Is a small community in the Catskill sitting on $81 billion? Delaware County's claim shows localization of frack fight

Drillers proponents are talking big in Delaware County. Late last month, the legislature passed a resolution demanding $81 billion from the New York state to compensate landowners sitting over the Marcellus Shale, after the state banned drilling in much of the this area in the Catskills to protect the watershed that supplies New York City. But the county’s willingness or ability to back up the demand is questionable, judging from recent comments from a county official.

From a public relations perspective, the claim might seem like a good move.  It’s a chance for drilling supporters to remind everybody of the wealth, or the perceptions of wealth, associated with shale gas development and the practice of hydraulic fracturing. The $81 billion figure, according to the resolution, is derived from the gross value of shale gas under the county based on projections of well density and production in the water shed calculated by the New York DEP and the state DEC.

“We put it out there, and we don’t know what to expect,” said Dean Frazier, the county’s Commissioner of Watershed Affairs. “We merely wanted to make the point that there is a lot of potential. I don’t know what, if any, legal recourse we have. We’re not there yet. I would hope we would be able to begin a discussion.”

If the intention was to wow state officials with the claim, it’s yet to register.  Emily DeSantis, spokeswoman for the DEC, told me this week that state officials haven’t seen the request, which was written and (supposedly) copied to DEC chief Joe Martens on Feb. 22.  “I better go check to see if that went out,” Frazier added after I told him of the state’s response.”

To say the resolution is a form of political posturing is stating the obvious. More importantly, it’s effectiveness as a legal tactic remains to be seen. Where would the lack of acknowledgement by state officials, of even a flat out denial, leave Delaware County? The glove has been thrown, the demand not only publicly made, but recorded in a resolution passed by the board. Will it actually lay the foundation for legal action and build credibility of the county’s case? Or will it simply suggest -- to a public that is eagerly watching the unfolding showdowns between governments -- that Delaware County is bluffing?

It’s one more example of the significance of a fight over local government’s role in an industry that is largely governed by the state.

·      Last month, the New York State Supreme Court ruled in two instances that local governments had the authority to ban drilling and fracking, the controversial practice that injects millions of gallons of chemical solution through the water table to extract shale and other petroleum from rock.  In two separate rulings last month, New York State Supreme County upheld local ordinances in Dryden and Middlefield that banned fracking.

·      In Niagara Falls, city lawmakers were met with a standing ovation Monday after they passed a law to ban fracking, and the disposal of fracking waste within the city. They also wrote a letter supporting legislation that would prohibit fracking and wastewater treatment in New York.  

·      After an extended public forum and debate in Auburn, the city council lifted the ban on treating wastewater from natural gas drilling at the city's treatment plant.

As the fracking fight continues to extend from national to local fronts, the courts and the public are keeping score. 

Pro-drillers in NYC watershed demand $81 B for lost rights Resolution sets stage for next big battle over fracking ban

Drilling proponents are demanding $81 billion from New York state and New York City to compensate Delaware County residents for the loss of mineral rights.

The land in question harbors both the watershed that supplies New York City, and a prime section of the Marcellus and Utica shale drilling fairway, covering some of the largest natural gas reserves in the world. The state has included a ban on the controversial process of fracking in the part of the fairway running under the Delaware River watershed in the heart of New York’s Catskill Mountains, including parts of Delaware County.

The ban is spelled out in a policy document, called the SGEIS. In draft form for four years, the SGEIS is being develop as a guideline to oversee permitting of shale gas development in New York. The policy has drawn criticism from both drilling supporters, who see it as too restrictive, and opponents, who see it as too lax. Gov. Mario Cuomo said a final version is expected within months.

The latest version of the plan includes bans to protect sensitive fresh water supplies, including the watershed n the Catskills, from risks related of hyrdraulic fracturing, a controversial process that involves trucking, handling, mixing and injecting millions of gallons of chemical solution under high pressure into each well bore to stimulate gas production. In addition to the spent fracking fluid, the fracking produces waste from brine, heavy metals and naturally occurring radioisotopes that pour from the well bore.

The $81 billion demand for compensation for the loss of drilling rights in the Delaware watershed, stated in a resolution passed by the Delaware County last week, is yet another challenge to the soundness of New York’s policy and a likely prerequisite for a law suit. The resolution, drafted on Feb. 22 by Christa M. Schafer, clerk to the Board of Supervisors, states that drilling restrictions by the state and city would strip property rights from landowners in the towns of Colchester, Hancock, and Deposit within drilling buffer zones, and eliminate production from another 500,000 acres, or more than 80 percent of the county’s land base.

The issue of the legality of bans has just begun to hit the courts in other localities. Last month, two separate rulings in New York’s low court favored fracking opponents. On Feb. 24, state Supreme Court Justice Donald F. Cerio, Jr. ruled in favor of the Town of Middlefield’s ban on hydrofracking. The ban, issued by the Otsego County town in September, prompted a claim by Cooperstown Holstein Corp. that the ordinance denied rights of parties to reap economic benefits of a lease to develop mineral rights on 400 acres within the town. On Feb. 23, state Supreme Court justice Phillip R. Rumsey upheld the right of the Town of Dryden, in the Finger Lakes region, to ban mineral extraction activities. The case stemmed from a complaint filed by Anschutz Exploration Corporation, which argued that state permitting laws regulating oil, gas, and mineral extraction superseded local ordinances.

The Delaware County resolution sets the stage for another test over the rights of those who want to drill versus those who want to be protected from the impacts of drilling.

Click here to see a copy of the resolution

Chris Denton, an Elmira lease attorney, characterized the Delaware County resolution – and the implication it carries -- as a natural result of the anti-fracking movement. “Those who have opposed all oil and gas development are about to find that Newton's Third Law of Motion has an analogue in politics and the law -- For every action there is an equal and opposite reaction,” Denton said. “The constitutional issues are real, costly, and unresolved. With the current claim valued in the billions of dollars, there will be no shortage of quality legal counsel for the landowners and the towns in the pursuit of their claims.”

Deborah Goldberg, an attorney for the environmental group Earthjustice, said a law suit based on the loss of mineral rights, known as a takings claim, seemed like "a long shot" in this particular case. "It's hard to imagine what could justify damages of that amount," she added

Delaware County officials could not be reached late Friday. Check back for updates