Author: Brian Brock
About Brian Brock
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The several parts of our local government each have their own powers and responsibilities. The Board of Education teaches our children. The Fire Department and EMS aid us in emergencies. The Highway Supervisor maintains and improves the roads. The Town Justice judges the accused. The Town Clerk keeps records, collects taxes, and issues licenses. Continue reading…
Franklin residents may have not imagined that a finished Constitution pipeline would be much of a problem – unless they are landowners along the route. It would be just a hundred foot wide clear-cut stretching ten miles across Franklin from Route 357 west of the East Sidney Dam to Route 28 up on Franklin Mountain.
After repeated requests by the Franklin Town Board, Leatherstocking came to the May meeting to brief them on a possible natural gas distribution line to run from the proposed Constitution Pipeline through Franklin to industry in Fraser, Town of Delhi. (Both Morningstar Foods LLC and Clark Inc. could be large consumers of gas.) Probably this pipe would be low pressure ten-inch high density polyethylene, but medium pressure four-inch steel is an option. Either would be buried three to five feet deep.
Leatherstocking Gas Company LLC is a joint venture between Corning Natural Gas Corporation and Mirabito Holdings. It has started constructing distribution systems in the townships of Bridgewater and Montrose, Susquehanna County, Pennsylvania.
Mike German, president of Leatherstocking, showed two speculative routes. One would run 20.4 miles down County Highway 28 and State Highway 10 through North Franklin, Meridale, Meredith, and Delhi. The other would run 19.6 miles down Chamberlin Hill Road, State Highway 357, County Highway 14, and County Highway 16 through Leonta, Treadwell, and West Delhi. The latter is considerably different from the one shown last year to the councilmen of the towns of Delhi and Meredith, and to the trustees of the village of Delhi. That would have run down Otego Road to State Highway 357. Unlike the old, this new version does not go through the village of Franklin, and therefore to supply gas to the village a spur would have to be built from Leonta, a distance of 2.5 miles.
Leatherstocking does not have the power of eminent domain and would have to negotiate for all easements. It could gain that power by becoming a utility.
At the tap into the Constitution Pipeline (i.e. the station gate), there would be built a twelve foot by twelve foot utility building containing equipment to meter, reduce pressure, and odorize the gas. This distribution system would not require a compressor.
This distribution line is contingent on the construction of the Constitution Pipeline. Even if that is completed by March 2016, construction of this line would not begin until 2017 or 2018. Prior to the Franklin/Delhi line, Leatherstocking is planning to build distribution lines from Millennium Pipeline to Windsor and then from Constitution Pipeline to Sidney. Other possible service areas are Bainbridge and Unadilla.
The federal government requires that Delaware County replace its emergency communication system, having sold the frequencies on which it operates. The existing system was built in the 1970s and replacement parts are no longer manufactured. Also, it reaches mobile units in only 65% of the county, whereas the new system should reach 95%. Costs are estimated at $5 to 10 million, of which $5.3 million has been covered by grants to date.
The required new communication towers are to be located near the existing ones, of which there are twelve. Phase I includes replacement of the four towers in primary locations such as on top of Franklin’s Johnson Mountain, just south of Heathen Hill. Other primary locations are Houck Mtn., Walton; Mt. Pisgah, Andes; and Mt. Utsayantha, Stamford. The existing facility must be kept operational until the new system is completed, and the new tower also requires an equipment shack.
On Johnson Mtn., the county had planned to put the new tower and its shack next to the old one, but the land owner, Mr. Leva, complained that it would take up more of his limited road frontage. He suggested a property across Ed Klug Road, owned by his mother. According to Supervisor Taggart, an agreement was reached with the Leva family to locate the new tower on a half acre of Maria Leva’s parcel, across from the existing tower. But since late last year, he said, the owners have been involved in a family squabble, and have not responded to numerous attempts to finalize the easement.
It is unclear why only a Leva family property is suitable. While they own four parcels that are above 2,000’ along Ed Kung Road, Scott Taggart owns others nearby. The Leva family are nonresidents, whereas Mr. Taggart lives in Franklin.
With construction now on hold, the Delaware County Board of Supervisors voted unanimously at their April 9th meeting to begin eminent domain proceedings (Resolution 78). But apparently there were problems with the wording. So, in their meeting of May 25th, they rescinded that resolution and voted for the similar Resolution 114.
Seven of the twelve towers are planned for completion this year, and completion of the system is scheduled for mid-2016.
Just one #&$!! pipeline after another…
The market for natural gas in the northeastern U.S. is out of balance. There is too much supply in northern Pennsylvania and too much demand in New England. As a result, those producers are being paid much less than their consumers are paying. One solution is to add pipeline capacity, in order to ship the gas east.
In the fall of 2011, the Tennessee Gas Pipeline Company, LLC proposed a new thirty-six inch gas pipeline to run between two of its existing pipelines, from Brooklyn PA through Franklin to Wright NY (see NFR, Spring 2012) — only to abandon this Northeast Exchange project a few months later. TGP never would say why they abandoned the Brooklyn/Wright line, but it was being bought by Kinder-Morgan Energy Partners, LC. At any rate, Williams Partners, LP took over that route by proposing the Constitution project (see NFR, Summer 20122).
In the fall of 2012, TGP proposed the Northeast Expansion project, a gas pipeline from Wright NY to Dracut MA. In the recent solicitation to suppliers (February 13 to March 28), TGP proposed a capacity of this Wright/Dracut line of 0.6 to 2.2 billion cubic feet per day (Bcf/d). Because they are going forward, presumably TGP signed up enough supply, but we don’t know how many did.
For more than a year, it seemed as if TGP was content to plan for the Constitution Pipeline to supply gas to the input of this Northeast Expansion Pipeline in Wright. But the Constitution would supply only 0.6 to 0.8 Bcf/d. As a result of interest from Pennsylvania’s gas producers, TGP has revived plans for the Northeast Exchange. Originally it was to have a 0.6 Bcf/d capacity, but with no booster compressor station.
Now, the recent plan adds just such a station somewhere in Delaware County, which would increase capacity. If built, such a booster compressor would be located around the middle of the route. Currently it is planned for the North Franklin or west Davenport area, east of State Highway 28. Additional compression engines would have to be installed at existing compressor stations at the input in Clifford PA and the output in Wright NY.
Compressor stations make poor neighbors, polluting the air with noise and chemicals. The compressors spin 24/7/365, and the occasional venting sounds like a jet taking off. The small leaks and huge volumes of vented shale gas have been linked to a variety of signs of chemical poisoning such as headaches, dizziness, nausea, nose bleeds and rashes.
Together, the Northeast Exchange (southwestern half) and the Northeast Expansion (northeastern half) is being called the Northeast Energy Direct or NED. The southwestern half of this project, including the section through Franklin, has not even been pre-filed with the Federal Energy Regulatory Commission. Of course the same was said about the Constitution Pipeline back in 2012.
In New York, the new TGP route is almost identical to the original one, but both show some differences from the Williams route of the Constitution. All three take a very similar path through Delaware County.
If both pipelines are built, their ill effects double. At best, a second strip of easements would double the width of the easement corridor and at worst, create two separate parallel strips. Construction in 2015 and then in 2017 would take twice as long. Wear and tear on roads would double, as would traffic congestion. Tax assessments of infrastructure and easement payments would likewise double, but this would be offset by decrease in assessments of affected parcels. Affected land owners would be twice cheated of fair compensation. And while there has been some talk of local distribution of gas, two pipelines would not make such a supply twice as cheap.
Currently the timeline is: taking bids from potential suppliers of gas – February/March 2014; contracts signed by suppliers – August 2014; and submitting an outline of the project to FERC (pre-filing) – September 2014, with the aim of beginning clearing brush and trees from the route by January 2017 and starting to ship gas to consumers after November 2018. Already along the pipeline route, affected landowners are receiving letters from the TGP subcontractor, The NLS Group, seeking permission for surveys.
At least TGP has the honesty to admit that a booster compressor is necessary, unlike Williams. Also they are clear that possible users of this gas could be “developers of liquefied natural gas (“LNG”) projects in New England and Atlantic Canada,” unlike Williams.
Once a utility corridor is established, it is easier to co-locate more utilities along it. But here we have an adjacent easement being proposed before the first is even certified by FERC.
What does this portend for our future?
Almost six years ago, our state government made it practical for large drilling and fracking operations to begin in New York. None have, as of yet.
Back in 2008, the Department of Environmental Conservation slipped through the legislature a seemingly inconsequential bill. It amended the list of spacing-units for oil and gas drilling in New York to include units for shales, thereby enabling drilling into shales without a hearing to set the individual unit size for each well. This bill was not on the DEC’s list of legislative goals for the year, and no hearings were held about it. Instead, the bill was introduced in the rush of legislation at the end of session, and passed both houses overwhelmingly.
Some legislators said they voted for it assuming that since the bill was presented by the DEC, it was pro-environment. Afterwards, legislators heard from unhappy constituents. Before Governor Paterson could sign the bill, the Assembly liaison to DEC (Lupardo) scheduled public meetings on the topic.
At the first meeting, in the town of Chenango, Broome County, the state was represented by Division of Mineral Resource’s regional supervisor (Collart) with other representatives from the Farm Bureau and Susquehanna River Basin Commission. Even before the standard Division slide show was over, the panel was bombarded by questions. They were unable to offer satisfactory answers.
The next night in Greene, Chenango County, the panel was replaced by heavy hitters from Albany: the director of Bureau of Oil and Gas for DMR (Dahl), the deputy commissioner of DEC (Gruskin), and the chief environmental advisor to the Governor (Enck) — but with similar results. The uproar convinced Paterson that there were too many unknowns to permit this new form of drilling combined with high-volume hydraulic fracturing (HVHF). As a compromise, the Governor signed the bill but required that a Supplemental Generic Environmental Impact Statement would be written before drilling and fracking could begin. At the time (July 2008), the completion of this SGEIS was expected to take less than a year.
Had the DEC waited to prepare even a minimal SGEIS before the spacings bill was passed, questions could have been answered and drilling could have begun following the signing. Instead, after more than half a decade, there is no certainty if or when the moratorium will be lifted.
After a draft scoping document and public hearing, a first draft of the SGEIS itself was released in September of 2009, occasioning a barrage of criticism. Over 13,000 comments were submitted — far surpassing the 204 comments received by the 1988 draft GEIS, the first guide to environmentally safe drilling. The administration decided that a second draft was required.
When Andrew Cuomo became governor in January of 2011, the revised draft was still not released – two years after the first draft and three after the start of the moratorium. While Cuomo signed an executive order to continue the moratorium on HVHF, he required the speedy completion of the SGEIS by July. Most of the revised draft was released by his deadline, but a cumulative impact appendix was not added until September of that year.
Public comments were taken on the revised draft, both at hearings and in writing. The response was even greater. Over 60,000 comments were received, most of them critical of drilling. Apparently this made an impression, as did the frequent public protests.
So time passed with no obvious progress. Because of a statutory deadline, in November of 2012 a series of regulations were proposed to implement some guidelines of the SGEIS, even before those guidelines had been finalized. But after much criticism and over 200,000 comments (mostly opposed), those proposed regulations were withdrawn.
Repeatedly, the Governor has missed his own deadlines for deciding whether or not to allow HVHF in New York. For the last year or so, he has claimed to be waiting on a review by the state health commissioner Shah. His indecision may have more to do with public ambivalence about fracking. For years, Quinnipiac and Sienna opinion polls have been closely divided on the question of drilling, though recently there has been a slight plurality opposed.
The prospects for drilling in New York are nowhere near as promising as in Pennsylvania. Yet pro-drilling groups have hyped the potential from the start, including leasing coalitions such as Joint Landowners Coalition NY, industry groups such as Independent Oil & Gas Association-NY, and government agencies such as the NYS Division of Mineral Resources. Although this agency has the primary responsibility for oversight of the oil and gas industry in New York, the DMR is essentially an industrial development agency, required by law to maximize production and minimize product left in the ground.
While their hyping of the prospects built a groundswell of support for drilling, it has had the unintended consequence of building an even more vocal opposition. As a result, New York is the only state that has a moratorium in place while the environmental impacts of HVHF are being evaluated. Had it been public knowledge from the start that shale gas prospects are few in the Catskills and the Finger Lakes regions, there would likely be drilling right now along the border with Pennsylvania.
Ironically, the pro-drilling faction bears much of the responsibility for the moratorium. Their earlier, short-sighted attempt to expedite horizontal drilling and HVHF by forgoing an SGEIS prior to enabling legislation led to the moratorium. Under Cuomo, their hyping the prospects of drilling rallied the opposition, encouraging the endless delaying of his decision, thus extending the moratorium. Otherwise, this sort of drilling might have begun in New York years ago.
For fiscal year 2014/15, the state budget has no funds to begin regulating shale drilling, and the Commissioner of DEC has indicated that issuing the necessary permits is “highly unlikely” in the next fiscal year – in other words, not until after the next election for governor.
But just last month, the Joint Landowners’ Coalition of New York and some land owners have petitioned the state under Article 78 of Civil Practice Law and Rules to (among other things) force release of the SGEIS and issuance of the Findings Statement – the final steps in the SGEIS process. Still, with appeals likely, the final judicial decision may come no sooner than the governor’s.
And what might Cuomo’s decision on the HVHF eventually be? He has presidential ambitions and like most mainline Democrats, strongly supports the use of natural gas. In his draft New York Energy Plan (2014); Volume 2, Sources; Chapter 2, Natural Gas Report, New York Production Forecast, he writes: “As shown in Figure 32, the State’s annual natural gas production was expected to more than triple to about 115 Bcf in 2035. However, this forecast is predicated on the ability to produce from New York’s shale reserves.”
by Jerry Acton and Brian Brock
Future production of shale gas from Marcellus wells in New York has been hyped by industry lobbyists, leasing coalitions, and the Division of Mineral Resources (DMN). In reality, the producing region would be small and production modest.
Four features of the shale largely control gas production within the Marcellus: organic content, maximum temperature, thickness, and depth.
For shale gas to have been created, there must have been source material and it must have been heated enough – but not too much.
As shale is heated, organic matter breaks down to kerogen, kerogen to oil, oil to methane, and finally methane to carbon dioxide and water.
For most of the Southern Tier, the Marcellus had enough organic matter to create gas and was heated enough to yield methane. However, beneath the Catskills and some surrounding regions, the shale is barren and over-cooked.
For there to be enough gas to be profitably produced, the shale layer must be thick enough and deep enough.
Where the shale is thickest, there is the most rock to drain gas from. Where the shale is deepest, the most gas is squeezed into the natural spaces. Also, the maximum difference in pressure is there (between the rock and the well) to push the gas out of the shale.
Just across the border in Pennsylvania, thousands of horizontal shale wells have been drilled during the last few years. Results in PA’s Northern Tier can tell us about the prospects for gas production here in the Southern Tier.
We compared production in each town with the underlying geology of the Marcellus Shale. Production is greatest in the “sweet spot,” where the counties of Susquehanna, Bradford, and Wyoming meet. There the shale layer is thick and deep.
Away from the sweet spot, production drops off sharply as the shale layer thins and shallows. Production depends on the volume of shale fracked, which decreases with the square of the thickness. Production also depends on the depth of shale, and falls to zero as the shale layer reaches the surface where the pressure is zero.
For example, the shale in Franklin is a third as thick as in the sweet spot (100’ vs. 300’), meaning there is one ninth the volume of rock to be fracked. In addition, the shale layer here is half as deep as in the sweet spot (3,500’ vs. 7,000’), meaning pressure differential is half as great. The result is that production in Franklin would be one eighteenth (1/9 x 1/2) of that in the sweet spot, i.e. only five percent.
Looking at the whole of the Southern Tier, production would be comparatively low in the vast majority of towns. Drilling would be most profitable in the border towns of Broome and Delaware counties. As you would expect, recent applications for five drilling permits by XTO (a subsidiary of Exxon) are for the adjacent towns of Sanford, in Broome County and Deposit, in Delaware County.
Should gas prices rise, we expect that the fairway for drilling (i.e. where drilling would be profitable) would expand further into the border towns of Chemung and Tioga counties, as well as to additional towns in Broome and Delaware.
These results should not come as a surprise because academia and industry have been forecasting fairways of a similar extent since the Marcellus boom began. However, in the Supplemental Generic Environmental Impact Statement, the DMN has spread confusion by depicting the Marcellus fairway as including the whole of the eastern half of the Southern Tier, all the way to where the shale breaks the surface in visible outcroppings.
A low potential for production does not guarantee that there will be no drilling in a county. Small operators are incurable optimists. In the Northern Tier of Pennsylvania, counties with low potential such as Potter and McKean now have dozens of horizontal wells – despite every well being a low producer.
Costs of drilling could be substantial to people and towns. But outside of the fairways, the benefits of drilling from royalties could be meager. The only way a town can guarantee control of the costs of drilling is by exercising its home rule powers through local zoning.
State-wide comprehensive regulation, rigorously enforced, could reduce costs – although not eliminate them. But after five years of moratorium, we are no closer to either. Regulations were proposed and then dropped. (The DMN is operating with regulations codified in the 1970s, with none resulting from the GEIS.)
The governor’s Advisory Committee on Hydraulic Fracturing, which is to plan for the practical details of financing and staffing, has not met in almost two years. And while the industry talks of “safe and responsible drilling,” it works relentlessly to avoid safe regulations and taking responsibility for the consequences of its actions.
MORE POWER TO BYPASS FRANKLIN
In October of 2012, Governor Cuomo’s task force proposed the Energy Highway Blueprint, which includes the goal of increasing transmission capacity from upstate to downstate by a thousand megawatts. In part, this would be necessary to replace power from the two remaining operating nuclear reactors at the Indian Point Energy Center, should they be shut down.
At the end of November 2012, the Public Service Commission requested proposals from developers and transmission owners. By the deadline at the end of January 2013, six companies had submitted Statements of Intent, which included sixteen projects with some duplication. The PSC found worthy projects from four: North America Transmission (NAT), New York Transco, NextEra Energy Transmission, and Boundless Energy NE.
The November request identified congested AC transmission corridors west to east in the Mohawk Valley (Porter to Rotterdam, Marcy to New Scotland, and Edic to New Scotland) and north to south in the Hudson Valley (New Scotland to Leeds to Pleasant Valley).
Edic to Fraser:
In addition, for northwest to southeast transmission along the Catskill route, NAT proposed a second 345 kV line adjacent to the existing Marcy South line. Their Statement of Intent is notable at being detailed, with as many pages as the other five combined. This company is a wholly owned subsidiary of LS Power, an employee-owned power company founded in 1990 and based in St. Lewis, Missouri.
By June, when the PSC sent a letter to local governments, this Catskill corridor had been added to the projects map.
The deadline for developers to submit application materials, scoping documents, and proposed schedule was October 1st.
A week or two before, NAT published a public notice of this Catskill project in local daily and weekly newspapers. The EF2 project would run overhead 345 kV transmission lines 78 miles from Utica to Delhi between substations in Edic, Oneida County and Fraser, Delaware County. This would require second easements on the eastern side of the existing easements, an additional 160 feet of width. Most of the support towers would be pre-stresses spun concrete monopoles, typically 130 feet high. Options would allow double circuiting to double capacity.
At this time, this is only one of many proposals before the PSC, but NAT’s is the only one for this Catskill corridor. Documents for the Edic to Fraser project are filed on the commission website dps.ny.gov under case 13-T-0454.
Oakdale to Fraser:
In a second addition to the program, for west to east transmission along a Southern Tier route, Transco’s Statement of Interest proposed an overhead 345 kV line adjacent to existing Oakdale to Fraser route. This company is a partnership of eight New York utilities.
In their October application for the same route, Nextera Energy Transmission New York, Inc. detailed a fifty-seven mile route from Binghamton to Delhi between substations in Oakdale, Broome County and Fraser, Delaware County. It would be built almost entirely within the existing right-of-way, although locally, there may be required as much as an additional 100 foot easements on the south side of existing easements. Also additional construction easements will be necessary. Like EF2, concrete monopoles would be used, but here shorter at 95 feet high. NETNY is a wholly-owned subsidiary of NextEra Energy, Inc. of Juno, Beach Florida, which was renamed from Florida Power and Light, founded in 1925.
Documents for the Oakdale/Fraser project are filed by NETNY on the commission website under case 13-T-0456.
While Transco was assigned a case number (13-T-0457), they have filed no documents on a Oakdale-Fraser project.
It is not clear that this project will be approved. In its April evaluation of Statement of Intent, the PSC concluded that “the West-East Southern Tier transmission corridor upgrades are not likely to produce the increases in transfer capacity sought.” On the other hand, NETNY judged it worth submitting their application six months later.
These two projects have in common that they end at the Fraser substation, which is two miles northwest of State Highway 10. Each company claims that upgrades would fit in the existing substation, but neither discusses the consequences if both upgrades were approved.
If EF2 is approved, procurement of easements could begin in 2015, by eminent domain if necessary. Construction is planned to begin in the summer of 2016 and transmission in late 2017. In addition to the poles and lines, there would be upgrades to both substations and construction of a new facility for series compensation somewhere along the line. Costs are estimated at $270 million.
NAT estimates that annual property taxes would include $150,000 to Franklin Central School, $190,000 to Town of Franklin, and $250,000 to Delaware County. But this is calculated only on the value of the permanent installations. On the value of the electricity through these lines (or of the gas through the Constitution pipeline), Franklin will receive not a cent.
If OF2 is approved, procurement of easements could begin in 2016, by eminent domain if necessary. Construction is planned to begin in the summer of 2017 and transmission in summer of 2018. In addition to the poles and lines, there would be upgrades to both substations. Neither costs or property taxes were estimated.
Energy infrastructure projects in a town are like the fable of the camel and the tent. The first project is like the camel talking its way into being allowed to stick his nose in the tent. Once that precedent is set, each additional encroachment is easier to get in, and you can never be sure how much you will eventually lose. In the end, the camel comes to occupy the whole, and you have been pushed outside of your own tent.