE PLANNING BOARD MEETING on May 27, 7:00 p.m. at the Town Hall.  Learn the facts. Express your views.   http://www.kcr@cochection.org


                         ******************************************

Unanswered Questions About

The Economic Impact of Gas Drilling

In the Marcellus Shale: 

Don’t Jump to Conclusions

March 27, 2010

Prepared by:

Jannette M. Barth, Ph.D.

JM Barth & Associates, Inc. 

Email:  jm.barth@mac.com

ã 2010 Jannette M. Barth, Ph.D.

1.  Introduction 

In light of the undisputed potential for environmental harm from gas drilling in the Marcellus Shale, the principal reason advanced for taking the environmental risks is the positive economic impact that such drilling could have for New York State and its counties.  However, there has been so little actual, current, unbiased examination of the economic impact that it is fair to say that positive economic impact is more an assertion than a proven fact.  It is possible that the net economic impact may be negative for New York State and its counties.
The studies used to support the claim that drilling will bring economic benefits to New York are either biased, dated, seriously flawed, or simply not applicable to the region that would be affected.  Such studies are not a valid foundation on which to base legislative or regulatory actions.

The unsupported assumption of a net economic benefit from gas drilling in the Marcellus Shale is largely based on anecdotal experience and studies from other gas producing states.  Decision-makers in New York should be warned that the economies of New York State and the affected counties are different enough from those of other regions with gas drilling that an independent and thorough analysis of the economic impact in New York should be undertaken before decisions with irreversible consequences are taken.

2.  Brief Background on Economic Impact Studies of Gas Drilling and Multipliers 

Many of the studies of the economic impact of gas drilling have been based on input-output analysis.  Such analysis does not properly account for costs of environmental degradation, damage and general wear and tear to infrastructure, health effects, pollution’s impact on other industries such as tourism and hunting and fishing, and the impact on property values.
Input-output analysis relies on tables of coefficients that link one industry to all other industries.  In a region where gas drilling has not existed in the past, it is impossible to know what those inter-industry coefficients will be, and “borrowing” them from other regions or industries is likely to result in highly inaccurate impact conclusions.
In addition to input-output coefficients, economic multipliers are sometimes also “borrowed” from other industries and regions, and may not be accurate for gas drilling in upstate New York.  It is difficult to compare multipliers as they vary widely by region and by industry, but some general comparisons do hold.  In an area with great industrial diversity, multipliers are relatively high.  An industry that uses materials and labor primarily from within the region will have a relatively higher multiplier than an industry that buys its services and supplies from outside the region.  The region could be defined as a state, county, multi- state area or sub-county area, and these differences in multipliers still apply.  If an industry is in a large urban area, its multipliers are generally higher as greater amounts of industry spending remains in the area.  Small and/or rural areas tend to have lower multipliers, since an industry must use services and supplies from firms outside the area.  So, when applying a multiplier to estimate economic impact, much care should be taken to reflect the economic character and industry diversity of the region being analyzed.

If the anticipated growth in jobs and income in the oil and gas industry does not occur, then the desired indirect and induced economic impacts will not occur, and local and state tax revenues will not grow as hoped.  If newly created jobs are filled by non-permanent and transient workers, then both income tax and retail tax revenue will be lower than anticipated.  Likewise, as many of the established support firms for the oil and gas industry are not located in New York State, corporate tax revenue will be less than anticipated.  The imposition of a substantial severance tax should be considered in New York State not only to ensure that the state will have some revenue to use for mitigation of environmental, health and infrastructure degradation, but also to ensure some revenue to the state in the likely event that the overall economic impact is not as substantial as is currently being assumed.
Decision makers may be on the verge of making bad choices for the health of the regional economy.  The oil & gas industry is not a reliable industry on which to base an economic development plan.  Alan B. Krueger, Chief Economist and Assistant Secretary for Economic Policy at the US Department of Treasury, stated,  “The oil & gas industry is about ten times more capital intensive than the US economy as a whole.”  Krueger continues, saying that encouraging oil and gas production is not an effective strategy for creating jobs.  (Remarks of Alan B. Krueger to the American Tax Policy Institute Conference, October 15, 2009).
The following sections provide a summary of unanswered questions and concerns regarding specific studies and anecdotal evidence of economic impact of gas drilling.  The studies referenced have been cited by advocates of gas drilling in the Marcellus Shale.   The purpose of this survey report is to encourage decision makers to be cautious and insist on credible economic analysis prior to committing to gas drilling and its potential negative effects.

3.  New York State’s Experience with Gas Drilling Does Not Support the Assumption of a Positive Economic Impact 

According to the 2008 Annual Report of the Division of Mineral Resources of the New York State Department of Environmental Conservation, the top 10 gas counties in New York State are Steuben, Chemung, Chautauqua, Erie, Seneca, Cattaraugus, Schuyler, Tioga, Cayuga, and Genesee Counties.  The following table, taken directly from the Annual Report, shows gas production levels and number of wells in these counties in 2008.

Gas Activity in the Top Ten Gas Counties (2008) 

	Gas	Active
	(mcf)	Gas Wells
Steuben	17146368	69
Chemung	15626276	43
Chautauqua	6758069	3438
Erie	1961665	961
Seneca	1606948	214
Cattaraugus	1593604	528
Schuyler	1060947	18
Tioga	1038093	1
Cayuga	838287	291
Genesee	767032	519

In these ten counties, total non-farm employment in 2007 (the most recent year for which these employment data are available from County Business Patterns) was 607,037 and employment in the oil & gas extraction industry in the same counties totaled to 206, or only 0.03% of total non-farm employment.  (Note that only three of these counties, Chautauqua, Erie and Cattaraugus, had large enough employment numbers in this industry to be reported.)  When considering annual payroll in this industry, the story is similar with only 0.04% of total annual non-farm payroll in these counties attributed to the oil & gas extraction industry.
Even if it is assumed, despite evidence to the contrary from employment data, that these top ten gas counties are New York State’s most “energy focused” counties, it is informative to do a quick review of the economic condition of these counties.  A comparison of the economic health of these counties relative to nearby New York State counties shows that the so-called gas counties are not faring any better than the nearby non-gas counties.  The following tables show Percent of Families Below Poverty Level, Median Household Income, Percent of the Labor Force Unemployed and Per Capita Income for each of these counties.
There does not appear to be a significant difference in these measures of economic condition between the “gas” counties and the non-gas counties. 

Economic Health of New York’s Top Ten Gas Counties (2006-2008)

	% of families	Median Household	% of Labor Force	Per Capita
	below poverty	Income	Unemployed	Income
Steuben	8.8	43662	6.8	22901
Chemung	12.4	41611	6.6	22759
Chautauqua	12.7	39865	7.3	21041
Erie	9.9	46814	6.2	26347
Seneca	9.5	45018	5.4	21566
Cattaraugus	11	41942	7.2	20668
Schuyler	NA	NA	NA	NA
Tioga	7.4	51135	6.3	24905
Cayuga	8.4	48991	5.6	22849
Genesee	8.9	48509	6.7	22598
MEAN	9.9	45283	6.5	22848

Source: American Community Survey

Economic Health of Five Nearby Counties (2006-2008) 

	% of families	Median Household	% of Labor Force	Per Capita
	below poverty	Income	Unemployed	Income
Allegany	11.4	41000	8.6	19393
Chenango	8.5	44202	6.3	22925
Wyoming	9.1	50022	6.3	20619
Livingston	7.6	52049	3.8	22230
Yates	10.3	43428	4.6	22130
MEAN	9.4	46140	5.9	21459

Source:  American Community Survey

4.  New York State Has Not Studied the Potential Economic Impact Sufficiently to Assume That There Will be a Net Economic Benefit

Both the economic analysis relied upon by the Draft SGEIS and the economic impact study that was commissioned by Broome County are seriously flawed. 

The Draft SGEIS 

The recent Draft SGEIS does not include an updated economic analysis.  The DEC appears to be relying on economic analysis that was done in January 1988.  No decisions should be based on such outdated analysis.  The economy, spending patterns, natural resource prices and volatility, available financing and a myriad of other factors relevant to calculating gas drilling’s economic impact have changed dramatically in the last 22 years.  And the oil and gas industry of the 1980s is very different from that of today.   The analysis of 1988 seemed to focus predominantly on the oil industry.  The economic impact assumptions made in the Draft SGEIS do not reflect the most recently available input/output tables, so the multipliers are likely outdated as well.   Any economic impact analysis that is worthy of forming the basis for consideration of laws and regulations must be updated to reflect the current market and economy, and it should reflect accurately the actual industry and product being considered.
The outdated report states that the multiplier effect is 1.4, meaning that for every $1.00 of well/drilling output, $1.40 is contributed to the State’s economy through both direct and indirect effects. The report states “the reported earnings multiplier of 1.4 for the oil and gas industry in New York is lower than many manufacturing and service industries, partly because the industry as a whole is not labor intensive, and also because most of the companies which provide services to the industry in New York are headquartered in nearby Pennsylvania.” If an updated economic impact analysis were to find a similar multiplier, then it would appear to make more sense to encourage an alternative industry that would provide a greater economic impact in the Catskills and in New York State generally, such as the tourism industry which is labor intensive and has been growing in the Catskills.  There is a serious question as to whether gas drilling and tourism can co-exist.  It may well be an “either/or” choice.  The greater multiplier effect of other industries may well render gas extraction a poor alternative for economic benefit.

Tourism is not the only alternative.  The “ Broome County, New York, Agricultural Economic Development Plan“ of 2001 shows a multiplier of 2.28 for agricultural crops, and that study concludes that farming should be encouraged for economic development of the county.   If an updated and more accurate analysis were to conclude that the multiplier effect of gas drilling is as great as or greater than that of other industries, then there may be an economic reason to encourage gas drilling. The analysis done to date indicates that based on economic impact alone, gas drilling should not necessarily be encouraged, particularly if the adverse environmental effects of gas drilling could prejudice other industries, such as tourism, outdoor sporting, and organic farming, several of which might in fact have higher multipliers.
In addition, while the 1988 report mentions environmental issues, it makes no attempt to value them. The report states,

Unfortunately, it is difficult to assign precise monetary values to aesthetic benefits such as the beauty of an unspoiled wilderness. The monetary value for improvements in such areas as clear air, clean water, and clean soil are easier to estimate and assign by using parameters such as increased property value, decreased health care costs, increased recreational and tourist use, and improved production from forestry, fishery and agriculture.  

One should question why no attempt was made to estimate some of these parameters.  A thorough analysis should evaluate each of these. The report even states, “Most experts in this field agree that in most cases it is much cheaper to prevent pollution than to restore the environment after it has occurred.”

Clearly, the economic impact analysis performed in 1988 and reflected in the 1992 GEIS is incomplete and inaccurate for application in 2010 and beyond.

An additional worrisome economic impact issue is the fact that multiple times in the SGEIS, the New York State DEC calls for action by local governments. For example, the DEC expects municipalities to monitor the DEC website, to be pro-active in completing road system integrity studies, to attain road-user agreements, to have county health departments undertake drinking water well investigations, etc. The costs of such activities at the local level may be substantial, and they have not been included in any of the economic impact studies or estimates.
The Draft SGEIS itself, in Chapter 7, has suggested adding more than 150 new tasks to the workload of the DEC. The costs of such tasks should be considered in an economic analysis.
Several studies (in addition to the State’s outdated 1988 study) are referenced in the SGEIS, and each has serious deficiencies, some of which are summarized in the following pages.

The Broome County Study 

A study commissioned by Broome County, “Potential Economic and Fiscal Impacts from Natural Gas Production in Broome County, New York”, fails to adequately address a number of factors that must be carefully considered in order to make informed decisions regarding gas drilling in Broome County.

The analysis does not appear to take account of the economic cost of building and repairing infrastructure due to the wear and tear on the roads, public buildings and other structures.  This can be a significant expense for rural towns. The “River Reporter” indicated that as a result of the Millennium Pipeline, the small Sullivan County town of Cochecton suffered road damage in excess of $1million, a large sum for such a small town, with population of only 1328 (as of the 2010 Census).  While the Millennium Pipeline followed a single path, multiple well sites spread throughout a town could have an even more devastating impact on infrastructure.

The analysis does not address the cost of mitigation as a result of environmental damage, including but not limited to drinking water contamination and fish kill.  The Community Science Institute of Ithaca, New York, estimated that anywhere from 1 to 5% of water wells that are in the vicinity of gas wells will become contaminated.  The Penn State Cooperative Extension put the figure at 8%.
While the study touts the use of input-output models, and such models are typically used to estimate economic impacts (including direct, indirect and induced impacts), these models do not capture economic impacts that result from environmental damage or natural resource use, so the positive economic impacts estimated in this analysis of Broome County are, at the very least, exaggerated.   The actual net economic impact may, in reality, be negative.

Full economic costs to the region, such as the potential for a decline in property values and an increase in health costs, are not reflected.  In fact, the assumption in this report seems to be that property values will increase.  It is quite possible that the reverse would occur as many well workers are transient and non-permanent, and existing residents may be driven out due to an increasingly industrial landscape.  Far fewer retirees will choose to settle and second home- owners would certainly be vastly reduced in number. Another negative impact on property values is the recently publicized fact that mortgages may not be available for leased land or even for land that is nearby leased land.  A thorough study would also try to identify how many of the drillers are multinationals who do not pay full income tax rates in the States. 

Declines in other industries are not reflected in the net economic impact. The tourism industry would be negatively affected, as well as the sport hunting and sport- fishing industries, due to both the declining natural beauty of the area, increased environmental damage, and the potential declines in fisheries and wild game.

The analysis focuses on a 10-year horizon that seems to be the expectation for gas extraction in the Marcellus Shale, and it ignores the longer term.  This is a myopic view.  What happens to the regional economy when the gas is gone in 10 years and the land and streams, etc. are polluted?
The analysis uses the IMPLAN input-output model, which by its construct assumes that all of the population (new and old, and low income and high income) would have identical patterns of spending.  Such an assumption overestimates the multipliers and the resulting economic impact if the new employees are part-time residents or have their families staying in other areas, which is not uncommon for gas drilling workers.
Several important and potentially negative economic impacts are not directly quantifiable, but this makes it even more important to be sure that they have been considered as carefully as possible.
It is important to postpone any decision-making regarding gas drilling in Broome County until all of the potential environmental AND economic impacts are considered.

It is interesting to note that The Broome County Legislature adopted an Agricultural Economic Development Plan in December, 2001.  It was prepared by Cornell Cooperative Extension of Broome County and the Broome County Department of Planning and Economic Development with the help of Shepstone Management Company.   Three sections (Sections 13\.3, 1.6. and 1.10) taken directly from the Agricultural Economic Development Plan for Broome County are provided below to show the inconsistencies between encouraging gas drilling for economic development and the economic development plan that Broome County had already adopted in order to preserve the pristine environment while at the same time enhance economic development.
1.3 Income from agriculture goes further than other sectors in helping the economy.
Agriculture produces much higher economic multipliers than any other sector of the
Broome County economy.  A report entitled "Economic Multipliers and the New York
State Economy," (Policy Issues in Rural Land Use, Cornell Cooperative Extension,
December 1996) indicates dairy production, for example, enjoys a 2.29 income multiplier
compared to 1.66 for construction, 1.48 for services, 1.41 for manufacturing and 1.40 for
retail and wholesale trade.  Crops produce a multiplier of 2.28 and nursery and wood
products yield 1.78 times sales.  Applying these multipliers indicates agriculture represents a total contribution to the economy of approximately $55,000,000, not including forestry enterprises, many of which take place on farms and all of which are part of agriculture.
1.6 Farms create rural character and attract tourism.
Farms contribute to Broome County's rural character and protect open spaces essential to
the quality of life for both permanent and seasonal residents.  Any number of surveys of
rural residents and second-home dwellers indicate the primary reasons people live in such
areas have to do with their appreciation of the natural resources and open spaces offered,
but the anecdotal evidence is perhaps even stronger and local tourism brochures provide
examples.  They include references not only to the County's recreational opportunities but
also its "scenic beauty."  They also speak of the "quiet valleys," "enchanting villages" and
"quiet country settings" throughout the County as attractive features for visitors.
These facets are directly created by working farm landscapes in many instances.   They
help support some 217 bed and breakfast rooms offered throughout the County.  There is,
indeed, a direct relationship between farming and the attractiveness of Broome County as a place to both live and visit.
1.10Farmland is an invaluable resource for future generations.
Farmland is a valuable future resource for the County in providing for a healthy and
plentiful local supply of food products and generating new sources of farm income.  Urban
residents of the County, as well as visitors, are seeking locally grown fresh fruits,
vegetables and flowers, both organic and non-organic.  A local organic pork producer also markets products over the Internet.  The presence of five operating farmers markets
(Binghamton, Deposit, Endicott, Johnson City and Vestal) in the County demonstrates just
how important this activity is.

It is clear that gas drilling would have a devastating effect on the agricultural, sporting and tourism industries in Broome County.  If Broome County legislators encourage gas drilling, then they will be working counter to their economic development plan.

5.  The Experience of Gas Drilling in Pennsylvania Does Not Support the Assumption of a Positive Economic Impact for New York State

There has been mention of extensive economic activity created in Pennsylvania due to the gas drilling industry.  Publicly available data do not appear to support this claim.

In Pennsylvania, employment (or number of jobs) has not increased dramatically in the oil & gas extraction industry from 2001 through 2007.  In fact, there was a gradual increase in oil & gas extraction industry employment from 2001 to 2004, a drop in 2005 and then a gradual increase in 2006 and 2007, but by 2007, employment in this industry in Pennsylvania did not reach the prior high of 2004.
Also, as a percentage of total state employment, employment in the oil & gas extraction industry has not changed very much.  It was a lower percentage of total employment in 2007 than it was in 2003 and 2004.  The following data that show these findings are from the US Census Bureau’s County Business Patterns database.





Pennsylvania Oil and Gas Extraction  Industry Employees as a percentage of total number of employees in the State.
      2001  0.03%
      2002  0.03%
      2003  0.07%
      2004  0.07%
      2005  0.04%
      2006  0.04%
      2007  0.05%
Pennsylvania Oil and Gas Extraction Industry Annual Payroll as a percentage of State-wide annual payroll:
      2001:  0.04%
      2002:  0.05%
      2003:  0.1%
      2004:  0.1%
      2005:  0.06%
      2006:  0.07%
      2007:  0.07%
Employment in Oil and Gas Extraction Industry in Pennsylvania:
      2001: 1567
      2002:  1754
      2003:  3566
      2004:  3667
      2005:  1809
      2006:  2093
      2007:  2695
To put these numbers in perspective, as of January 2010, the total number of Walmart employees in Pennsylvania was 48,777, and the tourism industry has approximately 400,000 jobs in the state.

In order to identify energy intensive counties in the state, data for the following counties were reviewed:  
Lycoming, Fayette, Washington, Susquehanna, Greene, Clearfield, Indiana, Wayne, Wyoming and Columbia.  As of 2007, Indiana County had the greatest number of employees in the oil & gas extraction industry and that county had only 316 employees, out of 28,613 employees county-wide.  This does not indicate an “oil & gas intensive” county.

The Penn State Study 

There have been many references to the Penn State Study.  The title of this study is “An Emerging Giant: Prospects and Economic Impacts of Developing the Marcellus Shale Natural Gas Play”. It was prepared for the Marcellus Gas Committee, made up of corporations in the gas industry, and therefore, a highly biased group.  The member companies provided the underlying data for the study.   The report is an exercise commissioned by the natural gas industry to try to prevent the State of Pennsylvania from imposing a severance tax on natural gas.  An intelligent lawmaker should not take this study seriously.  It dismisses very real concerns regarding environmental damages and ignores significant economic costs, all to make an argument against a severance tax, which could help to mitigate some negative effects.

6.  The Experience of Gas Drilling in Texas Does Not Support the Assumption of a Positive Economic Impact for New York State

In addition to Pennsylvania, Texas is often referenced as an example of positive economic benefits resulting from gas drilling.  The Barnett Shale in Texas is said to be geologically similar to the Marcellus Shale and the same technology, horizontal hydraulic fracturing, is used there.
One study, done by the Perryman Group, boasts of tremendous positive economic impact resulting from gas drilling in the Barnett Shale.    The source of funding for the study and the source of the underlying data for the study are both unclear.  Unlike serious, professional studies, data sources are not identified.  The charts in the report simply state “Source: The Perryman Group”.  Surely, at a minimum, New York State decision makers should uncover the data and funding sources for this study prior to assuming that such an estimated impact is realistic.  The econometric model used in this study was developed by the Perryman Group, but there is not a clear discussion of the track record of this model.   Economists who develop models used for forecasting are expected to provide some evidence of the accuracy of the model for forecasting.  This is often done by generating “backcasts” to compare actual to forecast values.  No such verifications are provided or referred to.

Mayor Calvin Tillman of Dish, Texas has recently come to upstate New York to share his experience and make sure that New York is aware of the devastating environmental and health impacts that Dish has experienced as a result of gas drilling in the Barnett Shale.  
Regarding economic impacts, he states a job creation number that is similar to that reported by the Perryman Group.   In preparation for his visit to New York, Mayor Tillman stated “Just a couple of years ago the Barnett Shale added 10 billion dollars and 100,000 jobs to the economy for the State of Texas.”

It is not obvious that publicly available employment data from the Bureau of Labor Statistics support such a claim.   According to the Bureau of Labor Statistics, the 2009 number of employees nationwide in Oil and Gas Extraction is 161,600. It’s unlikely that 100,000 of those jobs were just recently added to the state of Texas as a result of the natural gas industry alone.

Perhaps Mayor Tillman’s impressive estimate of job creation in Texas is coming from the combination of related industries and from jobs created as a multiplier effect, or perhaps they are taken from another economic impact study conducted by the gas drilling industry.  The publicly available, unbiased employment data do not support them.  The Perryman study breaks down the jobs numbers as follows: 31,803 in pipeline development, 19,015 in Royalty and Lease Payments, and 60,314 in Exploration and Drilling, for a total of 111,131 jobs in 2008. Where do these numbers come from? They do not appear to be confirmed by publicly available jobs data and the Perryman study does not cite data sources.  Is it possible that these numbers were simply provided by the gas industry?

Even if there is a large positive economic impact in Texas, comparing Texas to New York is comparing apples to oranges for the purposes of estimating economic impacts from gas drilling.  Texas has a labor force with the requisite skill sets.  The rural counties in upstate New York would have to import the labor, who in many cases will be temporary and transient, and most of their income will be spent in their home states (probably not in New York), greatly reducing the multiplier effect in New York State relative to Texas.    In addition, Texas has a very large support industry network for oil and gas activities with all requisite machinery, equipment, etc, many of which are probably manufactured there or at least distributed and contracted for there.  Note also that the major gas companies are not headquartered in New York (for example, Chesapeake Energy is in Oklahoma City and XTO is in Fort Worth). New York would have to import most gas industry services, machinery, equipment, and management, and much of this would probably come from established businesses in other states such as Texas, so it is even possible that Texas would derive greater economic benefit from drilling in New York State than would New York.
In addition, the economy in the Barnett Shale area is more vibrant than the economies of upstate New York, as it is all in part of the Dallas-Fort Worth Metroplex.  In fact, the Perryman Study states that “prior to the emergence of the Barnett Shale, Fort Worth had established itself as one of the largest cities in the state and a major contributor to overall business prosperity.  It is also a central part of a dynamic urban region that recently exceeded six million in population.  The Barnett Shale is like ‘icing on the cake’ for an area already performing quite well.”  The counties in upstate New York where gas drilling may take place cannot be described in this way.  As noted above, multiplier effects of any industry are greater in more developed areas, such as the Dallas-Fort Worth Metroplex, having greater industrial diversity.

Finally, Texas has a much warmer climate that retirees enjoy.    This may mean that if local landowners "get rich" from natural gas in the Barnett Shale, they are more likely to stay put in their vibrant area, where they can simply buy or build a bigger house.  On the other hand, in the Marcellus Shale region in New York, it is possible that many of the local landowners who "get rich" from natural gas will move to Florida or other points south, taking their new-found wealth and spending with them, thus reducing not only property values in the Marcellus Shale region, but also local spending, possibly resulting in a negative economic impact.

It is very likely that the economic impact resulting from more gas drilling in New York State would be less than the economic impact resulting from more gas drilling in Texas.

7.  The Experience of the Western States Does Not Support the Assumption of a Positive Economic Impact for New York State

An independent study of the experience in Western states is “Fossil Fuel Extraction as a County Economic Development Strategy: Are Energy-focusing Counties Benefiting?” prepared by the firm, Headwater Economics.  It was released in September 2008.   Note that Headwater Economics is an independent non-profit firm, not supported by the gas industry or by advocates of stopping gas drilling.   This study analyzed the economic health of counties in Western states in order to compare the economies of counties that focused on fossil fuel extraction as a strategy of economic development to the economies of counties that did not focus on such industries.  The conclusions are that “while energy-focused counties race forward and then falter, the non-energy peer counties continue to grow steadily…Counties that have focused on broader development choices are better off, with higher rates of growth, more diverse economies, better-educated populations, a smaller gap between high and low income households, and more retirement and investment income.”

8.  Conclusion 

The entire Marcellus Shale region in New York may be at risk both economically and environmentally.  While the environmental risks have been a focus of concern, many stakeholders have assumed that a positive economic impact would result.  In reality, the economic impact may very well be negative.  And the likelihood is that gas drilling would adversely affect other economic activities such as tourism and sport fishing and hunting.  To some extent gas drilling and these other industries are likely to be mutually exclusive.  The net effect is what must be considered. 

It is important for decision makers in New York State to act responsibly and insist on thorough, relevant and unbiased analyses prior to making the bold and possibly inaccurate assumption that gas drilling in the Marcellus Shale will result in positive net economic benefits to New York State and its counties.

As decisions regarding gas drilling in the Marcellus Shale have potentially severe and in some cases irreversible consequences in the form of health, environmental and infrastructure degradation, it is imperative that all of the possible economic impact outcomes be fully understood.
Jannette M. Barth, Ph.D., president of J.M. Barth & Associates, Inc., an economic research and consulting firm, has worked in the fields of economic analysis and econometric modeling and forecasting for over 35 years.  She received her B.A. from Johns Hopkins University and her M.A. and Ph.D. from the University of Maryland.  Several of her former positions include Chief Economist, New York Metropolitan Transportation Authority and Consultant and Account Manager, Chase Econometrics/Interactive Data Corporation.  Dr. Barth has also taught various economics courses at both the undergraduate and graduate levels.

GASLAND THE MOVIE EXPOSES MARCELLUS SHALE DANGERS

It's a bonus when two of one's passions coincide and such is the case with my love for film eliding smoothly with my recent interest in the dangers of natural gas drilling in The Marcellus Shale. For several months now I've been plugging a friends blog ( Gracenomics ) which has published a flurry of entries warning of the ecological  nightmare that is going to be unleashed on the lower third of New York State if uncontrolled horizontal drilling for natural gas in The Marcellus Shale is permitted. Grace van Hulsteyn who publishes the blog has a place in Cochection New York, two miles from the Delaware River, one of the threatened resources and a short distance down river is the town of Milanville, home of Josh Fox, whose film, Gasland just won a special jury prize for a documentary at the Sundance Film Festival.  Mr. Fox is more of a performance artist than a film maker ( though he does have an earlier film, Memorial Day, to his credit ), but he grew alarmed about the potential damage to the delicate eco-system of the Delaware based on evidence of gas company abuses in other parts of his home state of Pennsylvania. The review from Variety that was  datelined Park City, Utah, home of Sundance, tells the story of what happened next.

I'm looking forward to the opening of this film since it will no doubt bring to the forefront the dangers of unfettered gas drilling to the water supply of New York City as well as Philadelphia and dozens of other cities and towns. Along with Gracenomics there are numerous blogs on the subject and there have been editorials in The New York Times, meetings and demonstrations in New York and Albany and all sorts of conclaves, seminars and other discussions of this problem, but all of that will fade to silence before the power of a well crafted, accurate polemic film.  No doubt the oil and gas megadons will smear Mr. Fox and offer distorted rebuttals, but so it was with SuperSize Me and eventually McDonald's had to back down and remove the offensive marketing device from its menu. From Triumph of the Will to Farenheit  9/11, the power of cinema to persuade has been proven time and  again. One can only hope that the early enthusiasm for Gasland's ability to influence opinion is warranted.

Gracenomics: We Shale Overcome, Together/2010/02/we-shale-overcome-t

Gracenomics: We Shale Overcome, Together: "this"

Gracenomics: Blog Fight: Marcellus Shale Jobs

Gracenomics: Blog Fight: Marcellus Shale Jobs

Gracenomics: And How About the Delaware, NY Times?

Gracenomics: And How About the Delaware, NY Times?

MARCELLUS SHALE BATTLE RAGES ON

The State of New York is soon to start the process of assigning leases for drilling using the highly controversial "fracking" method which involves pushing huge quantities of chemically infused water several miles beneath the earth's surface so as to break up the Devonian Era rocks that contain natural gas. The process is fraught with many dangers, from pollution to radiation. A friend whose land sits atop the vast Marcellus Shale field has started a blog commenting on the ongoing attempts to limit the number and placement of drilling sites in New York. Here is the latest entry:

Thursday, December 31, 2009
Economics and Gas Drilling in the Marcellus Shale
From the beginning of the Marcellus gas hoopla in our region, I’ve been hearing about the local benefits that drilling will bring to local communities, including my little town in the New York Catskills. Set aside for the moment the environmental issues that are getting all the press. I’m talking here about economics. Gas drilling will bring jobs, jobs, jobs, we are urged. It will bring other wealth in the form of stimulus to business activity and royalties to local landowners. We, the locals, will enjoy the benefits of the cleanest form of fossil energy, even while we’ll be doing our part to free the U.S. from dependency on foreign oil. These are the reasons we should bow to the wisdom of our state governments and welcome out-of-state developers to dig for gas in our hills and valleys.

None of these “benefits”seem to me to pan out, at least not at the end of the day. Here’s my take on them, below. If you disagree, I invite you to refute what I say, but with facts, please, not rhetoric. And that's not just rhetoric on my part;I really do want to receive some feedback from both sides of the gas drilling debate.

Jobs: Start with on-site jobs. The best of the jobs, I’ve been informed, come along with the gas operators. These are professional and management posts, and the rig jobs that are filled by highly paid itinerant workers. No kidding, these rig operators pull down some $75,000 a year and up. Do these jobs figure into the impressive Pennsylvania statistics that we’ve seen, for example, on gas play job growth? They shouldn’t. These workers are residents of other states whose local jobs will end and who are not likely to stay or to invest their riches locally. We’re told that the well drilling and fracking processes will be completed in a matter of weeks or a few months, so that rig workers, and presumably the managers, professionals, foremen, et al, will at that point move on. What seems to be in the offing for locals in the way of industry jobs are truck driving, security, and some low-level office work

Non-industry jobs and business development: Yes, the workers will need to be housed and fed as long as they are around, so there will be new staffing at delis, restaurants, bars, and real estate agencies. For how long? Weeks? I’m hearing the sound of a quickee boom, and then a bust. Gravel quarries will do well in the longer haul. But what the yea-sayers are leaving out is that much of the other work that will generated by the gas play will be in the nature of policing, social services and cleanup. And that will need to be funded, not by the gas companies or out of gas income, but by the same strapped taxpayers who will not have benefitted from the gas play in any way, including those whose real estate values have plummeted through proximity to it.

Landowners: Those who have entered into well-negotiated leases will certainly come out ahead economically. Even many of them may be unsettled to learn of the extent to which their lives and their land will be disrupted, but they will probably be rewarded in due proportion to the harm that comes their way. That is, a protracted disruption will be due to high production which will also produce substantial royalty payments. So, the more damage is done, the more likely it is that they will move away, leaving their property desolated and taking their disposable income with them.

Clean energy: Many reporters have noted the distinction between the environmental effects of the harvesting process and those of the use of gas as a heating fuel: the former is very dirty; the latter is clean as fossil fuels go. The people in the Marcellus will be getting the dirty. Many will not get the clean, as there is no natural gas service throughout large rural reaches of the region.

Patriotism: Finally, there’s the What’s Good for the Country is Good for You argument. “Our” gas will be used in the U.S.and help to wean our country from reliance on wicked oil suppliers in the Middle East. Nonsense, I say. We’re not geared to keeping the gas here for future use, and have nowhere to put it all. I’m certain that much of Pennsylvania’s gas is already destined, if it has not been delivered, to overseas markets. Who is it that controls where the volumes pumped out of the Marcellus via the massive pipelines, such as the newly expanded Millennium, will go? It’s the gas companies, including the foreign entities like Statoil that hold substantial interests in them, who will decide. It won’t be Uncle Sam.


So, if these arguments are supposed to be delivering the good news on gas drilling, they’re lost on me.

Marcellus Shale Letter

The following letter was sent by a friend to the President of Chesapeake Energy, one of the major players in the Marcellus Shale natural gas sludge rush. It appears on the same day that New York Mayor Bloomberg issued a report calling the potential damage to the New York's water supply a disaster waiting to happen. But not only is New York threatened, but as the letter points out, the beautiful Delaware River, which supplies Philadelphia with most of its drinking water, also lies in the path of polluted run-off from the method of drilling used to extract gas from far beneath the surface.

Wednesday, December 23, 2009
Letter To Chesapeake Energy Re: Marcellus Shale
Welcome to Gracenomics. I'm opening with the theme of drilling in New York's and Pennsylvania's gas-rich Marcellus Shale. Recently, one of the major industry players, Chesapeake Energy, announced that it would not be doing any development within the New York City watershed, although it is the sole gas leaseholder of properties there. The announcement was taken by many city dwellers as an admission that hydrofracking poses a danger to drinking water. Today, Mayor Bloomberg joined the rising throngs opposing its use. I give grudging credit to Chesapeake for helping to bring that about.

Mayor Nutter of Philadelphia and other mayors should be urged to oppose fracking wherever their communities' water supply may be at risk. Here's what I wrote to Chesapeake's CEO last week:


"December 11, 2009

Mr. Aubrey McClendon
Chesapeake Energy Corporation
Post Office Box 18496
Oklahoma City, Oklahoma 73154-0496

Dear Mr. McClendon:

As a part-time resident of New York City, I was very happy to learn that Chesapeake Energy voluntarily decided not to drill for natural gas in the City’s watershed, owing to concerns about water contamination. As you know, you are several steps greener than our Department of Environmental Conservation in that regard.

I am also a part-time resident of Sullivan County, New York, below the watershed but less than two miles, as the bird flies and the water flows, from the Upper Delaware River. Next door to me is a hunting parcel that has been leased to Chesapeake-Appalachia LLC, which I take to be a wholly-owned Chesapeake Energy subsidiary. Most of the groundwater on the particular parcel flows across and under mine, as it does those of my lateral neighbors, and, during seasonal flooding, it gushes without any filtration into the Delaware. I have personally tracked it doing so. I surmise that the same can be said of the water on and under virtually any property in this hilly, wet region that is within a few short miles of the river on either side.

I am concerned, of course, for my own water well in the event that natural gas drilling takes place next to me. But the river itself provides drinking water, I’m told, to some 18 million people, even more than the New York watershed does. Philadelphia is just now waking up to the possibility of contamination from gas drilling. You would win millions more fans if you would make the same pledge to them that you made to Gotham.

The Delaware, of course, is vital not only as a drinking water source but as a federally designated Wild and Scenic River and a recreational resource. I would like to propose a protection zone from drilling of three to five miles from the river’s edge, and hope you would find such a gesture appealing and worthwhile. Wishing you success in your commercial ventures and your pro-environment initiatives, I am

Sincerely yours,"
Posted by Grace at 10:59 AM

Marcellus Shale Letters

I received the following two letters from a friend who has a summer home in New York's Catskill mountains. Her property sits atop The Marcellus Shale, a huge Devonian geologic formation that contains ( potentially ) billions of cubic feet of natural gas. To extract the gas from the rock formation they most be "fraced"(hydraulic fracturing ) using water injected at high pressure. Naturally there are formidable environmental consequences to the use of this process. Local, State and Federal government agencies charged with regulating such activity have been quite hesitant to impose proper controls because of the huge amount of taxes that would flow to their coffers. They use the excuse that extracting this gas will go a long way to making the U.S. energy independent. Aside from the dubious truth of this statement, the price paid would be the moon-scaping of large parts of New York, Pennsylvania and many other states the contain The Marcellus Shale.
Also, many individual property owners are not raising their voices because they have sold leases for their property to be fraced and stand to gain considerable royalties if gas is found. But the problem goes far beyond the immediate areas atop the shale. The vast amounts of water to be used in eastern New York, for example, will overflow into the Delaware River, the major source of water for the Philadelphia metro area and a signficant part of New York City. The chemicals used in the fracing process would then flow in into river, making the water untreatable for potability. Here are the letters, which contain further information about what I've termed, The Quiet Disaster.


From: gracewildhack@yahoo.com
Subject: Fw: Regulation gone wrong: the DEC on gas drilling
Date: April 24, 2009 2:26:22 PM EDT
To: rudy@posterappraisal.com






----- Forwarded Message ----
From: grace van hulsteyn
To: editor@riverreporter.com
Sent: Friday, April 24, 2009 12:13:51 PM
Subject: Regulation gone wrong: the DEC on gas drilling


Dear Editor: I am a retired attorney with a home in the
Catskills. The letter below was mailed Tuesday to the named officials
of New York's Department of Environmental Conservation, concerning what
I believe to be its corrupted stance on proposed natural gas drilling
in the Marcellus Shale. Below the letter is an earlier letter dated
September 22, 2008, which is referenced therein, and which sets forth
the legal basis of my complaint. If you have questions, please e-mail
me.

--------------------------------------------------------------------------------------------------------------------
Grace van Hulsteyn
364 New Turnpike Road
Cochecton, New York 12726

April 21, 2009
Alexander Grannis, Commissioner
Jack Dahl, Oil & Gas Bureau Chief
NYS Department of Environmental Conservation
625 Broadway
Albany, New York 12233

Dear Messrs. Grannis and Dahl:


I wrote to you last September, reproaching the Department for its
support and encouragement of the Marcellus gas play, contrary to its
statutory mandate and despite the environmental dangers posed by
high-volume hydrofracturing. If you have forgotten my letter, I am
enclosing a copy. I note that the misstated purpose clause in the
NYCRR that I drew to your attention still stands uncorrected after
seven months. .Your sole response to my letter was by way of a flyer
directing my attention to the first draft scope for the supplemental
GEIS that the Governor had ordered. I read it and submitted my
critical comments.

Now that you have heard from many
hundreds of articulate citizens who have voiced their fears for their
families’ health and safety, their land, their livelihoods, their homes
and their communities, – those things it is your statutory mandate to
protect – it is even more troubling that the “final scope” of the
scope adheres to the same “don’t worry, be happy” theme.

It
would have been heartening to read, in Part 7, that you plan to review
such alternative courses of action as phasing in gas development and
even banning it, had you not in the preceding Parts reiterated your
stubborn conviction that the process is essentially benign and that
your procedures will prevent all harm from occurring. That tells us
you will not be doing any serious rethinking unless and until something
confounding or apocalyptic happens. In the meantime, the new scope
still offers no protection to private water wells, the predominant
drinking water sources in the region, and it perpetuates the wishful
fiction that “the practice ( of casing and cementing) eliminates the
possibility of ...contaminants contacting ground water”. As you
surely know by now, geologists who recently examined several newly
contaminated water wells near a Cabot exploration at Dimock,
Pennsylvania, have had to conclude otherwise. And what happened at
Dimock was already prefigured by numerous contaminations in Colorado
and other states. The Pennsylvania geologists are still scratching
their heads as to how that methane could have migrated. You should be
scratching yours, and returning to the drawing board. Please, let us
not wait for an apocalypse.

At times when the Department has
chosen to, it has acted as a serious, science-minded defender of the
environment. Recently, the subject was the NYRI power line. In
January more than a dozen DEC biologists and other specialists took the
time to appear and give testimony before the Public Service Commission
on the impacts of the proposed line upon surface water, wetlands,
wildlife, and the environmental quality of the region. They expressed
their concerns about forest fragmentation (Mr Rudge), trout stream
disturbance (Mr. Ferracane), erosion and water turbidity (Mr. Eaton),
and more. Power lines are ugly; they hum, they divide the landscape,
they reduce property values, they may have health impacts. Next to
the gas play, however, NYRI is an environmental piker. Its power line
would not foul the air, divert precious water supplies, or crisscross
the landscape with truck trails and pipelines. It would not create toxic waste, or contaminatewells (or soil or surface water), or bang the eardrum 24/7. Now that
we are faced with these far greater environmental challenges, we’re
being told that we, the water, and the forests will be fine and that
micro-management by the Department will protect us.

These
positions on NYRI and the gas play are irreconcilable. If a power line
will fragment the forests and threaten wildlife habitat, why won’t
active 2- to 10-acre wellpads do so, especially at an allowable density
of 16 per square mile? If power lines will endanger trout streams,
won’t humongous water draws do so? And migrating methane? And toxic
wastes which, under current federal and New York law, are exempt from
treatment as hazardous wastes? What is to be gained by protecting the
environment from one kind of developer like NYRI and then delivering
it into the hands of another, like Cabot? For that matter, what is
the point of SEQRA and of environmental review powers at any
governmental level if environments that have been saved by them may
now be trampled by Big Gas?

The ECL is not to blame
for this disconnect, as the legislature made abundantly clear when it
amended the Declaration of Policy for oil and gas in 1987. Nothing in
the law contemplates that standards of environmental protection which
the Department knows to be appropriate may be downgraded on the basis
of a cost-benefit analysis or a national energy shortage. Those
concerns are appropriate to the State Treasury and the Energy
Department, but they are not the bodies charged with the management of
the gas play. You are. Because the Department is the lead agency in
the permitting process, it is obligated under the law to adopt the same
defensive posture in the gas play that it has shown in other
situations, and in due proportion to the many-faceted risks that it
presents.

Properly, permits for high-volume hydraulic
fracturing as now contemplated should be off the table until science
and experience can demonstrate that the process is safe for the
environment and human health. If the Department cannot wait for that,
then it must grasp the reins and direct the development itself. This
will mean adopting the phased-in permitting approach which you have
said you will consider. You will win back some lost respect and be
off to a good start if you limit initial exploration to sites that are
substantially distant from habitations and water sources. If you do
that, then you and the rest of us will be better able to assess the
true scope of the risks in advance of serious impacts. I don’t know
who could legitimately quarrel with that approach.

Sincerely,



cc: Congressman Maurice Hinchey
Senator John Bonacic
Senator Charles Schumer
Attorney General Andrew Cuomo
Assemblywoman Aileen Gunther
Councilman James Gennaro

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------

Grace van Hulsteyn
364 New Turnpike Road
Cochecton, New York 12726


September 22, 2008

Alexander Grannis, Commissioner
NYS Department of Environmental Conservation
625 Broadway
Albany, New York 12233
Re: DEC role in gas drilling
Dear Commissioner Grannis:


I am a retired attorney and the owner of an improved five-acre parcel
in Cochecton, New York. Like many people of this Catskill region, I
have grave concerns about the potential impact upon life and health
posed by the advent of natural gas drilling. Like them, I have heard
and seen many consistent reports from areas near drilling sites in the
West where the same state-of-the-art fracture techniques expected to be
used here, inclusive of noxious chemical agents, have been used. The
reports detail the despoliation of the landscape, toxicity in the
water, foul air, an uncommonly high incidence of illness and damage to
bodily organs, and round-the-clock clangor and tumult. We demand more
than lip-service assurances that the same will not happen here, and the
DEC is apparently the sole body to which we can turn.

What
distresses me most is the position the DEC has openly taken on the gas
issue. Notwithstanding the careful language on its website, Director
Brad Field has plainly stated at a number of meetings that the
Department’s mandate under the Environmental Conservation Law (“ECL”)
is maximizing the recovery of gas. That this is genuinely the
Department’s position is borne out by its sponsorship of the 2008
amendment to the ECL which includes gas-friendly provisions directed at
eliminating untappable zones between spacing units, even while they
bring wellheads and wellbores closer to homes outside the spacing units
than was previously permissible. In furtherance of what I submit is
its mistaken mandate to assist development, the DEC apparently stands
ready to begin issuing drilling permits in the coming months, without
having put our concerns to rest. This will be a travesty, as well as a
breach of the public trust, as the DEC is the
appointed
trustee of the state’s environment under the ECL and its actual mandate is something completely different.


For whatever reason, the current Code of Rules and Regulations, to
which the Department looks to interpret the ECL for regulatory
purposes, continues to show the Department’s principal oil and gas
objective to be “the fostering, encouragement and promotion of the
development... of oil and gas in such a manner as will prevent waste.”
(6 NYCRR §550.1). This language cannot Alexander Grannis, P. 2

serve
as support for any development-oriented mandate because in 1987 the
legislature deleted it from its source, the first clause of the
Declaration of Policy at Section 23-0301 of the ECL, and substituted
the word “regulate” for “foster, encourage and promote”, See Laws of
1987, chapter 396. In the same chapter it transferred the language
“foster, encourage and promote” to the Energy Law.

It is
important that the mandates of the DEC and the State Energy Department
not be confused. The DEC’s role is to serve as a check on
development. Its powers under the ECL to issue permits, designate
spacing units and oversee the gas extraction process are to be
exercised not to make development efficient but to carry out the
agency’s true mandate, set out in Title 1 of the ECL: “ to conserve,
improve and protect [the State’s] natural resources and environment
and control water, land and air pollution in order to enhance the
health, safety and welfare of the people of the state and their overall
economic and social well being” and the other goals expressed in that
Title.

Title 1 applies to each and every Article of the ECL;
hence, the language of §23-0301 setting the policy for oil and gas,
must itself be read in such a manner as to be reconcilable with Title
1. It is thus error to read the second clause of §23-0301 as calling
for any encouragement or enhancement of gas extraction at all, much
less where the rights of the parties that the Department is bound by
the same clause to fully protect are placed at risk. I submit that the
wording “to authorize and provide for the operation and development of
oil and gas properties in such a manner that a greater ultimate
recovery of oil and gas may be had” merely carries forth the concern
about waste that is expressed in the first clause. The word “ultimate”
is key. The definitions of waste set forth in §23-0101.include
improper “locating, spacing, drilling, equipping, operating or
producing” which reduce or tend to reduce the quantity of oil or
gas that is
“ ultimately recoverable”. Gas is wasted where, in the extraction
process, it is allowed to escape into places from which it can never be
harvested. Gas left imprisoned in the shale remains conserved and
ultimately recoverable. That its recovery at a later time might not be
economical is not the statute’s concern, and it is not a proper concern
of the DEC.

The obvious point of the above is that the
DEC should be reordering its priorities. It should be contemplating
this gas rush defensively and with utmost caution, not enabling it at
risk to the environment and the people. This is so not only because
the Department’s current stance contravenes its proper mandate under
the ECL but because the Department is clearly unprepared for an
onslaught of the anticipated magnitude of this one and the potential
harm it poses. Our citizens cannot accept “learn as you go” regulation
where people get sick during the learning process, nor will the
Department be forgiven if the beautiful Catskills are traded off for
the value of the gas underneath them. We are not persuaded that a tiny
force of 19 inspectors statewide will be capable of effectively
monitoring tens of thousands of present and future wells so as to
prevent local disasters and keep our water and air clean.

I
am urging you on behalf of all the people whose health, safety and
well-being may be in your hands, to hold off on issuance of permits
for any drilling employing the techniques and Alexander Grannis, p. 3


materials
which gave rise to the environmental and health complaints reported in
the West, until such time as the hazards have been scientifically
eliminated and effective enforcement is in place to assure compliance
by the gas companies. Nothing less than that will do.

Sincerely,


cc: Senator Charles Schumer
Senator Hillary Clinton
Representative Jerrold Nadler
Representative Maurice Hinchey
Senator John Bonacic
Assemblywoman Aileen Gunther
Jack Dahl , Bureau Chief, Oil & Gas