The People of America's Oil and Natural Gas Indusry

A New Chill on New York Energy Development

Mark Green

Mark Green
Posted July 1, 2014

Oh, New York. As if your six-year-old moratorium on hydraulic fracturing – an unforced error that’s costing thousands of jobs and dynamic growth – isn’t bad enough for your economy, now there’s a court ruling extending the opportunity for dubious policymaking to the local level, potentially impacting state residents who can least afford it.

This week’s decision by the state Court of Appeals, that towns and municipalities may ban hydraulic fracturing within their borders, looms as a new frustrating turn for landowners. Especially those in the Southern Tier, an economically starved belt of counties along the Pennsylvania border.  

It’s hard to see how energy development – that could save family farms, provide good career paths for the region’s young people and boost the regional economy – wouldn’t be chilled by the prospect of a string of localized bans. For New York property owners, the ruling could mean that economic development will continue to be something that happens in Pennsylvania, not at home. Karen Moreau, executive director of the New York State Petroleum Council:

“The New York Court of Appeals has effectively threatened the property rights of thousands of landowners who wish to lease their land for natural gas development. … There are real losses here, and it’s a real tragedy for thousands of farmers and people in rural communities that would have realized the economic benefits that oil and gas development can deliver. Municipal boards change hands every two years and a constantly shifting landscape of regulatory uncertainty virtually guarantees that major long-term investments in the state’s economy cannot occur.”

A study by the Manhattan Institute details the opportunity that’s being lost in New York:

  • $11.4 billion in economic output
  • 15,000 to 18,000 jobs in the Southern Tier and Western New York, regions that lost a combined 48,000 payroll jobs between 2000 and 2008
  • Another 75,000 to 90,000 jobs if the area of development were expanded to include the Utica Shale and southeastern New York
  • $1.4 billion in tax revenues to localities and the state

Unfortunately, these benefits remain on hold – even as New York’s economic development agency continues to ply the airwaves with commercials declaring the state open for business. We posted on this last year, when “Big Happens Here” was the catch-phrase. Currently, the state is trying to lure new businesses by offering tax-free sites under the slogan, “New York is Taking Care of Business.”

Contrast that with North Dakota, which has booming oil and natural gas development in the Bakken Shale. There, in an economy boosted by energy, entry-level workers earn nearly twice the current federal minimum wage, according to a report on the North Dakota Watchdog.org site. The state also has a national campaign under way to lure 20,000 new workers to fill open jobs. That’s right: While New York runs ads to attract business in hopes of creating jobs, North Dakota is so flush with jobs it is looking far and wide for workers to take them.

New York’s shale region supports safe energy development, but making it a reality is complicated by this week’s court ruling. Moreau:

“Hundreds of towns in the heart of the New York Marcellus Shale, known as the Southern Tier, have repeatedly supported safe and responsible natural gas development and job creation. Our companies look forward to partnering with these communities, to ensure that uncertainty created by the Court does not stand in the way of efforts to promote investment in New York.”

ABOUT THE AUTHOR

Mark Green joined API after a career in newspaper journalism, including 16 years as national editorial writer for The Oklahoman in the paper’s Washington bureau. Mark also was a reporter, copy editor and sports editor. He earned his journalism degree from the University of Oklahoma and master’s in journalism and public affairs from American University. He and his wife Pamela live in Occoquan, Va., where they enjoy their four grandchildren.