Natural Gas Development Presents a Solution to Combating New York's Economic Distress

ALBANY, NY (02/28/2011)(readMedia)-- As the State Senate considers the confirmation of a new commissioner at the Department of Environmental Conservation (DEC), and Governor Cuomo and the Legislature strive to identify budget-balancing solutions for our state, New York's oil and gas industry offers a realistic solution: Natural gas development in New York's Southern Tier.

"Our state is at a crossroads," said Brad Gill, executive director of the Independent Oil & Gas Association of New York (IOGA of NY). "New York's problem is clear: Outward migration of our best and brightest young citizens; the highest taxes in the nation; shuttered businesses throughout the state; sky-rocketing energy costs; and job losses in the tens of thousands. The viable solution and an element of the state recovery is under our feet in the form of natural gas."

New York is home to one of the largest natural gas fields in the world. States currently developing similar reserves are experiencing vast increases in tax revenue, employment, business growth, educational and training opportunities, and entrepreneurial activity. According to a 2010 study conducted at Pennsylvania State University, natural gas development will help create 212,000 non-subsidized jobs over the next decade.

Further, researchers associated with the American Petroleum Institute reference that in 2009, 1,121 wells drilled in Pennsylvania and West Virginia yielded a gross regional product of $4.8 billion, $1.7 billion in local state and federal tax revenue and 57,357 jobs.

The association asks Commissioner designate Joseph Martens, the Legislature and Governor Cuomo to consider the potential economic impact and at the conclusion of the Department's environmental review of the processes associated with capturing natural gas, and to move swiftly to capitalize on an opportunity that advances energy independence and economic growth.

Natural gas exploration in areas such as Broome, Tioga and Chemung counties has been on hold for more than three years. During this time, a debate has centered on the process of hydraulic fracturing – a sound technique used to release natural gas embedded from rock formations.

Hydraulic fracturing has been used on 1.1 million wells nationwide over the past 60 years without a single case of groundwater contamination stemming from the use of fluids, and in 2009, the DEC approved nearly 600 requests for permits to use this scientifically proven technique.

"In the Northern Tier of Pennsylvania, colleges and vocational schools are adding courses in response to the demand for chemical engineers, pipe-fitters, truck drivers and more. Restaurants and hotels are full and busy," Gill said. "Pennsylvania landowners are securing the future while landowners in the Southern Tier are losing their farms due to foreclosure."

A number of recent studies support the assertions made by Gill:

  • A 2010 Petro Enterprises study concluded that economic benefit in New York would amount to about $92 billion over a 30-year period;
  • Economists at West Virginia University indicate that nearly $298 million in wages and 7,600 jobs were created during a eight year period beginning in 2001; and
  • New York State data indicates that the impact of 300 horizontal wells would result in $1.4 billion in regional economic activity.

IOGA of NY, representing more than 400 individuals and companies engaged in the oil and natural gas industry, promotes the common interests of its members who represent all industry sectors. IOGA of NY members and are committed to operating safely, efficiently, and with great care and stewardship for the state's natural resources. IOGA of NY and its members strive to educate the public about the positive impacts the oil and gas industry has had – and will continue to have – on New York's economy and quality of life.