Moxie: Natural Gas Inventiveness Combined with Courage
Dr. Michael Morrongiello
Psychologist and Steuben County Landowner
While Pennsylvania grows jobs and lowers its energy costs by building new gas power plants, New York State sits on its hands with respect to natural gas development. It’s time for Governor Cuomo to show some moxie and save our Southern Tier economy.
Moxie means courage combined with inventiveness, which is what we need to revive our ailing upstate economy. This is just what Lycoming County, Pennsylvania is going to get. A company called Moxie Energy will invest $800 million to build a new power plant called Moxie Patriot to generate electricity powered by locally produced natural gas. The project will begin in March, 2013, and employ 200 to 500 construction workers. The total payroll for this endeavor is estimated at $40 million injected directly into the local economy.
When completed, Moxie Patriot (see rendering to right) will produce electricity to light 750,000 homes, employ 30 people in high-paying jobs and provide cheap, clean power. Why? Natural gas is cheaper when it’s local, and not shipped long distances. This puts money in the pocket of every electrical customer and makes job creation easier because businesses will have reduced energy costs. Also, natural gas burns cleaner than any other fossil fuel, resulting in a cleaner environment.
We’re losing jobs, in the Southern Tier of New York. Sikorski recently closed, taking with it 575 jobs, but those jobs aren’t the whole story. The Sikorski plant paid $815, 000 in property taxes, including $465,000 in school taxes to the Horseheads School District, $200,000 to Chemung County and $100,000 to the Town of Big Flats.
How do you replace all that tax revenue, and those jobs? Answer: in the weak upstate economy, it’s not likely. But it gets worse. In Steuben County, Philips Lighting closed its doors, saying goodbye to 280 jobs. Unemployment in Chemung, Schuyler and Steuben counties now stands at an inexcusable 9.8%.
Because of gas drilling you could throw a rock and hit prosperity and hope in Pennsylvania; in New York the same rock hits unemployment and despair.
We need jobs right now. Natural gas development will provide those jobs. But we’ve been waiting more than four years. And, now we’re waiting on yet another study, this one by the New York State Department of Health – which already issued a report in February, 2012, declaring that “significant adverse impacts on human health are not expected from routine HVHF” (high volume hydraulic fracturing).
Yet, there have been no reports of ill health in Jamestown, a town of about 31,000 people. Hydraulic fracturing has been going on in the Jamestown aquifer since at least the 1980’s.
Gov. Cuomo acted with blinding speed to pass an assault weapons ban; meanwhile, the study of hydraulic fracturing drags on into its fifth year. The Department of Health and the Department of Environmental Conservation are slated to complete their work in February. It’s time, Governor Cuomo; show some moxie. Act for the people of upstate. Let’s begin developing our natural gas resources and our upstate economy.
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“Because of gas drilling you could throw a rock and hit prosperity and hope in Pennsylvania.”
I wish that were true.
Yes, there are some busy spots where gas extraction, transport & processing have added hundreds of jobs in PA. The refineries are thriving, and there is room for small business investment in the gas processing sector. It gives me hope for towns like Uniontown and Somerset in the western part of the state. Gas has saved them, there’s no question.
The same thing will happen in New York. In fact, you’ll benefit more than we have in PA, precisely because it is NOT the gas industry writing the regulations for the state. That’s what happened in PA. Believe me, you don’t want this.
The truth is that in many of the PA fracking areas themselves, there’s been no significant economic revival, with only a minority of landowners benefitting, thanks to the large number of first-generation frack leases in effect. These leases, most of them signed while Corbett was attorney general, are laughably inequitable, basically exempt the frackers from any liability for sloppiness, cannot be cancelled by the landowner, pay only 8% on profits after expenses, and leave the landowner vulnerable to any dispute that may arise between the fracker & its financial backers. Only a tiny amount of the actual wealth being extracted from the ground is staying in the communities it is harvested from.
And even many pro-frack landowners detest PA’s Act 13, which was designed by a corporate lobby/PAC and accepted virtually without modification by the state. It explicitly restricted the townships’ ability to control permitting. It also bans the Townships from opposing any gas permit, unless it forfeits all impact fees.
So be glad that a democratic process is at work, and ignore the screams from both sides of the gallery.
Your 5th paragraph is simply not correct, Richard. Because of Act 13 and the multiplier aspects of the industry, every single landowner and resident has benefited economically. It’s undeniable. Secondly, 8% royalties is even close. I’m sure there are old leases at that rate but I know of none executed in the last 5 years that are not at 12% and some that are 20%. Also, the wealth is definitely staying in these communities, to the extent that some banks in Bradford County have had difficulty dealing with all the money and finding places to put it. That’s a fact. As Tony Ventello at the Bradford County Progress Authority. This is not to deny there can be economic or other costs (nothing comes free, we agree on that) but the net is distinctly positive – overwhelmingly positive and when compared to NY there is a stark difference. See:
http://eidmarcellus.org/marcellus-shale/rumors-of-a-southern-tier-revival-absent-natural-gas-are-greatly-exaggerated/16899/
Enjoy your observations, by the way, even when I disagree. Good discussion always emanates from your comments.
Thanks for your kind words.
Virtually all the leases in my township were signed before 2006, and 8% is, tragically, standard.
I won’t dispute that the gas industry has brought jobs and revival to many parts of the state, including places that were really in desperate condition, like Fayette, Washington and Greene counties.
But the problems are real, and some communities in my world have been net losers. In Bedford County, the drop in land values around the relatively few fracking sites (many of which involve unhappy landowners with crappy leases) far exceeds the income from the wells, most of which have paid nothing more than token sums, and all of which degrade the value of the land with ugly purpose-built construction.
The well complex at Blue Knob hit property values at the resort quite hard (though I know of no water contamination issues or any other problems, other than some air quality complaints). And land values in the area around Clearville plummeted fast after the surface contamination problems there were publicised. The promised upgrades in road infrastructure haven’t materialised, and fracking definitely trashes local roads. There’s are similar scenes in parts of Somerset.
Though the shale gas reserves are ample in theory, I’m now of the opinion that the geology in the south central part of the state isn’t all that viable for fracking, and we won’t see a lot of it for a long while. The substrate is just too wet, and fracking on steep hills makes for additional problems and expenses with with water feed and effluent control. The fracking operations in the western part of the state (I haven’t visited those on the NY border) are much more profitable and seem to cause far fewer problems. The landowners are better organised, too.
Act 13 isn’t popular in even in many conservative circles, and not only because it shuts the townships out of land use decisions in their own communities. Too much of the impact fee revenue is channelled through, and fleeced by, the state, while the townships still struggle to provide basic services.
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