Issues for Local Government and Community Consideration April 2012 Cheaper Fuel Jobs and Training Income for Landowners Greener than Oil and Coal Revenue for Local Communities and New York State Reduced Reliance on Imported Oil/National Security Implications Vs. Impacts on Water, Public Health and Safety Infrastructure Maintenance Costs Financial Impacts and Burdens Character of the Community Advocacy and Actions Quality of Life Marcellus Shale • Finger Lakes • Southern Tier • Current focus Utica Shale • Albany to Buffalo • Includes Monroe County • Future interest • Depends upon the price of natural gas and the cost of deeper drilling Hydrofracking is a water-based process used by gas companies to extract natural gas trapped in shale formations. Shale is a fine-grained sedimentary rock formed from the compaction of silt and claysize mineral particles we commonly call “mud”. Shale (“mudstones”) has many layers and splits readily into thin pieces. Older method of drilling vertical well shafts Newer method for deep well drilling high pressure, high volume horizontal drilling in use for about a decade DRILLING MODELS Average Well Depth in the Marcellus Shale is 5,300 ft. (more than 4 times the height of the Empire State Building) Well Pad Construction Site ~ 4 to 10 wells/2.5 acre pad ~ 2 to 8 weeks to construct ~3 weeks to hydrofrack High Volume Hydraulic Fracturing (HVHF) For deep shale deposits Uses high pressure infusions of water sand chemical additives Fractures the rock to allow natural gas to flow Water, sand, and chemicals = fracking fluid; specific composition depends upon the conditions of the specific well being fractured Friction-reducing additives create “slickwater” to allow the fracturing fluids to be pumped at a higher rate and reduced pressure vs. plain water Sand allows the fractures to remain open so the gas can escape Slickwater Ratio: 98% to 99.5% water, 0.5% to 2% additives (U.S. Department of Energy) Some of the toxic and hazardous materials used in hydrofracking are known carcinogens and/or can cause other health problems in humans and animals, e.g. kerosene, benzene, toluene, ethylbenzene, xylene, and formaldehyde Low level radioactive tracers may be used in the process Flowback (wastewater) may contain other toxic and hazardous materials difficult to dispose of naturally occurring radioactive material (NORM) heavy metals and chlorides Disclosure: gas companies withheld the ingredients as proprietary information, but governmental and public demands led to disclosure. From a public health perspective, posting the contents of fracking fluid and flowback is useful but insufficient. Loopholes in federal law have excluded oil and gas companies from regulation of toxic and hazardous material. Injects propane gel under high pressure into shale instead of water Uses 90% propane and a diester phosphoric acid gelling agent for viscosity to carry chemicals and sands Propane gasifies and returns to the surface during the process, leaving the chemicals behind Recovered propane is sold or reused; propane is more expensive initially, though it can be resold. inside climate news: GasFrac No empirical analysis or scientific study yet Liquid propane is highly combustible Requires large quantities of additional but different chemicals, currently unknown Potential problems with migration of methane and other chemicals into groundwater? Heavy industrial compressors may be needed on site to re-condense returned propane for reuse initially; may contribute to air pollution Uses about one quarter the number of truck trips of water-based fracking, thus less impacts on roads, neighbors, and company costs Propane is more expensive initially, though it can be resold Landowner group has an agreement with gas drillers Is it included under the current state moratorium? Chevron tested this process—says it has economic and environmental performance potential Initially the LPG method can cost 20-40% more than water fracking, but this doesn’t include ongoing costs for HVHF water handling and disposal Further testing and study are needed. Will a NYSDEC environmental study be required? NY has a source of propane via a pipeline that runs from Pennsylvania through the heart of the Marcellus Shale in the Southern Tier en route to New England From the perspective of gas companies, the HVHF method has economic benefits, i.e. fewer wells are needed to access trapped natural gas; however, significant community concerns about negative environmental and health impacts exist. Accidents and aging of sites happen. What mitigations will matter? How will on-site accidents and aging wells impact groundwater and aquifers, surface water resources, public water systems and private well water? What about air quality from burn-off during the process, e.g. methane, and evaporation from on-site flowback storage ponds? The experience of other states is informative. Shery Vargson, Granville, PA, since June 2010 Marcellus Shale Gas Development DRILLING AND PUBLIC SAFETY Presented by Chesapeake Energy February 22, 2012, New York Association of Towns Meeting Site preparation with zero discharge: berm and decking material over 2/3 of the 2.5 acre pad Pre-drilling water testing to 4000 ft. Closed-loop system for drilling 7 layers of cement and pipe casing List of additive chemicals posted on site “Flowback“ water: recycle, storage, transportation, treatment, discharge Safe work Practices: equipment built to industry standards and routine inspections Emergency Response Plan: use third party contractor, train local first responders, 24 hour emergency contact number, Incident Command System used Reclamation: restore site surface, fill well with concrete “Brownfield” and groundwater contamination concerns not addressed Drinking Water: This issue is not just about the potential environmental, health and financial costs to communities or the perceived economic and energy benefits to individuals, our communities and the State of New York; clean, safe drinking water is about life itself. Huge Volume of Water Needed for the Process: 1.5 to 5 million gallons/well (other estimates are higher, e.g. 3 to 9 million gallons/well). Wells may be fractured up to 18 times. Pre-Drilling Testing of Public Water vs. Well Water Waste Water Treatment Capability and Capacity Seismic Activity: Infusion Wells for Disposal of Waste Water (recent earthquakes in Ohio led to new restrictions and regulations) Recycling Waste Water: Reuse in Drilling and Post Drilling Uses, e.g. brine for snow and ice control Disposal of drilling waste material in local landfills? Will this create a “brownfield” condition? Hazardous Material: Type and Volume, Public Notice (Ground Water Protection Council/Interstate Oil and Gas Compact Commission website: www.fracfocus.org now; site specific information on the New York State Department of Environmental Conservation (NYSDEC) website in the future: www.dec.ny.gov) Impact on Human and Animal Health Impact on Agriculture, e.g. the wine industry Emergency Management and Local Emergency Responder Training Traffic Congestion, Safety and Control Traffic Volume and Loaded Vehicular Weight Approximately 500 one-way trips per well for all three phases of a gas well—drilling, fracking, maintenance and disposal. With 3 to 10 wells/pad, total truck trips can run between 3,000 to 10,000. Some trucks weigh as much as 80,000 to 100,000 lbs. when fully loaded with water or sand Capacity of Current Infrastructure Road Construction and Maintenance Consider Road Use and Preservation Laws Cannot charge a fee for use of public roads, but can seek damages Establish a baseline via an engineering evaluation Consider Road Use Agreements/Contracts: voluntary negotiations to address impacts to roads; not all gas companies will enter into such agreements De-icing Material Hydrofracking Waste and Wastewater Storage, Transportation, Treatment and Disposal NORM (Naturally Occurring Radioactive Material): Comes up in the flowback; NYSDEC says more study is needed Increased Public Costs for Infrastructure/Roads and Bridges, Public Safety Services, Water, Waste Water Treatment, Landfills, Public Health Services Voluntary Road Use Agreements Some agreements provide for gas companies to construct new roads to meet vehicle weight and trip frequency demands Some agreements provide for repair of roads Impact on Property Values for Homes with Contaminated Wells/Drinking Water, and Agricultural Industries Dependent upon Clean Water State Taxing Options and Status: New York has no Severance Tax Property Tax Implications Taxes Paid by Landowners Taxes or Other Payments by Gas and Drilling Companies Tax Abatements and Exemptions from IDAs ? Compulsory Integration Valuation: 14,000 active wells in NYS now, “income approach” is the most applicable using a discounted rate to convert projected income. The economic unit includes everything except the land. For a copy of the presentation, visit www.tax.ny.us/research/property/valuation/ oilgas/index.html Compulsory Integration: Relates to subsurface factors, NYSDEC requires at least 60% control of property, income/expense options for landowners with and without leases, not a “taking” For more information, visit www.dec.ny.gov/energy/1594.html Residential mortgages contain a provision prohibiting hazardous activity and the release of hazardous substances. A residential property owner may be in default by merely entering into a drilling lease. People who have signed oil and gas leases may find it more difficult to borrow against the property--for a second mortgage, to refinance loans, or to purchase property that is subject to a gas lease. If a buyer cannot get a mortgage and the seller cannot sell the property otherwise, then the property value would likely decrease significantly, impacting personal equity and property tax revenues. US Department of Agriculture: the rural loans program may no longer finance homes with gas leases, and the NYDOA is now considering requiring an extensive environmental review before issuing mortgages to people who have leased their land for oil and gas drilling. Low cost natural gas and gasoline in the USA compared with much higher costs in Europe and Asia US Department of Energy has approved exporting natural gas to Europe and Asia via new pipelines to terminals on the Gulf Coast and East Coast. Companies outside of the USA are acquiring US natural gas companies or shares of companies, increasing international control of our natural gas resources. Domestic and foreign companies will extract our natural gas and sell the product abroad at a higher profit, but we won’t achieve the shift to greener energy we seek in the USA. An “all of the above” transition makes sense now (if natural gas can be extracted safely), but neither that nor “drill baby drill” are true energy policies. The USA needs to become more self reliant and use clean, sustainable energy resources, e.g. solar and wind, in the interest of our economy, national security, and environmental safety and health. NYS needs to have an energy policy as it relates to taxation, subsidies, regulations, monitoring and enforcement, local considerations, etc. Trucks, buses, and other large vehicles have the physical space to hold CNG tanks Cars are already designed for CNG No current distribution system exists in the U.S.A. CNG fueling stations will need to be installed across the country. There is no national policy to facilitate this transition. Zoning Laws Comprehensive Plans Environmental Protection Overlay Districts (EPODs) Citizen Participation NYSDEC Consideration During Permit Application Reviews Water Resources Traffic Congestion Local Jobs Accommodations for Out-of-area Workers Training of Local Residents – Community Colleges, other Timeline for Construction of Drilling Sites (about 4 to 6 weeks) Site Maintenance Percentage of Wells That Are Productive Lifespan of Wells (20-30 years), Closure, and Mitigation Measures NYS Supreme Court Decisions on Home Rule vs. Preemption Anschutz Exploration Corporation v. Town of Dryden* Cooperstown Holstein Corporation v. Town of Middlefield Both ruled in favor of municipal Home Rule, i.e. “…local governments may exercise their powers to regulate land use to determine where within their borders gas drilling may or may not take place, while DEC regulates all technical operational matters on a consistent statewide basis in locations where operations are permitted by law.” NYS Attorney General v. US Government Complaint: Army Corps of Engineers and other federal agencies failed to commit to a full environmental review of proposed regulations in the Delaware River Basin. Response: Delaware River Basin Commission is a multi-state but not a federal agency and the EPA is studying the possible impact of hydrofracking on water quality. Result: No court decision has been made at this time. The draft Supplemental Generic Environmental Impact Statement (dSGEIS) has many deficiencies, and the NYSDEC is currently reviewing more than 61,000 comments. The draft SGEIS: DOES NOT prohibit the use of toxic and carcinogenic chemicals in the fracking process; DOES NOT prohibit drilling in or around all aquifers in order to protect everyone’s drinking water; DOES NOT contain a health impact assessment; DOES NOT have a comprehensive cumulative impact analysis but, instead, only looks at impacts on a well pad-by-well pad basis; DOES NOT look at pipeline and compressor station impacts; DOES NOT protect drinking water infrastructure; DOES NOT close the hazardous waste loophole, which allows hazardous fracking waste to be sent to our ill-equipped sewage treatment plants and municipal landfills; DOES NOT prohibit spreading fracking wastes on roads; DOES NOT address the potential for seismic impacts; DOES NOT consider mortgage lending impacts on properties with drilling leases; and DOES NOT respect local zoning (but NYS Supreme Courts have ruled in favor of Home Rule for land use decisions Said propane fracking was “not mature enough” to support drilling in New York; will review when NYSDEC gets a proposal Supplemental Generic Environmental Impact Statement (SGEIS): following review of approximately 61,000 comments, the FGEIS (final statement) will be issued and Findings made NYSDEC regulates activity: high volume, horizontal drilling, large well pads Will apply to all such activity, including the Marcellus Shale and Utica Shale Concerns: well pads crowded with people, large amount of water used, industrial activity; water contamination, ecosystems and wildlife, air quality, greenhouse gas emissions, naturally occurring radioactive material (NORM) Will local governments be able to do their own environmental review (EIS)? NO, but NYSDEC will include local input in decision making on permits Mitigation and conditions: Storm Water Regulations; Road Use Agreements; pad setbacks; supplemental permit conditions; no water contamination; not in flood plains, New York City and Syracuse watersheds, state lands (local governments will decide if they wish to allow leases local public lands) Spreading of brine for snow and ice control can’t be done without further study re: chemicals and NORM Community Character: NYSDEC will use a consultation procedure for local governments to advise on this aspect, and based upon the advice, NYSDEC will slow down the permitting process on certain applications Anticipate a NYSDEC decision in 2012; April 1, 2012? Extend the moratorium until further studies can prove that HVHF can be done safely NYS Legislature and Governor – legislation on local control (yea or nay) Funding for NYSDEC staffing to review permit applications, monitor projects, and enforce regulations Enforcement penalties for violations, damages – to the state, to local governments, to individuals Municipal Perspective: Post roads – local law based upon existing authority, can deal with weight but not frequency Voluntary agreements – build in mitigation measures via NYSDEC and local conditions, but is subject to voluntary negotiations Local Road Use and Preservation Laws – regulates all traffic that can damage roads, but consider Home Builders lawsuit, should have an engineering baseline Zoning re: gas drilling – recent lawsuits favor municipal Home Rule General zoning – statutory authority, NYS legislative history of not preempting local Home Rule, Comprehensive Plans have standing, Court of Appeals said land use decisions override business operations via zoning, police powers support Home Rule, can have local laws that apply generally to all and only incidentally impinge on a particular industry, e.g. gas NYSDEC permitting process – send panel concerns now Industry Perspective: Local governments have authority over roads, property tax, and general applicability, but not specific preemption for gas and oil. Exercise and Protect Home Rule Authority Hold Informational Meetings and Public Hearings Enact a Moratorium: allows time for study and to decide what actions may be needed to protect the community in the future; more effective if a moratorium is enacted before NYSDEC issues permits Consider Amending the Zoning Code and Other Local Land Use Regulations, and/or banning Hydraulic Fracturing and Related Activities Enter into Voluntary Road Use Agreements/Contracts with Gas and Drilling Companies Require Letters of Credit, Bonds, or Escrow Accounts Create or Update Comprehensive Plans Adopt or Update Zoning Laws Designate Environmental Protection Overlay Districts Adopt Road Use Protection Laws Draft State Regulations may allow local government input regarding Local Laws, Comprehensive Plans, and Other Specific Impacts to the Community Character, Quality of Life, and Municipal and School District Budgets. The NYSDEC would review and may approve, deny, require supplemental environmental review, and/or condition the permit. The proposed State Regulations would not allow local environmental review of specific applications. Consider Decision-Maker Conflicts of Interest SAMPLE MORATORIUM RESOLUTION At a Town Board Meeting of the Town of Brighton, Monroe County, New York, held at the Brighton Town Hall, 2300 Elmwood Avenue, in said Town of Brighton on the 28th day of December, 2011. PRESENT: SANDRA L. FRANKEL, Supervisor RAYMOND J. TIERNEY III LOUISE NOVROS SHEILA A. GADDIS Councilpersons _____________________________ WHEREAS, the Town Board duly scheduled a Public Hearing to be held on the 28th day of December 2011 at 7:30 p.m., to consider the adoption of a proposed Local Law of 2011 entitled “Hydraulic Fracturing and Related Activities Moratorium Local Law” for the Town of Brighton, Monroe County, New York; and WHEREAS, such public hearing was duly called and held and all persons having an interest in the matter having had an opportunity to be heard; and WHEREAS, the adoption of a moratorium is a Type II action under the State Environmental Quality Review Act; and WHEREAS, based on the testimony and materials received at the public hearing, the Town Board deems it necessary and advisable to adopt the proposed Local Law. NOW, THEREFORE, _______________________, on motion of Councilperson ____________________, seconded by Councilperson BE IT RESOLVED, that the Town Board of the Town of Brighton, pursuant to the provisions of Article 3 of the Municipal Home Rule Law of the State of New York, hereby adopts the Local Law of 2011 entitled “Hydraulic Fracturing and Related Activities Moratorium Local Law” as attached hereto as Exhibit “A”, for the Town of Brighton, Monroe County, New York. Dated: December 28, 2011 Sandra L. Frankel, Supervisor James R. Vogel, Councilman Raymond J. Tierney III, Councilman Louise Novros, Councilperson Sheila A. Gaddis, Councilperson Voting Voting Voting Voting Voting ____ ____ ____ ____ ____ Establish or update zoning laws that control land use, including heavy industrial activity, mining, and related uses; this could be a double-edged sword depending upon other industrial uses and types of mining that may be desired by the community Consider Incentive Zoning as a component of your local Zoning Code to provide flexibility and negotiation LOCAL LAW of 2011 TOWN OF BRIGHTON HYDRAULIC FRACTURING AND RELATED ACTIVITES MORATORIUM LOCAL LAW Section 1. Title This Local Law shall be known as the Hydraulic Fracturing and Related Activities Moratorium Local Law of the Town of Brighton. Section 2. Purpose While hydraulic fracturing and directional gas drilling are not currently permitted uses in any zoning district in the Town of Brighton, the Town Board desires to take further steps to ensure that neither hydraulic fracturing directional gas drilling nor any ancillary or related uses or activities take place within the Town, pending review, drafting and adoption of Town Code provisions relevant to such activities. Serious health and environmental impacts caused by these uses could threaten the health of the residents in the Town, could require the use of massive amounts of water, or the transportation of massive amounts of water causing impact to Town highways and could cause other aesthetic, environmental and public health impacts, resulting in the degradation of the quality of life in the Town of Brighton and the Town’s infrastructure. It is the purpose of this local law to enable the Town to have sufficient time to consider, draft and enact a local law or laws relating to hydraulic fracturing, directional gas drilling and related or ancillary uses to avoid such negative impact within the Town of Brighton. SAMPLE MORATORIUM LAW (cont.) Section 3. Moratorium The Town Board hereby enacts a Moratorium which shall prohibit the review of any application, the grant of any approval or permit, the issuance of any use or area variance, the grant of any preliminary or final site plan or subdivision approval, and/or the issuance of any other Town approval or permit relating to any wells involving the practices involving of directional gas drilling or hydraulic fracturing, or any use, business or project involving the storage or vehicular transport of water to be used for hydraulic fracturing or any hydraulic fracturing fluids or waste materials on, over, or about any real property within the Town. Section 4. Supersession of Provisions of State Law This Local Law is enacted pursuant to Section 10 of the Municipal Home Rule Law, and under section 22 of such Law, is intended to supersede Sections 261-a, 264, 267, 267-a, 267-b, 273, 274-a, 274-b, 276, 277, 278, 279, 280 and 280a, as well as all inconsistent provisions of the Town of Brighton Code or Town ordinances. Section 5. Term of Moratorium This Local Law and the Moratorium established hereunder, shall expire one year from its effective date. Section 6. Effective Date This Local Law shall take effect immediately upon filing with the Secretary of State. Section 7. Severability If any clause, sentence, phrase, paragraph or any part of this Local Law shall for any reason be adjudicated finally by a court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder of this Local Law, but shall be confined in its operation and effect to the clause, sentence, phrase, paragraph or part thereof, directly involved in the controversy or action in which such judgment shall have been rendered. It is hereby declared to be the legislative intent that the remainder of this Local Law would have been adopted had any such provision been excluded. Be sensitive to the competing interests related to hydraulic fracturing: boom or boondoggle? Thus far, court decisions have supported municipal Home Rule, but this may just be the beginning. Legal appeals, “takings” claims, or new state legislation make affect the NYS Supreme Court decisions. Once the NYSDEC issues permits, if they do, local governments may not have standing to oppose a permit if no moratorium, ban, or other police power of the government has been adopted. Other legal and financial exposures Educate decision makers and the community Advocate with local representatives one-onone and at public meetings and public hearings Collect petitions for submission to the local governing board and state representatives: formal, informal Local citizens should speak and write directly to their own representatives…power of the voters (e.g. Town of Caroline) Bring in outside expert speakers as well as people with first hand experience Remember that one size doesn’t fit all Consider the impact on property taxes and municipal and school district services under the NYS Property Tax Cap as costs for road maintenance , public safety services, water and waste water treatment, etc. increase as a result of hydrofracking activity Consider the impact on local property values for homes with contaminated wells/drinking water Monitor mortgage lending practices for properties with gas leases; keep elected officials apprised of changes that may affect property values and property tax revenues Create or update the Comprehensive Plan; a Moratorium can be used for this purpose too Encourage identification of environmentally sensitive areas and advocate the creation of Environmental Protection Overlay Districts If NYS ultimately permits hydrofracking, local governments will be notified of the application. Your local officials can respond in detail to the NYSDEC’s review of applications for drilling permits. Local conditions and concerns may be factored into the DEC’s decision to approve, deny, supplement the environmental review, or condition the permit. Find community partners and build coalitions Use informal petitions to make a point Use social media to send succinct messages to local representatives, and to organize or remind citizens of meetings: Facebook, Twitter, You Tube, websites, Internet links, etc. Attend board meetings in force, use the Open Forum to inform and express perspectives; submit comments in writing and ask that they be entered into the record of the public meeting Use the media – they are often short staffed and appreciate ideas and information brought to them by the public Alert to upcoming meetings, send press releases, hold press conferences, write letters-to-the-editor and guest editorials, use Public Access Television if your community has this service A F E W R E F E R E N C E S www.R-CAUSE.NET – website provides links to many articles and references The Ithaca Times: http://www.ithaca.com/news/dryden/article_0eb2bd4e- 91f6-11e08235-001cc4c03286.html NY Times: Rush to Drill for Natural Gas Creates Conflicts with Mortgages: http://www.nytimes.com/2011/10/20/us/rush-to-drill-forgas-creates-mortgage-conflicts.html www.cedclaw.org www.dec.ny.gov\LegalEducationWorkshop5@yahoo.com MDineen39@gmail.com and JanQ99@gmail.com Potential Health Impacts: www.newyork.sierraclub.org/Cancerspecialistswarnoffrackingrisk s.htm “Gasland” film Dimock, PA: http://laurensjournalonfracking.tumblr.com/post/17439436784/day-1-part-1dimock#notes, http://laurensjournalonfracking.tumblr.com/post/17439463758/day-1-part-2carter-road#notes, http://laurensjournalonfracking.tumblr.com http://www.rsc.org/chemistryworld/News/2011/November/15111102.asp http://insideclimatenews.org/news/20111104/gasfrac-propane-natural-gasdrilling-hydraulic-fracturing-fracking-drinking-water-marcellus-shalenew-york http://www.pressconnects.com/article/20120329/NEWS11/120329011/Propan e-fracking-deal-reached-NY-Plan-would-open-130-000-acres-Tioga-Countydrilling http://www.catskillmountainkeeper.org/fracking-with-liquid-propane-gas/ http://www.naturalgas.org/overview/background.asp http://automobiles.honda.com/shop/civic-naturalgas.aspx?ef_id=IANPGk6brG4AAAk9:20120413042442:s Presented by SANDRA L. FRANKEL Former Supervisor Town of Brighton (Monroe County) New York February, 2012 frankel@rochester.rr.com (585) 473-5872 (585) 733-3442 (cell) (585) 244-1923 (fax) Town of Brighton www.townofbrighton.org (585) 784-5250 (585) 784-5373 (fax)