Energy

Fracking in New York Faces Death by a Thousand Local Bans


Anti-fracking protesters at the auditorium before New York Gov. Andrew Cuomo gives his State of the State address on Jan. 8

Photograph by Spencer Platt/Getty Images

Anti-fracking protesters at the auditorium before New York Gov. Andrew Cuomo gives his State of the State address on Jan. 8

New York Governor Andrew Cuomo inherited a statewide moratorium on fracking when he took office, and he’s spent the past three years deciding whether to lift the ban. But whichever decision he makes won’t have nearly the same weight now that the state’s highest court has ruled that cities and towns can block fracking inside their borders.

Fracking is already outlawed in many places across the U.S. But unlike in Vermont, for example, which became the first state to ban fracking in 2012, New York’s action is important because the state actually has something worth fracking. With the Marcellus Shale formation in the southern portion of the state, New York has some of the richest natural gas deposits in the nation. Estimates suggest the stuff trapped under the Empire State would be enough to meet total U.S. consumption for six years. Vermont, on the other hand, has almost no natural gas; the ban there is purely a political statement.

New York has been slow to exploit its rich natural gas depositsMarcellusshales.comNew York has been slow to exploit its rich natural gas deposits

The Marcellus Shale stretches across a number of states, but the story of its development is starkly different in each one. In Pennsylvania, natural gas production has risen by more than 1,000 percent since 2008, the largest gain of any state.

Pennsylvania produced 2.2 billion cubic feet of natural gas in 2012Energy Information AgencyPennsylvania produced 2.2 billion cubic feet of natural gas in 2012

Across the border in New York, however, production has stalled since peaking in 2006. By 2012, New York’s natural gas production had been cut in half.

New York’s fracking ban has stalled the state’s natural gas productionEnergy Information AgencyNew York’s fracking ban has stalled the state’s natural gas production

Last fall one of the state’s tracking pioneers, Chesapeake Energy (CHK), began abandoning old leases it had signed in the early 2000s, often for cut-rate prices. Rather than continue battling landowners who wanted to negotiate better terms, Chesapeake decided to walk. Nine months later, that move looks pretty smart.

Democratic Senator Charles Schumer said last month that he would support Cuomo if he decided fracking could be done safely in New York. Given the new ruling, the future of fracking in the state appears to rest with local officials more than it does with the governor.

Philips_190
Philips is an associate editor for Bloomberg Businessweek in Washington. Follow him on Twitter @matthewaphilips.

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Companies Mentioned

  • CHK
    (Chesapeake Energy Corp)
    • $24.77 USD
    • -0.58
    • -2.34%
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