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Politics Trump Facts in Assembly Passage of Moratorium Bill

Industry to Governor: Anti-Upstate, Job Killing Bill Must be Vetoed

Independent Oil and Gas Association of New York
November 30, 2010

Albany, NY -- The Independent Oil & Gas Association of New York today decried the State Assembly for its passage of A.11443-B (Sweeney)/S.8129-B (Thompson) – a bill that will place a moratorium on natural gas exploration until May 15, 2011.

The industry, representing more than 300 businesses with 5,000 employees, will implore Governor Paterson to veto the poorly drafted bill, which could halt all natural gas development that uses hydraulic fracturing, not just proposed natural gas exploration in the Marcellus Shale.

"This bill is a job killer, an upstate business killer and potentially an industry killer," said Brad Gill, executive director of IOGA of NY. "The governor must be made to understand the vast unintended consequences and act quickly to reject this needless legislation."

If signed into law, the bill would do unnecessary and perhaps irreparable harm to the state and existing industry operations, and jeopardize the livelihoods of thousands of business owners and their employees. The legislation also would undermine the state Department of Environmental Conservation's ongoing review of the regulations governing natural gas exploration in New York.

As written, the bill could affect the vast majority of current (non-Marcellus) oil and gas exploration and development in New York State. It would bar the kind of existing safe drilling that has been in practice for many years in New York. It could also result in the potential loss of 5,000 industry jobs, threaten the future of more than 300 businesses and temporarily eliminate the $1 million in annual revenue the state collects from traditional drilling permit fees. Hundreds of millions in lease payments and royalties to landowners and tens of millions in tax revenues to local towns, counties and the state also will be lost during this moratorium.

"A majority of our elected representatives in the Senate and the Assembly have failed to actually read this bill, to fully understand the outstanding safety record of our industry, and have instead pandered to extremists and politically motivated opponents who have smeared our industry for more than two years," Gill said. "It's a disservice to the public and to the professionals in our highly regulated industry, including many who could very likely lose their jobs as a result of this terrible bill."

The oil and gas industry reminded the governor of his desire for expanded natural gas exploration as expressed in his 2009 State Energy Plan. According to the governor's directives in Executive Order #2 of the plan, "the State can ensure adequate supplies of power, reduce demand through new technologies and energy efficiency, preserve the environment … stimulate economic growth, and preserve the individual welfare of New York citizens and energy users." The 2009 plan states that increased exploration in the Marcellus Shale would "create jobs, create wealth for upstate land-owners, and increase State revenue from taxes and land-owner leases and royalties."

Increased natural gas production has the potential to stimulate the state's economy in several major ways, including business-to-business spending, lease and royalty payments to landowners and increased income, sales and ad valorem taxes to municipalities.

"I remind the governor that hydraulic fracturing has been used successfully and safely on water, gas and oil wells for 60 years in New York, and that drinking water has not been adversely affected," Gill said. "Members of the Legislature have based their votes on a ridiculously false assumption that hydraulic fracturing fluid will make its way into groundwater and surface water, and that operations will contribute to air pollution, despite stringent state and federal regulations. History has proven otherwise."

IOGA-NY was founded in 1980 to protect, foster and advance the common interests of oil and gas producers, as well as professionals and related industries in the State of New York. To send a message to the governor in support of natural gas exploration, visit marcellusfacts.com.