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Democrats Make Hydraulic Fracturing a Political Football

severance tax - MarkindDaniel B. Markind, Esq.
Weir and Partners, LLP

 

As democratic presidential candidates argue over hydraulic fracturing, Cuomo appears to be stalling on approving permits the Constitution Pipeline needs.

With the presidential primaries now in the Northeast, the two Democratic Presidential candidates are competing for who is more opposed to fracking.  In a very short period of time, the entire concept of hydraulic fracturing has become a political football.  It will be interesting to see how far Hillary Clinton and Bernie Sanders take this antipathy as hydraulic fracturing is used for more than just shale gas and oil production. Indeed certain “cleantech” source like geothermal energy use techniques similar to hydraulic fracturing.

hydraulic fracturing

Given the timing and the current political atmosphere, expect New York Governor Andrew Cuomo to find a reason not to approve the 401 Clean Streams Permit needed to move forward the Constitution Pipeline. Cuomo has until April 29 to make a decision. While a refusal certainly will lead to litigation, it will be politically very difficult now in New York for the Governor to be seen taking a position facilitating the transportation and use of fossil fuels.

One of the owners of the Constitution Pipeline, Cabot Oil & Gas Corp., is battling on another front.  Cabot is appealing a verdict awarded March 11 in the Federal District Court in Scranton granting two landowners in Dimock, Pennsylvania $4.2 million relating to methane contamination the plaintiffs claimed were caused by negligent well drilling by Cabot near their land.  The entire affair was very curious.  Numerous causes of action claimed by the plaintiffs were thrown out by Judge Martin Carlson, leaving the plaintiffs only with a generalized “private nuisance” claim.

During her closing argument, plaintiffs’ attorney Leslie Lewis made numerous references to evidence that had been excluded by Judge Carlson and implied that Cabot was “hiding something”.  Even Judge Carlson interrupted Ms. Lewis three times during the closing argument and scolded her for making improper statements.  Still, the verdict came down from the jury of four men and four women after 8 ½ hours of deliberation, and it has been seized upon by the anti-fracking groups as a great victory for the little guy over the big, bad gas company.

hydraulic fracturing

In Pennsylvania earlier this week, Energy Committees from both houses of the State Legislature voted to disapprove new rules governing gas and oil development promulgated by the Department of Environmental Protection.  These Chapter 78 changes have been discussed many times here.

While some are common sense, other lack sense, and the entire process has been shady.  Under Pennsylvania’s rule making methodology, the proposed regulations now go to the State’s Independent Regulatory Review Commission on April 21.  In the end, the only way the rules will not come into effect (aside from a legal challenge) will be for both houses of the Legislature to override a veto by Governor Tom Wolf. This is highly unlikely.

Internationally, the oddity of the Israeli Gas Consortium continues.  On March 28 the Israeli High Court of Justice blocked the deal between Houston’s Noble Energy and Israel’s Delek to develop the Leviathan and Tamar gas fields in the Mediterranean.  The Court found that the Prime Minister had no ability to agree to a “stability” clause, which prevents future governments from changing any regulations for a decade.  Noble Energy CEO David Stover  responded by stating that Noble “will vigorously defend our rights…It is now up to the Government of Israel to deliver a solution which at least meets the terms of the framework, and to do so quickly.”

On a better note internationally, INEOS Europe AG and Rex Energy announced a new natural gas liquids sales and purchase agreement for ethane, propane and butane. Ethane will be transported immediately while propane and butane will start upon the completion of Mariner East 2, assuming that the powers-that-be allow Mariner 2 to be completed.  It then would be transported by ship from Marcus Hook, Pennsylvania to refineries in Norway, relieving Europe of some of the monopoly power of Russia.

hydraulic fracturing

Right now, 8 of 28 EU countries rely on Russia for as much as 80% of their natural gas. Given Russia’s increasingly aggressive moves toward the United States, as exemplified by Tuesday’s simulated strafing run of an American warship in the Baltic Sea by Russian Sukhoi SU-24 warplanes, it is difficult to see how helping Russia retain its monopoly on Europe’s energy is in anyone’s best interest.

Editor’s Note: I wish Dan’s prediction about the Constitution Pipeline was over-the-top and improbable but, given the delay to date and Williams’ apparent unwillingness, until now at least, to fight, while naively trusting in the good will of a politicized DEC unable to make decisions without the approval of a corrupt governor, I fear he’s correct. Let’s hope he’s wrong. If not, then Williams (and pretty much every pipeline company) needs to change their strategy and get in the game fractivists are playing.  

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6 thoughts on “Democrats Make Hydraulic Fracturing a Political Football

  1. Another dumbucrat as our president following Obama will certainly be the nail in the coffin for rights of the free here in the United States. Not all democrats are equal but they will be if they don’t cross party lines and ignore the truth about the choices they have before them. Bernie “King of the Pan-Handlers or Hillary, a lying murdering above the law idiot who promotes the degradation of woman by embracing EXTREM ISLAMIC TERROIST as immigrants to the United States

    • I hope you feel better after your little rant, but how did it add a single person to our cause. Invented right wing vocabulary, name-calling and misspelled ALL CAPS are worse than useless, they drive people away.

      This is an economic problem, not just an ideological one. Assume, as do the people we need to support natural gas development, that climate change is real and that solar and wind energy are way behind schedule. Can you formulate a plan where Marcellus and Utica gas are a “bridge” fuel for the next 25 years, increase employment and lower property and school taxes. I can, but I also know that predicting anything more than a few years out is a guessing game at best.

      The anti’s fight to delay us because they know if natural gas development gets in place before utility scale wind and solar, renewables will be further delayed and diminished. It works the other way if they can build green tech first. Perhaps the pipeline companies are too used to their old ways of doing business to see that the ground is shifting beneath their feet.

      There is a quote from the old Calvin and Hobbes comic strip that applies to most politicians: “Reality continues to ruin my life”. Some, like Sanders and Cuomo, may want to be a purer green to advance their political careers, but reality beats ideology every time. In Cuomo’s proposed Clean Energy Standard, he has had to create a third tier of green energy, nuclear, using the rationale that it produces no green house gases. The anti’s were outraged, but the governor just papers over the gaps in an already flawed plan.

      http://documents.dps.ny.gov/public/MatterManagement/CaseMaster.aspx?MatterCaseNo=15-e-0302

      “The State’s largest zero-emission source of electricity is currently nuclear power plants. In 2014, nuclear generation accounted for approximately 30% of New York’s consumed electricity. New York’s nuclear power generating stations have produced on average over 46,000 GWh of emission-free power per year over the past five years.”

      “Over the past several years, New York’s consumers have benefited from low natural gas prices, helping to lower both retail electric and gas utility bills. … However, nuclear generation stations in upstate New York now find themselves facing challenging market conditions.”
      (NYS DPS Clean Energy Standard, Jan. 25, 2016, pp. 27-28)

      If you can’t use something like the above to further natural gas, you aren’t trying.

      • Mark: very thoughtful comments. We do not need to sink to the levels of the radical activist. You sound like a Kasich Thoughtful Republican. But alas, science and common sense

  2. http://www.businesswire.com/news/home/20160414005458/en/Williams-Partners-Announces-FERC-Approval-Transco’s-Garden

    That is an interesting hypothesis about cuomo but it appears to ignore that the 401 permit is purportedly with the DEC and not Cuomo. It also seems to assume something which seems problematic to me that a governor of any political party could use an agency or agencies for political means. Doesn’t seem proper to me.

    I don’t see any indication in another Williams docket also in NY state that NY state agencies or Cuomo for that matter are against the transportation and use of natural gas. As a matter of fact that docket is also remarkably free of antifracking intervening groups like the ones in Constitution docket as well.

    Instead of acting like somehow it would be politically advantageous for Cuomo to deny the 401 permit which I can’t see at all nor do I see how it in any way is his call maybe people should be asking why the DEC hasn’t given the permit yet and why it might be taking them so long to issue the permit. I get the feeling there is a problem with that agency which by the way also made the call on fracking at least on paper along with the DOH.

  3. The main problem with the Constitution Pipeline is that Cabot and Williams chose a greenfield route across the tops of the mountains where it crosses the headwaters of around 270 brooks and streams. The EIS never explains the selection of this route rather than a more logical non-greenfield route along the I88 Corridor. The rights-of-way are cheaper? The landowners less able to fight eminent domain? That route crosses potential areas for fracking? Further from the local cities so less bother about providing natural local gas to local markets? Certainly, it’s not because of less environmental impacts, since how could a greenfield route cause less negative environmental impact than a non-greenfield route?

    • The main problem with the opposition to the Constitution Pipeline is that the anti’s will use any excuse to delay natural gas development. A pipeline connects gas to customers and once they start using gas, it lessens the demand for solar and wind. It will also make renewables less attractive to utility scale renewables if gas is cheaper and readily available.

      All those precious streams are run through culverts and bridges at lower elevations, but that seems fine with the anti’s. A trickle that dries up in the summer on the top of a ridge; that’s another story apparently. I-88 is much closer to several towns, like Oneonta, NY, and the anti’s would peddle their fear mongering even harder if the pipeline were closer.

      “Taps” on the main pipeline have already been proposed and extending a feeder line an extra mile or two to a town or village or string of them would be a minor expense. The benefits to businesses like Amphenol or Mead in Sidney, NY, or anyone who uses imported fuel oil would be substantial.

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