Jim Tankersley of the Los Angeles Times reports - “The federal government has “significant gaps” in its strategy to cope with the increasing effects of climate change on the country, according to a White House report scheduled to be released Tuesday.

The report will call for better risk assessments, more thorough scientific research and improved coordination of federal and local governments in order to handle the effects of warming temperatures, according to a draft of the report.”

To read the rest of the story click here.

David Copley a petroleum geologist provides the following op-ed in in the Buffalo News.

“It’s impossible to overestimate the importance of natural gas production in the Marcellus Shale that underlies large parts of New York State and Pennsylvania.

Notwithstanding exaggerated fears of damage to ground water systems, the ramp-up in shale-gas production has been the best economic and environmental news in years. Thanks to the use of new drilling techniques combined with a decades-old process known as hydraulic fracturing, energy companies are now able to access deposits of shale gas that were considered out of reach a few years ago.

Until 2007, the story of natural gas production in the United States was one of decline. With gas supplies tight as a drum and domestic production unable to meet growing demand for the clean-burning fuel, plans were under way for dozens of liquefied natural gas terminals to handle imports from overseas.

Today domestic gas production is increasing, and shale gas accounts for 40 percent of the supply. Shale gas provides a significant boost for the economy, with thousands of new jobs, tax revenue for state and local governments, and income for property owners.”

To read the rest of the story click here.

Clean flowback water and new jobs are what is being produced in the AOP Clearwater water treatment plant that opened last November in Fairmont, West Virginia. They are using a distillation-crystallization process that cleans the brine from the flowback water and allows it to be used for further fracking jobs. The brine is then reused to treat winter roads. Trucks bring in full loads of frackwater, empty in 11 minutes then fill back up with clean water for another frack job in the same amount of time. Sixteen new jobs were created at this site. Regulators in West Virginia require producers to report the source, treatment and disposal of frack water and the plant is complying with the regulations.

One of the major arguments against drilling in New York is the issue of disposal of flowback water. The process is working in West Virginia and it would in New York as well. When the DEC finalizes the drilling regulations, I hope to see investment and development of similar water treatment facilities in New York State. Proven technology to treat flowback water is being utilized in West Virginia and the benefits are clean water, jobs and economic development. New York needs to embrace development of the Marcellus Shale and the many related business opportunities instead of continually erecting roadblocks to development.

The Business Council opposes this Executive Budget proposal that would deny remediation and development tax credits for projects which have been admitted into the Brownfield Cleanup Program before June 23, 2008, but have not yet received a certificate of completion. Adoption of this bill will endanger over $20 billion of cleanups and development in the state, will likely involve the state in protracted and expensive legal action at the federal level, and will violate the state’s pledge to honor its commitments.

The adoption of tax credit caps in 2008 (Chapter 390 of the laws of 2008) expressly grandfathered projects that had been admitted into the Brownfield Cleanup Program prior to the adoption date. Approximately 100 projects, two-thirds of which are upstate, were thus protected from losing benefits previously promised by New York State. This bill would retroactively apply the credit caps and new credit determination standards to these projects.

To read the detailed bill memo click here.

Comptroller Wins Battle as SEC Rejects Cabot Bid to Block Shareholder Vote

In a press release issued Thursday March 4 2010:

“New York State Comptroller Thomas P. DiNapoli today said the $129.4 billion New York State Common Retirement Fund (Fund) will continue to press energy companies to disclose to their shareholders the environmental and regulatory risks associated with unconventional natural gas extraction including hydraulic fracturing.

“Natural gas stores locked in dense shale formations like the Marcellus Shale in New York are an important source of energy, but there are reasonable concerns about the environmental impact and potential liabilities inherent in its development,” DiNapoli said. “Investors need to have quality information so they may weigh the risks and rewards of the companies they invest in. The development of the Marcellus and other shale gas plays must be done the right way. As shareholders, we want these companies to assure us that they have a full and complete appreciation of the liability risk, and that they’re taking steps to mitigate those risks.”

DiNapoli, as trustee of the Fund, has filed resolutions with five companies – Chesapeake Energy Corp., XTO Energy Inc., Range Resources Corp., Hess Corp., and Cabot Oil & Gas Corp. The resolutions request company boards to summarize for shareholders: the environmental impact of their unconventional natural gas operations; potential policies for the company to adopt, above and beyond regulatory requirements, to reduce or eliminate hazards to air, water, and soil quality from operations including those from hydraulic fracturing; and, other information regarding the scale, likelihood, or impacts of potential material risks, short or long term, to the company’s finances or operations, due to environmental concerns regarding fracturing.

One of the companies, Cabot Gas & Oil, attempted to block the resolution from a shareholder vote. DiNapoli prevailed when the Securities and Exchange Commission in late January issued a letter disagreeing with Cabot that the company had legal grounds to keep the resolution off the shareholder ballot at its annual meeting this spring.”

This raises some very interesting questions. 1. Is this standard practice for the Comptroller? If the fund holds stock in Coca Cola, does he ask Coke to “summarize for shareholders” the health impact of the product? We all know it rots our teeth and makes us fat. 2. The Comptroller is not an environmental regulator. The DEC is best equipped to monitor and regulate energy companies. 3. If the Comptroller has such misgivings about these energy companies or any other stock in the pension fund he should sell the stock.

The energy companies that wish to do business in New York already apply best practices and operate with great care. Requiring them to meet additional requests seems redundant and unnecessary. I don’t know if other states make the same demands on energy companies doing business in their states but I would guess not. New York seems to go out of its way to make it as difficult as possible to do business in the state. We should be encouraging the energy companies to do business in New York under the DEC’s proposed comprehensive regulatory safeguards, not presenting them with another business obstacle.

Last week it was reported on the Dow Jones Newswires by Ian Talley that the states are doing a good job of regulating hydraulic fracturing. Steve Heare, Director of EPA’s Drinking Water Protection Division, stated that “I have no information that states aren’t doing a good job already.” Heare also stated that despite claims by environmental organizations, he hadn’t seen any documented cases that the hydrofracking process was contaminating water supplies.

Legislation was introduced last year that would bring hydraulic fracturing regulation under EPA jurisdiction but according to Mr. Heare this is unnecessary. The states are best equipped to regulate fracking and have the track record to prove it. The New York DEC is currently working on final drilling regulations which will make the existing regulations even stronger. When the House Energy and Commerce Committee holds hearings on hydraulic fracturing as part of their investigation I hope that Mr. Heare is asked to provide testimony. Instead of inciting fear like many of the environmental groups opposed to drilling, Mr. Heare, as head of the EPA’s Drinking Water Protection Division, can provide credible, fact-based evidence that there is no link between hydraulic fracturing and drinking well contamination.

The Business Council provided these comments to DEC for consideration in the Department’s efforts to revise the NOx RACT emissions standards.

It is essential that New York’s rule be fair and not put in-state industry at a competitive disadvantage.

Specifically, we recommend that the Department recognize that other clean air programs such as the Clean Air Interstate Rule (CAIR) and the New York Acid Deposition Reduction Program (ADRP) are already reducing NOx, lessening the need for additional expensive control technology. Many of the affected parties to this proposed rule have already installed control equipment to reduce ozone and NOx.

We recommend that the Department exclude boilers with heat capacities as low as 25 million Btu per hour from the definition of a “mid size boiler.” Lowering the threshold will subject these smaller boilers to costly modifications without any significant environmental benefit.

We recommend that the Department not codify specific dates for the submission of NOx analyses and the installation of approved control equipment. Any required NOx analysis should be submitted to the Department in a reasonable time-frame following adoption of a final NOx rule and any approved emissions reduction methods should be installed as “expeditiously as possible” after approval of the State Implementation Plan (SIP).

To read the complete list of comments provide to DEC click here.

Juliet Eilperin of the Washington Post writes - “Environmental Protection Agency Administrator Lisa P. Jackson laid out the timetable for regulating greenhouse gas emissions Monday, writing in a letter to lawmakers that she plans to start targeting large facilities such as power plants next year but won’t target small emitters before 2016.

The letter makes it clear the Obama administration will move ahead with curbing global warming pollution under the Clean Air Act unless Congress moves to stop it. Jackson emphasized that the administration was required to act under a 2007 Supreme Court decision that said greenhouse gases from motor vehicles qualified as a pollutant under the 40-year-old air-quality law. Jackson was responding to a letter several coal-state senators sent her late Friday.”

To read more click here.

Tom Wilber writes on Pressconnects.com - “Hess Corp., once a major prospect for natural gas development in Broome County, has set its sights south of the New York and Pennsylvania border.

The multinational energy company, working with Newfield Exploration, will likely begin drilling later this year on 87,000 acres in Wayne and Susquehanna counties, according to landowners and company officials.

Hess and Newfield are part of a broad prospecting rush to the Marcellus Shale, the mega natural gas reserve extending under the Appalachian range and southern New York. Pennsylvania state officials are expecting 5,200 new permits to drill in the Marcellus Shale this year — nearly three times the number of permits issued in all of 2009, according to information from the state Department of Environmental Protection.”

To read more click here.

One of the major points of criticism of the DEC’s draft sGEIS is that New York State does not currently have the water treatment facilities in place to handle the volume of flowback water expected from the hydrofracking process. This is true enough. Even taking into account the expected use of recycled water from one well to the next, existing treatment facilities cannot handle the volume or composition of the flowback water. New facilities will be necessary. While the opposition views the lack of facilities as a roadblock, others see opportunity and jobs…good jobs in construction, engineering, management and maintenance.

The sGEIS is criticized for not having treatment options but what investor would move forward on a project in such an uncertain regulatory climate? We don’t know when or if permitting and drilling will ever happen in New York State so how can we expect businesses to invest in multi-million dollar water treatment projects. Exxon-Mobil included a clause in their land lease deal in New York that gave them an out if the final regulations are business adverse. Other investors are being cautious as well. Investors are waiting for a green light from the DEC in order to proceed but the DEC can’t identify treatment facilities so the opposition is claiming that New York State is not ready to handle the drilling. A catch-22.

New York needs jobs and investment not further study and more review of a process that has been proven safe across the United States for decades. We need to take down the regulatory roadblocks and encourage investment in all aspects of Marcellus Shale development, including water treatment, so that we can begin to experience the economic benefits that safe, clean and responsible development can bring.