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Economist Talks About the Potential for Hydro-Fracking in the Marcellus Shale During Conference at Saratoga Hilton

Mareesa Nicosia
The Saratogian
November 19, 2010

SARATOGA SPRINGS — A federal economist says New Yorkers should consider hydraulic fracturing as a way to tap natural gas resources trapped deep underground in the Southern Tier and Finger Lakes regions of the state.

Sometimes referred to as hydrofracking, the process has caused controversy throughout the state and beyond. It involves horizontal drilling and the injection of millions of gallons of water, sand and chemicals into a well to break apart the shale and release gas. The gas is then captured for residential, commercial and industrial use.

John Felmy, a chief economist with the American Petroleum Institute, which represents oil companies, spoke at a conference Thursday at the Saratoga Hilton about the potential for hydro-fracking in the Marcellus Shale, a rock formation including areas of southern New York and northern and western Pennsylvania that holds vast reserves of natural gas.

In an interview prior to the conference, Felmy said a growing population and increasing demands for electricity in the U.S. will require the production of more natural gas. Natural gas is used to heat 60 million homes and makes up almost 24 percent of the nation’s energy supply, federal statistics show.

Renewable energy sources like solar and wind constitute 1 percent of the nation’s energy supply and require backup generation such as natural gas, Felmy said. In addition, while distribution costs for natural gas have spiked, consumers who heat their homes with oil are still paying twice what natural gas consumers pay.

"We’re going to need this," he said.

Felmy’s visit to Saratoga Springs comes just days after the city of Pittsburgh imposed a ban on natural gas drilling. New York imposed a moratorium on drilling permits through May 15, 2011, in response to concerns that chemicals used in the process could pollute groundwater.

However, the American Petroleum Institute is appealing to cash-strapped landowners and farmers with the idea that if and when the moratorium in New York lifted, they could one day lease their land for hydrofracking and reap the royalties.

"(Farmers) need this type of shot in the arm in terms of developing a resource that can be very beneficial," Felmy said.

A state study is under way to examine the safety of the process.

"We can’t do anything until the study is complete," Felmy said.

Local farmers said they could see both sides of the issue, but would want a thorough report backing the safety of the drilling process in-hand before they’d consider leasing their land in the event that natural gas was accessible on their property.

"I know of some landowners who have signed contracts for it out in the central part of the state," said David Wood, of the Eildon Tweed Farm in Charlton. "It sounded like a very profitable venture. It’s an attractive thing, but the main issue is whether or not safety is going to be assured."

Edgar King, of Kings-Ransom Farm in Northumberland, agreed that the potential for profiting from tapping the natural gas during the farm community’s "darkest days" is appealing.

"I recognize certain producers have a dire need to access cash," he said. "But I’d like to know that I was safeguarded against whatever alleged pollution could occur."

He said he would trust a review by the Department of Environmental Conservation.

"If the groundwater is not going to be altered, then it’s kind of a no-brainer, but that’s the question," King said. "It may be the billion-dollar question."