Thursday, June 28, 2012

What’s next in Cuomo’s fracking plan for New York...? Clues found both in remarks, permitting data

If Governor Andrew Cuomo can be taken for his word, the wheels of shale gas development will soon begin turning in New York state, without legislative involvement.

Last week, Cuomo said the long-awaited policy document necessary for permitting high volume hydraulic fracturing wells would be issued “shortly” and, he added, while the legislature is not session as to avoid “a political discussion.” Cuomo has been promising to push forward with the contentious issue of shale gas development and fracking in particular since he took office in 2010, so it’s hard to know what “shortly” means. But stakeholders on both sides are taking his latest remarks seriously. Grass roots anti-fracting groups have turned up the heat with their demonstrations, phone calls, and letter campaigns targeting elected officials. Drilling proponents have fallen into camps both critical and supportive of Cuomo’s recently reported approach to limit the debut of fracking in New York to certain areas, based on the lead of local governments. But drilling supporters are also eager to see some sort of policy that would allow permitting to begin. That is expected to happen through the final SGIES (Supplemental Generic Environmental Impact Statement), which includes the state DEC”s environmental review of shale gas impacts that has been in the works for four years -- the document Cuomo says will be released “shortly”.

Last week, during an interview with the Albany’s WGDJ-AM, Cuomo indicated he was sticking with the idea of letting localities, rather than state government, determine how fracking operations will play out in New York. To do this, the state would count on a process of natural selection, more or less, to approve permit applications, talking into account where local governments want shale gas development for economic reasons, and where they (or the state) wants it banned due to public health and safety concerns.

“Many times a town or a city will say, ‘That’s nice, I’m glad you think that Albany, but stick to Albany, we know better. Government closest to home knows the best.’ “ Cuomo said.

Reading a politician is tricky, but I don’t think I’m going too far out on a limb by characterizing Cuomo’s approach as an attempt to reach a compromise in the highly polarizing issue of fracking. Having been in the news business for some time, I’m also keeping in mind the political strategy of releasing controversial material during a time when the mainstream media, activists, and politicians are distracted. Often this means late on a Friday, during the height of summer vacation, and/or when legislative session is out. In short, upcoming summer months square with that scenario.

In search of more clues as to where and when shale gas permits will be issued in the Empire State, though, I followed the lead of industry watcher and blogger Andy Leahy, and turned to the New York State DEC’s data base that tracks permitting activity. My take is similar to Leahy’s, and it’s really not a big surprise. The companies are setting their stakes down in the south central part of the state, over the richest part of New York’s Marcellus Shale and near major pipeline infrastructure.

Chenango County is one strategic spot. Here Norse Energy, the Norway firm, has been developing the Herkimer Sandstone formation (which does not require frackng) for a decade, and it intends to use its landhold and hardware to begin exploring the Utica and Marcellus shales as it works it’s way south toward the Millennium Pipeline in Broome County. I count 20 Norse permit applications in Chenango County for either the Marcellus or Utica, most of them from this year. If Cuomo releases his permitting document, Norse may also be among the first out of the gate in Broome County, where it this year applied for five shale gas permits in the town of Sanford.

Chesapeake, of Oklahoma City, is also vested in Broome County, with a dozen applications in the Town of Fenton from 2009. In Tioga County, Talisman, a Canadian company, has 11 active shale gas permits applications in the Town of Candor from 2008 and 2009. Carrizo, a Houston company, filed one this year in the Town of Owego.

But while these and other companies are positioning themselves to be among the first to sink shale gas wells in the Empire State, the regulatory and business atmosphere remains unsettled. Permits will likely have to be updated after the SGIES is finalized. Environmental groups, such as EarthJustice, have threatened to stop the industry from advancing with challenges to the legal integrity of a state policy that allows fracking to be tried in some areas while banned in others on environmental grounds. Moreover, the price of natural gas remains low, and some shale gas ventures in New York are languishing. They include a proposal by eCorp to get around the SGIES by using propane rather than fracking fluid to stimulate wells in Tioga County. The proposal, announced in late May, would give landowners a working interest in well operations rather than up-front lease payments. So far, this pay-me-later versus pay-me-now proposition has not generated much enthusiasm from landowners, and there is no deal on the immediate horizon.

Meanwhile, Chesapeake has sold mineral rights to 160,000 acres in the Finger Lakes region to Minard Run, a family-owned company in Bradford, Pa. Minard plans to drill exploratory wells into conventional formations over the next 18 to 24 months, with a “high probability” of also exploring the Utica Shale using unconventional horizontal drilling and high volume hydraulic fracturing in Cayuga and Seneca counties. This is in a region with strong drilling opposition, and could be, under Cuomo’s strategy, excluded from the state’s initial round of permit approvals.

Drilling proponents have questioned the soundness of Cuomo’s approach that allows some state residents to develop their mineral rights, but not others. Meanwhile, the legislative picture remains turbulent during an election year. Many fracking bills were in the pipeline as the legislative session ended last week, but none made it to the floor, indicating a reluctance by lawmakers to attempt to legislate a process that is still in the works administratively. The legislature can convene at any time, and would be likely to do so if the final SGIES – along with issues about where fracking is or isn’t allowed -- raised enough political concern. While any attempts to seriously curb or ban shale gas drilling is not likely to pass the current Senate, controlled by pro-drilling Republican leadership, it will be interesting to see whether the state’s policy, should Cuomo finalize it prior to elections, will stand up to the political test that will come on Nov. 6.

Monday, June 25, 2012

Who wants fracking waste? Jersey latest to decline

Where will waste from Marcellus wells go? Scratch New Jersey off the list, if Gov. Christie signs a bill passed this afternoon by the legislature.

As Frank Brill reports on his EnviroPolitics Blog, the New Jersey Senate this afternoon approved A-575, a bill that would ban bringing fracking-related waste water – called flowback --- for treatment, storage or disposal in the Garden State. It wasn’t close. The bill passed the Senate 30-5 after last week clearing the Assembly by a measure of 56-19-4. It now goes to Republican Governor Chris Christie.

Finding answers regarding what to do with growing volumes of waste regurgitated from a growing number of shale gas wells in the northeast, produced mostly in Pennsylvania as of now, appears to be a process of elimination. When the shale gas rush began in Pennsylvania in 2007, haulers simply pumped it into rivers through the nearest sewage treatment plants. That stopped in 2010 after state regulators, apparently ignorant of its impact on downstream water supplies until it began polluting them, learned conventional sewage plants lacked the equipment and know how to deal with the millions of gallons of brine, heavy metals, and proprietary chemical solutions produced with each fracking operation. The state passed legislation preventing municipal plants from legally accepting fracking waste, but not regulating what should be done with it.

The industry is now turning to emerging technology, while counting on enterprise and free markets to solve the problem of turning waste into a commodity. Firms like Salt Water Solutions are cropping up that will take the waste and recycle it and its constituents – a process made less onerous due to the fact that flowback is exempt form hazardous waste laws that govern waste from other industry.

Flowback, which includes rich concentrations of brine, is also being trucked to Ohio, where it is injected into deep, empty wells, a process that has been linked to minor earthquakes. While policy being drafted to allow shale gas drilling in New York is purportedly addressing how and if flowback will be disposed of in the Empire State, some communities, such as Niagara Falls, are taking no chances. The small city at the center of controversy related to a bustling waste disposal industry in the Rust Belt dating to Love Canal recently passed a resolution banning the import of fracking waste to the city’s chemical waste repositories.

The conundrum of treating fracking waste is exacerbated by the fact that companies don’t have to report what’s in it, exactly, although the New York State DEC lists several hundred chemical compounds, most of them toxic, typically used in fracking recipes that are pumped into well bores to stimulate production. Given the anti-regulatory mood of the country, and specifically shale gas producing states like Pennsylvania, the fracking waste question may become a problem for the next generation to solve. If shale gas becomes the country’s fuel of choice, the problem will not be a small one. In Pennsylvania, about 4,000 wells – each producing several million gallons of mostly unregulated toxic waste -- have been drilled and fracked, and the shale gas play is still in its infancy. If it develops along its potential, you can expect 60,000 wells or more within several decades in Pennsylvania alone, and tens of thousands more in the other four Mid Atlantic and northeaster states with shale gas reserves.

Monday, June 18, 2012

New York fracking trial balloon quickly loosing air... Criticism of Cuomo plan comes from both sides

A plan anonymously floated by the Cuomo administration last week to allow shale gas development in economically distressed areas of New York state while banning it in others is facing deflating criticism from both drilling proponents and critics.

The plan, reported Danny Hakim if by New York Times on Wedneday, echoed a proposal outlined by the National Resource Defense Council earlier this year. Specifically, the NRDC advised the state Department of Environmental Conservation to consider initially issuing permits for fracking within designated communities as part of a three-year pilot project. Permitting could then proceed elsewhere when fracking was deemed safe.

Leaders of groups on opposite sides of the debate, ranging from New Yorkers Against Fracking to the American Petroleum Institute, this week characterized the plan as unfair, unworkable, and legally unsound. Karen Bulich Moreau, executive director of the New York State Petroleum Council (a division of the APL) said limiting shale gas development to certain zones was bad for landowners, the state, and the industry. If science proves fracking safe, then permits should be granted on a first-come, first serve basis without geographic restrictions, she said. “The governor has said ‘science will determine this,’ and I think that is the expectation on both sides of the issue.”

Anti-fracking activists held a similar dislike for the plan, derived from a diametrically opposing view. Sandra Steingraber, a founder of New Yorkers Against Fracking, said the plan would make impoverished communities desperate for economic development guinea pigs for shale gas development. “In our state, people faced with economic inequity would include those living in communities in the Southern Tier, which are not only disproportionately impoverished but also disproportionately exposed to environmental pollutants left behind from previous industries.” She cited Monarch Chemical, IBM, and Endicott Johnson tanneries

Representatives from each side said their positions were grounded in justice. For industry supporters, justice means that landowners and residents have a right to pursue the economic fruits of the industry without suspect geographical boundaries. For anti-frackers, justice means that a practice deemed too risky for one community should be banned in all communities.

The fracking controversy has been raging for four years in New York state while the DEC has attempted to update its policy for permitting shale gas wells through a review called the Supplemental Environmental Impact Statement. The latest chapter of the controversy began on Wednesday, when Hakim sourced “a senior official at the State Department of Environmental Conservation and others with knowledge of the administration’s strategy” with a report that the state would at first limit fracking to “portions of several struggling New York counties along the border with Pennsylvania, and to permit it only in communities that express support for the technology.” The plan was similar to a recommendation by the NRDC suggesting a three-year pilot project in a limited area of the state to prove fracking safe. Since then, officials have spent the last several days distancing themselves from the plan. State officials, and Cuomo himself, have denied that any such plan existed. Officials at the NRDC, meanwhile, said they continue to stand against fracking anywhere until it is proven safe.

The reaction has been especially strong from New Yorkers Against Fracking, a coalition of grass roots groups lead by Sandra Steingraber, an ecologist and author who has written about the impact of pollution on children. NYAF is planning rallies in Binghamton and Albany on Tuesday and Wednesday aimed at the governor and the NRDC. Kate Sinding, an attorney representing the NRDC, last week apologized for the agency’s comments that “have created concern and confusion.” She added that the agency is calling for a “continued moratorium on new fracking until the environmental and health risks are fully and properly considered.”

But skeptical activists are demanding that the NRDC formalize this position, signaling a potential falling out between the $100 million mainstream environmental institution and many of its grass roots supporters. Walter Hang, an activist helping to organize the rallies in Binghamton and Albany, demanded that NRDC officials sign a letter requesting Cuomo “withhold drilling permits for any demonstration project in New York, and require full compliance with Executive Order No. 41” (by Gov. David Paterson to protect the public from the ill effects of shale gas development). “It is extremely important that we do not provide credibility to groups that might support the Governor's unconscionable, wretchedly bad proposal when all is said and done,“ Hang added.

Central to the fracking debate in New York is “home rule” – an ideal that would enable local municipalities to determine the future of shale gas development within their borders. The Cuomo plan reported by Hakim would honor the wishes of communities that wanted shale gas, as expressed through various town board resolutions, while keeping it at bay in communities that passed zoning laws to ban it.

Leaving the decision up to local governments is not a good option for the industry, Moreau noted. For a gas play the size of the Marcellus to be effectively developed over the course of decades, the industry needs a predictable and uniform regulatory environment from one town to the next to ensure access to large, contiguous tracks to build out extensive shale gas infrastructure over time.

Wednesday, June 13, 2012

Breaking News: NY officials consider plan to begin fracking Cuomo’s approach squares with NRDC advice

New York state environmental regulators are considering a plan to begin shale gas development – and the controversial process of fracking – in certain locations within the Marcellus Shale drilling fairway on a trial basis.

A proposal to allow fracking in some parts of the state but not others was spelled out in a Jan. 11 memo to state environmental regulators from attorneys with the National Resources Defense Council. The memo urged officials to consider keeping “special places off limits” to fracking, due to risks to the water supply, while allowing it in other areas. The special places include the New York City and Syracuse watersheds, Catskill parks, the Finger Lakes regions, and “primary” aquifers.

The Marcellus drilling fairway -- the area with the greatest potential for shale gas development – extends from northern Pennsylvania into south central New York, including Tioga, Broom Counties, Delaware, and Chemung Counties. Beneath the Marcellus is the Utica Shale, which encompasses the same area, but extends much further north and west. Permits allowing for shale gas development in New York are on hold pending a review by the state Department of Environmental Conservation on the environmental impacts. The review, called the Supplemental Generic Environmental Impact Statement (SGEIS), is expected to be finalized later this year

As part of that review, the NRDC memo asked regulators to consider a three-year demonstration project in several “geographically limited areas.” Depending on the outcome, the state could then decide whether to “advance further a broader HVHF (High Volume Hydraulic Fracturing) program.” The memo was signed by NRDC senior attorneys Eric Goldstein and Kate Sinding, and consultant Craig Michaels.

According to an article by Danny Hakim in this morning’s New York Times, Gov. Andrew Cuomo’s administration is considering issuing permits in specific areas after the SGEIS is finalized. Hakim reported that “Cuomo’s administration is now trying to acknowledge the economic needs of the rural upstate area, while also honoring the opposition expressed in some communities, and limiting the ire of environmentalists, who worry that hydrofracking could contaminate groundwater and lead to other hazards.” Hakim’s story did not specifically link Cuomo’s approach to the NRDC proposal, although Cuomo’s plan appears to square with the NRDC recommendations, and activists are disappointed with the environmental organization for putting it on the table to begin with. Robert Kennedy Jr. serves as a senior attorney for the NRDC and sits on a panel that advices the DEC on it’s approach to shale gas.

Sinding said that the comments on the SGEIS were not an endorsement of plans to move ahead with shale gas, but a product of legal due diligence in evaluating all options. “We were clear that we were neither specifically endorsing any of these alternatives nor were we presupposing that any level of development should be approved – simply that the state cannot fully evaluate fracking here without an in-depth analysis of any and all scenarios that could take place here.” Sinding added: “We regret that these comments have created concern and confusion. We stand with our partners across New York State in calling for a continued moratorium on new fracking until the environmental and health risks are fully and properly considered.”

Nevertheless, the NRDC recommendation for regulators to consider a demonstration project in the context of the state's broader review has drawn criticism from activists, who argue that if drilling is unsafe in one watershed, it’s unsafe in others. Sandra Steingraber, founder of New Yorkers Against Fracking, characterizes the places where drilling would be permitted on a trial basis as “sacrifice zones.” Areas likely to see the first permits for fracking include Broome and Tioga counties, which sit in the center of the fairway, where shale gas development has been promoted as the foundation of an economic renaissance for impoverished communities.

"Partitioning our state into frack and no-frack zones based on economic desperation is a shameful idea, and we will actively oppose its implementation," Steingraber said.

The DEC suspended shale gas permitting in 2008 due to concerns over the safety of fracking, short for high volume hydraulic fracturing. The process involves injecting millions of gallons of proprietary chemical solution into the ground under high pressure to fracture bedrock and stimulate gas productions from a given well. Fracking has raised questions about the potential drain on water resources, the toxicity of the chemicals used, and the handling and disposal of waste --called flowback -- by an industry exempt from state and federal laws governing hazardous waste.

The governor’s office has been under pressure both from landowners groups and businesses pressing for shale gas development, and environmental groups opposed to it.

Steingraber, author of several books about toxic exposure relating to children, accused the NRDC of a compromise that would concede the development of shale gas in some communities to spare others. “Instead of defending these communities, which is NRDC's self-appointed charge, the organization provided to the DEC in great detail a plan that sounds a lot like the very plan that is today being floated by the Cuomo administration: partitioning the state into frack and no frack zones in a way that will, if implemented, place the Southern Tier on the far side of the shale gas curtain.”

Others welcomed signs that shale gas permitting could move forward in the Southern Tier. Jim Worden is a dairy farmer, drilling proponent and leader of the Windsor Landowners Coalition, which he helped organize to leverage bargaining power with shale gas companies seeking land leaes for gas development. Worden lives in an area of Broome County where several municipalities have passed resolutions asking the governor to begin issuing permits. “I agree, if it (fracking) is unsafe in one watershed, it is unsafe in others,” Worden said. “But this is not about safety. It’s about politics. I think it’s safe. This deal (to exclude some areas and include others) was made just to appease the people who don’t want it. Hopefully, this will get things going.”

The NRDC, with 1.3 million members and annual donations approaching $100 million, is one of the country’s most influential environmental institutions. It has international offices, but with its headquarters in New York City, it has a special stake in the shale gas controversy in New York state. NRDC Founding Director John Adams is a life-long resident of the Catskills, one of the areas where fracking would be prohibited.

The controversy involving the NRDC is emblematic of the problem large, mainstream environmental groups have had defining their positions on hydraulic fracturing. The Sierra Club once supported shale gas development as a clean alternative to coal and even accepted $26 million in donations from Chesapeake, one of the country’s largest gas drillers. After facing heavy criticism from local chapters, it changed its position. It now opposes shale gas development as environmentally unsound.

Wednesday, June 6, 2012

New York state watersheds central to fracking debate... Why does ban apply to some, but not others?

 Sandra Steingraber with Binghamton Mayor Matt Ryan

If the debate over fracking were a political campaign – and in many ways it is -- New York might be considered a pivotal battle ground state.

Like Pennsylvania, New York sits over two of the world’s largest shale gas reserves – the Marcellus and the Utica. But while Pennsylvania has allowed the industry access to these pay zones with relatively few regulatory restrictions, New York has suspended permits for shale gas pending a review of its environmental impacts.

As recounted in my book, Under the Surface, the movement to prevent shale gas development in New York started in June, 2008 with unanswered questions raised by local residents, planners and elected officials at town hall meetings about the state’s ability to safely regulate the industry in areas traditionally untouched by mineral extraction. In the four years since, skepticism over the government’s ability to control Big Energy – fueled by a growing list of problems and lack of transparency in Pennsylvania and other drilling states -- has become a lynch pin of the national anti-fracking campaign. That campaign features upstate residents and activists such Walter Hang and Sandra Steingraber, backed by a growing cast of celebrities such as Mark Ruffalo, Alec Baldwin, and Josh Fox, and by a collection of scholars and politicians. They warn of an unhealthy and unsustainable future dependent on a shale gas economy. They are taking on an industry with deep PR, lobbying, legal, and technical wherewithal and landowners of large rural tracts pitching shale gas development as the means to an economic renaissance and a preferable alternative to coal.

Within the last month, anti-fracking activists have featured rallies in Albany and Syracuse, and this week they were in Binghamton. Their efforts are aimed at Governor Andrew Cuomo and a review by his New York Department of Environmental Conservation evaluating the impacts from shale gas development. As those following the story know well by now, fracking, short for high volume hydraulic fracturing, involves mixing toxic chemicals with water and injecting them into the ground under pressure to stimulate gas flow. Each shale gas well requires 4 million or more gallons of this proprietary chemical mix, and produce like amounts of flowback consisting of spent fracking fluid, brine, heavy metals, and other elements buried in the earth’s crust for 600 million years. Six more wells may be allowed per square mile of a shale gas reserve, which span multiple states.

The latest draft of the DEC’s environmental review of the process, called the Supplemental Generic Environmental Impact Statement (SGEIS), would, ban fracking in watersheds that supply New York City and Syracuse due to risks of opening an exposure pathway to these hazards through water pollution. This only underscores the inherent problem with fracking in the minds of critics. If the risks of water pollution are unacceptable in these watersheds, they argue, why are they acceptable in others? “We see it as a matter of environmental justice,” said Steingraber, an ecologist and award winning author. “A child who drinks water from an unfiltered well in an aquifer in Broome County has the same rights as a child in Manhattan who drinks from an unfiltered water-supply that begins high in the Catskills.” Steingraber won the Heinz Foundation prize for her latest book, Raising Elijah, and donated most of the $100,000 honorarium to help found New Yorkers Against Fracking, an umbrella group that has organized localized grass roots endeavors statewide.

Steingraber delivered her remarks about environmental justice on Tuesday outside Binghamton City Hall with Mayor Matthew Ryan and other politicians and representatives of environmental groups. The greater Binghamton area, which sits over a prime part of the Marcellus Shale, is a strategically important place in the debate. While the city’s residents are represented by Ryan and others who generally oppose fracking, much of the outlying area comes under the jurisdiction of landowners and drilling proponents who support state Senator Tom Libous. As a drilling advocate and deputy majority leader of the Republican controlled Senate, Libous is positioned to block any bills that would further delay or ban fracking in New York state. Several of those bills have gained traction in the Democrat controlled Assembly.

Broome County legislator Julie Lewis, vice president of the Joint Landowners Coalition of New York Inc., hopes to add her pro-drilling voice to the Assembly next year. Lewis is challenging incumbent Donna Lupardo for the 126th district seat. Lupardo, a senior Democrat and member of the Assembly’s Environmental Conservation Committee, has advocated more study of issues related to fracking, while Lewis is pressing for an end to delays. Lewis sees the DEC’s decision to ban drilling in certain watersheds as a conciliatory tactic to ease pressure from anti-drllling forces in politically influential parts of the state. “They did it to appease these groups,” Lewis said. “These problems (related to water pollution and drilling) are very minor, isolated and correctable.“

Steingraber and Co. disagree. They are pressing their message that fracking threatens profound and lasting damage to the water table at a strategically important time. There is a sense that a showdown is imminent later this year, when the state DEC is expected to finalize the SGEIS. With that piece in place, permitting could begin, barring no legislative or judicial stays. The SGIES,, which has been sent back to the drawing board twice after more than 60,000 written comments, mostly from critics, continues to draw relentless fire from drilling opposition who now site the exclusion of certain water sheds due to safety concerns, but not others, as another fatal flaw.

But not all environmental groups are together on this. In reviewing the SGEIS, officials from the National Resources Defense Council have suggested allowing permitting on a trial basis in communities over the most promising shale gas zones, in places like Broome County that are generally receptive to the industry. Robert Kennedy Jr., a senior attorney for the NRDC, also sits on a panel advising DEC Commissioner Joe Martens and other state officials on managing shale gas. Steingraber and the New Yorkers Against Fracking activists characterize the zones where drilling would be allowed, while others are spared for political expediency, as “sacrifice zones.”

The picture will likely get more complicated after the political cards are shuffled with this year’s election. Will voters give anti-fracking Democrats or pro-fracking Republicans control over both chambers of New York’s legislature and critical influence in deciding once and for all whether New York will become a drilling state? There is also a possibility that Cuomo’s office will release the final SGEIS after the elections and before the new legislature convenes, at a time in which political factors could be effectively neutralized. (Cuomo advocated moving the SGEIS forward soon after he took office, but has since deferred to the DEC.)

The state’s fracking drama plays out in the backdrop of a national election year that will also shape the future of shale gas development. A Romney EPA would not likely stand in the way of a push for on-shore shale gas development from the drill-baby-drill contingent. Obama, meanwhile, has given public backing to shale gas production as a necessary part of his “all of the above” energy vision. His EPA, lead by Lisa Jackson, is reviewing the safety of hydraulic fracturing in a report that is also due at the end of this year. That report will send a critical message as to whether an Obama EPA is ready to get more involved in regulating the industry and eliminating federal exemptions to the Safe Drinking Water Act (the infamous ‘Haliburton Loophole’) that allows the industry to put what it wants into the ground without disclosure. But don’t expect that report before election time, either.

Monday, June 4, 2012

Pa. company targets Utica Shale in Finger Lakes region Purchase from Chesapeake includes plans for fracking

Banking on the long-term prospects of shale development in New York, a Pennsylvania drilling company has purchased mineral rights to 160,000 acres in the Finger Lakes region from Chesapeake Energy.

According to records filed last week with the New York State Public Service Commission, Minard Run, a family-owned company in Bradford, Pa., purchased rights to 104,779 undeveloped acres from Chesapeake of Oklahoma City for an undisclosed price. Minard plans to drill exploratory wells into conventional formations over the next 18 to 24 months, with a “high probability” of also exploring the Utica Shale using unconventional horizontal drilling and high volume hydraulic fracturing.

Minard Run’s purchase of Chesapeake assets, in Cayuga and Seneca counties, also includes 56,139 acres with 413 conventional wells, most of them tapping the relatively shallow Queenston formation at 2,500 feet; 195 miles of pipeline; and three compressor stations. The developed acreage could accommodate an additional 990 wells, spaced on 40-acre units, according to the plan. CLICK HERE for a map.

An overview of the plan was included in a May 31 filing with the New York Public Service Commission, along with earlier reports posted by industry watcher Andy Leahy. The sale squares with Chesapeake’s public plans to raise cash and reduce debt, according to Leahy, “both of which have been logged as concerns by investors and stock analysts.”

Minard Run, established in 1875, claims to be the world’s oldest independently-owned petroleum company.

The Southern Tier and parts of Central New York sit over prime sections of two of the world’s largest shale gas reserves, the Utica and the Marcellus. But given the regulatory uncertainty and the low price of natural gas, once-frenzied prospecting in the region in 2008 has given way to a wait-and-see approach. The New York State Department of Environmental Conservation is expected to begin permitting shale gas wells when it completes a regulatory and environmental review of the controversial process of high volume hydraulic fracturing, known as “fracking.” The review, now in it’s fifth year after multiple drafts and heavy criticism, is expected to be finalized sometime before year’s end, and will face likely opposition in the courts and legislature.

Still, some companies are showing renewed interest in New York State Shale gas. Lindsay Wickham, a field supervisor with the New York Farm Bureau, reported recently that some areas are seeing an increase in the presence of landmen negotiating terms with landowners.

In the PSC report, Minard Run officials outlined their plans “with the anticipation of natural gas prices modestly strengthening in 24-36 months,” according to a briefing filed with the commission. In addition to exploring the Utica, plans call for an additional 10 to 20 wells per year into the Queenston formation and additional pipelines and compressors. That would increase the number of traditional wells on the developed acreage from 413 to 1,400.