Tag: dimock pa

Sportsman Danchak Comments at Breathing Is Political

Posted on by Liz

When public figures participate in a public debate  about an issue  whose outcome will impact future generations living in the Delaware River Basin, it’s imperative that the  debate be a reasoned dialogue, not an exchange of demagogic slogans.

Mr. Jack  Danchak is  a well-known local columnist, sportsman and businessman respected for his  acumen.  In a recent opinion piece (“Can We Afford to Ignore Natural Gas?”)  he stated,  “We traveled to Dimick, Pa, [sic] recently, where there are several working natural gas wells and after talking to people from this town, we did not hear a single negative factor.”

Breathing responded to a similar statement by  William Eschenberg (The Town of Delaware’s Highway Superintendent):

In contrast,   after a trip to  Dimock during  this past winter,  Breathing reported, “Throughout  Dimock, signs of poverty are  clearly visible and  the state of  dirt roads traveled by heavy drilling trucks was impossible to ignore.  Ruts were so deep and continuous that   humps as high as 8-9″ threatened  the under carriages of low-riding vehicles and, in part,  may have prompted  the Mayor’s question in Callicoon… about the state of our  local roads.”  (Mayor Tillman’s description of the gas industry’s  economic and environmental impacts on his town of DISH, Texas is available here.)

The  Breathing article  describing what we saw in Dimock also included an interview with Patricia Farnelli who is a Dimock lessor and plaintiff in a federal lawsuit against gas extractor, Cabot Oil. In part,  Ms. Farnelli  told Breathing that,  when her children “drank water from the family well,  they’d get a terrible stomach ache and throw up.  They’d just double over….they’d drink water at the school, and they’d be fine but  whenever they drank our home  water,  they’d get sick.”

Ms. Farnelli is a real person with very real concerns  about the health of her children, her water and her future in Dimock, PA.  In fact, her concerns  have been well-enough substantiated that a Federal Court has agreed to hear  her allegations and those of several of her fellow lessors.  But, if  Mr. Danchak doubts Ms. Farnelli,  he can view  these videos from Dimock, PA.  Additionally, PBS’ interview of  Josh Fox has already aired and the  filmmaker’s  documentary,  “Gasland,”  will be  on HBO soon.  All are  available for viewing by anyone interested in more than the industry’s talking points.

At the most recent Town of Delaware Board meeting, Mr. Noel Van Swol stated, “Hydraulic fracturing  has  been around since the 1940s,”  and quoted  Mr. Danchak  as having said,  “…there have been more than one million  wells fracked in the US and not one  serious instance of  trouble.”  (Mr. Van Swol’s  historic facts   about the current gas extraction technology have   been disputed by  a gas industry publication,  The Permian Basin Petroleum Association Magazine,    “…when Devon Energy Corporation acquired Mitchell Energy in 2002, it drilled down vertically to the Barnett Shale, turned the drill bit, and continued drilling horizontally…. The combination of the water fracs and horizontal drilling revolutionized the unconventional shale gas play.”)

So, although Mr. Van Swol’s correct  that “fracking” has been around since the 1940′s, the  new slick water, high pressure,  horizontal hydraulic fracturing  technology proposed for New York (and used in Dimock)  was pioneered,  according to the gas extraction industry,  a bare eight years ago.  Reports of  accidents and contamination in Dimock, Pa.,   DISH, Tx.,  Pavillion, Wy.,  and other areas,  contradict assertions  by Mr. Danchak and Mr. Van Swol  that  “not one serious instance of trouble”  has been caused by the  technology.

Within the last day or so,  Mr. Danchak wrote  at Breathing (#7   following Breathing’s re-cap of the 4/21/10  Town of Delaware Board meeting), “Sullivan County Government owns almost 2,000 acres of land, our county stands to get millions from responsible gas drilling and it couldn’t come at a more appropriate time! Remember this county land is owned by us taxpayers, the people of Sullivan County would benefit not just individual landowners!  What are we waiting for, “Drill Baby Drill”!

Certainly one of  Breathing’s concerns has been  assertions by  pro-drilling interests that gas drilling  will benefit our local economies and especially, our farmers.

What has not been provided by Mr. Danchak and other drilling advocates  is a  review of the potential costs associated with gas extraction and slick water, high-pressure,  horizontal hydraulic fracturing.

Neither have pro-drilling advocates  responded seriously  to claims made by Mayor Calvin Tilman concerning the deleterious economic and health  impacts of the extraction industry on the Mayor’s  small Texas community of DISH.

Nor have they responded  to

What Mr. Van Swol and others have done is cite to protections in their negotiated leases without ever making those leases public.  Unfortunately,  Mr. Van Swol and others have not explained how their alleged lease protections will protect unleased properties or  dairy cattle   poisoned by well pad leakage.   Neither have lessors and their organizations explained how their secret agreements will defend  community  ground water, soil,  aquifers or the deer so many families depend on for food.  (Breathing’s requests to review the leases have been ignored.)

As a successful businessperson, Mr. Danchak knows that  touting the benefits of an investment without a discussion of its potential costs is called a sales pitch.

Serious analyses  of an investment or endeavor  require thorough,  unblinking investigations of the downside of those investments or endeavors.  The analysis cannot rely on   publicity provided by  the salesperson or gas company  trying to sell you a product.

And certainly, our communities deserve more than demagogic slogans such as,  “Drill, Baby, Drill!”

That said, I hope Mr. Danchak will address the issues raised at Breathing with a serious  and well-documented editorial which I will publish in its entirety.

I also hope he will (if he hasn’t yet)  join Breathing and many of  its readers in supporting US Senate bill 1645, the Federal Milk Marketing Improvement Act of 2009. The bill has been endorsed by the Progressive Agriculture Organization, Pennsylvania Farmers Union, The National Family Farm Coalition, National Farmers Organization and their summary of  it can be read here.

Breathing wants to hear from farmers and  farm advocates about  the legislation. Please email   Ljbucar@earthlink.net  or  leave comments below this editorial.

If there are better bills or better suggestions for overcoming  the devastating economic realities confronting our local farmers,  we want to know.  We also want to hear how we can help ensure that   fair, decent and livable price supports are obtained by our local dairy producers.

Sportsman Danchak Comments at Breathing Is Political

Posted on by Liz

When public figures participate in a public debate  about an issue  whose outcome will impact future generations living in the Delaware River Basin, it’s imperative that the  debate be a reasoned dialogue, not an exchange of demagogic slogans.

Mr. Jack  Danchak is  a well-known local columnist, sportsman and businessman respected for his  acumen.  In a recent opinion piece (“Can We Afford to Ignore Natural Gas?”)  he stated,  “We traveled to Dimick, Pa, [sic] recently, where there are several working natural gas wells and after talking to people from this town, we did not hear a single negative factor.”

Breathing responded to a similar statement by  William Eschenberg (The Town of Delaware’s Highway Superintendent):

In contrast,   after a trip to  Dimock during  this past winter,  Breathing reported, “Throughout  Dimock, signs of poverty are  clearly visible and  the state of  dirt roads traveled by heavy drilling trucks was impossible to ignore.  Ruts were so deep and continuous that   humps as high as 8-9″ threatened  the under carriages of low-riding vehicles and, in part,  may have prompted  the Mayor’s question in Callicoon… about the state of our  local roads.”  (Mayor Tillman’s description of the gas industry’s  economic and environmental impacts on his town of DISH, Texas is available here.)

The  Breathing article  describing what we saw in Dimock also included an interview with Patricia Farnelli who is a Dimock lessor and plaintiff in a federal lawsuit against gas extractor, Cabot Oil. In part,  Ms. Farnelli  told Breathing that,  when her children “drank water from the family well,  they’d get a terrible stomach ache and throw up.  They’d just double over….they’d drink water at the school, and they’d be fine but  whenever they drank our home  water,  they’d get sick.”

Ms. Farnelli is a real person with very real concerns  about the health of her children, her water and her future in Dimock, PA.  In fact, her concerns  have been well-enough substantiated that a Federal Court has agreed to hear  her allegations and those of several of her fellow lessors.  But, if  Mr. Danchak doubts Ms. Farnelli,  he can view  these videos from Dimock, PA.  Additionally, PBS’ interview of  Josh Fox has already aired and the  filmmaker’s  documentary,  “Gasland,”  will be  on HBO soon.  All are  available for viewing by anyone interested in more than the industry’s talking points.

At the most recent Town of Delaware Board meeting, Mr. Noel Van Swol stated, “Hydraulic fracturing  has  been around since the 1940s,”  and quoted  Mr. Danchak  as having said,  “…there have been more than one million  wells fracked in the US and not one  serious instance of  trouble.”  (Mr. Van Swol’s  historic facts   about the current gas extraction technology have   been disputed by  a gas industry publication,  The Permian Basin Petroleum Association Magazine,    “…when Devon Energy Corporation acquired Mitchell Energy in 2002, it drilled down vertically to the Barnett Shale, turned the drill bit, and continued drilling horizontally…. The combination of the water fracs and horizontal drilling revolutionized the unconventional shale gas play.”)

So, although Mr. Van Swol’s correct  that “fracking” has been around since the 1940′s, the  new slick water, high pressure,  horizontal hydraulic fracturing  technology proposed for New York (and used in Dimock)  was pioneered,  according to the gas extraction industry,  a bare eight years ago.  Reports of  accidents and contamination in Dimock, Pa.,   DISH, Tx.,  Pavillion, Wy.,  and other areas,  contradict assertions  by Mr. Danchak and Mr. Van Swol  that  “not one serious instance of trouble”  has been caused by the  technology.

Within the last day or so,  Mr. Danchak wrote  at Breathing (#7   following Breathing’s re-cap of the 4/21/10  Town of Delaware Board meeting), “Sullivan County Government owns almost 2,000 acres of land, our county stands to get millions from responsible gas drilling and it couldn’t come at a more appropriate time! Remember this county land is owned by us taxpayers, the people of Sullivan County would benefit not just individual landowners!  What are we waiting for, “Drill Baby Drill”!

Certainly one of  Breathing’s concerns has been  assertions by  pro-drilling interests that gas drilling  will benefit our local economies and especially, our farmers.

What has not been provided by Mr. Danchak and other drilling advocates  is a  review of the potential costs associated with gas extraction and slick water, high-pressure,  horizontal hydraulic fracturing.

Neither have pro-drilling advocates  responded seriously  to claims made by Mayor Calvin Tilman concerning the deleterious economic and health  impacts of the extraction industry on the Mayor’s  small Texas community of DISH.

Nor have they responded  to

What Mr. Van Swol and others have done is cite to protections in their negotiated leases without ever making those leases public.  Unfortunately,  Mr. Van Swol and others have not explained how their alleged lease protections will protect unleased properties or  dairy cattle   poisoned by well pad leakage.   Neither have lessors and their organizations explained how their secret agreements will defend  community  ground water, soil,  aquifers or the deer so many families depend on for food.  (Breathing’s requests to review the leases have been ignored.)

As a successful businessperson, Mr. Danchak knows that  touting the benefits of an investment without a discussion of its potential costs is called a sales pitch.

Serious analyses  of an investment or endeavor  require thorough,  unblinking investigations of the downside of those investments or endeavors.  The analysis cannot rely on   publicity provided by  the salesperson or gas company  trying to sell you a product.

And certainly, our communities deserve more than demagogic slogans such as,  “Drill, Baby, Drill!”

That said, I hope Mr. Danchak will address the issues raised at Breathing with a serious  and well-documented editorial which I will publish in its entirety.

I also hope he will (if he hasn’t yet)  join Breathing and many of  its readers in supporting US Senate bill 1645, the Federal Milk Marketing Improvement Act of 2009. The bill has been endorsed by the Progressive Agriculture Organization, Pennsylvania Farmers Union, The National Family Farm Coalition, National Farmers Organization and their summary of  it can be read here.

Breathing wants to hear from farmers and  farm advocates about  the legislation. Please email   Ljbucar@earthlink.net  or  leave comments below this editorial.

If there are better bills or better suggestions for overcoming  the devastating economic realities confronting our local farmers,  we want to know.  We also want to hear how we can help ensure that   fair, decent and livable price supports are obtained by our local dairy producers.

Standing Room Only: Delaware Town Board: 4-21-10

Posted on by Liz

Last month, one member of the public attended  the Delaware Town Board meeting.  Last night,  attendance was standing room only.

Highway Superintendent Bill Eschenberg made an appeal to the public for patience  as he cited to reduced funding from both New York State and the federal government.  “Please remember we’re all in this together if you find yourselves driving over potholes this winter.  We’ve got no idea what will happen with our CHIPS funding.”

CHIPS is  the Consolidated Local Street and Highway Improvement Program and according to page 76 of Governor Patterson’s  Budget Briefing Book for 2010-11, “…the Executive Budget maintains the State’s core Trust Fund investment in the highway and bridge program at 2009-10 levels and also preserves funding for local highway and bridge projects under the Consolidated Highway Improvement Program (CHIPS) at prior-year levels.”   Those figures may change depending on action by the NYS Legislature.

Kara McElroy,  the Town’s Grants Coordinator,  reported,  “We met with the Rural Water Association (RWA) about our sewer plant problems and it looks as if there are several funding streams available to us for help.  We’ve had an application  with the United States Department of Agriculture (USDA)  for a long time so  the RWA met with us to suggest engineering directions we might pursue.”

Ms. McElroy also  reported that “the Town’s Community Development Grant application will be submitted this Friday and  our application for  Upper Delaware Council (UDC) funds will be sent tomorrow.”  (For more on these grants and the programs involved, please see  Breathing’s coverage of last month’s Town meeting.)

According to Ms. McElroy,  “We’ve been awarded a Category B Renaissance Grant for which the Town will be the lead agency.”  To help with the project, please email townofdelaware-ny.us

Harold Roeder,  Chair of the UDC and  the Town of Delaware’s  representative to the Council,  also spoke to the  fiscal  theme  struck by  Superintendent Bill Eschenberg by explaining that the UDC has been operating under the auspices of the National Park Service (NPS) since its inception.  “The Council was established  to protect property  rights and to protect water  quality in the Delaware River Corridor.  We get funding  from the NPS but  the amount hasn’t changed for twenty years.  That lack of increase results in less grant monies for our member townships.”

According to the UDC website,  the Council helps ensure the responsible actions of property owners through its  “…commitment to local land use controls and voluntary actions by landowners to protect the resources on their own private property, as opposed to federal ownership of the land in the river corridor.”

Ms. Ginny Boyle reported on The Callicoon Creek Park’s  recent “Work Day” which was coordinated with student volunteers from The Delaware Valley Job Corps.  She also referenced the many summer  events being planned for  The Park which include  music and art festivals,  weekly farmers’ markets  and a  May 22nd Plant Swap.  (The Park Committee’s  website and blog  will be “going live” on  or about May 1st so stay tuned for news on that.  Until then,  see notes at the end of this article for specific events and dates.  Breathing was very pleased to participate in the “Work Day”  with the  kids from Job Corps and had a great morning!)

While thanking the Town for refurbishing the Park’s entryway,  Ms. Boyle asked if funds  could be made available to replace damaged fence railings.  Although Town funds are not available, Councilperson Matt Hofer said Hofer Log and Lumber would donate whatever materials might be needed.

Councilperson John Gain reported on his tour of many of the Town’s  flooding trouble spots with  representatives of the  New York State Department of Transportation (NYSDOT),  Soil and Water Conservation and Mr. Jim Hughson,  owner of a local excavating company.  Mr. Gain described problems with rubble  under  the SR 52 bridge near Dick’s Auto Sales where the brook is seriously narrowed and several problems with culvert pipes.  “NYSDOT needs to get a digger from West Virginia that’s used to clear   rubble from coal mines but there’s no way of knowing when that will happen.  We’re facing significant erosion issues and it looks like  the pipes will have to be replaced.”

Mr. Hughson’s company, Jeff Sanitation, was awarded  a contract for the Town Clean-up Day.  (Please call  the Town Hall  at 845-887-5250  for details of that program  and another which permits residents and businesses  to dispose of electronic equipment on two separate days.)

Town Clerk, Ms. Tess McBeath  outlined steps that still need to be taken before the Town can incorporate  Farmland Protection into its Comprehensive Plan.

“The Gas Drilling Resolution,” which was tabled without comment last month,  passed this month with the removal of  an item calling for  “Inspections done by locally trained and qualified inspectors.”   According to Supervisor James Scheutzow,  the Board received a petition signed by forty residents  in support of the Resolution.  Council members Cindy Herbert, Harold Roeder and John Gain voted yes  “with reservations”  while Matt Hofer voted no and James Scheutzow voted in favor.

PUBLIC COMMENT

Mr. Matt Murphy of  the Stewart-Murphy Funeral Home asked why  Howard Fuchs, the Town’s Building Inspector,   cited him for  violations of the Americans with Disability Act (ADA) when many other Town of Delaware businesses listed by Mr. Murphy  do not provide handicap access as mandated by the law.  The Board promised to look into the matter, discuss it with Mr. Fuchs and get back to Mr. Murphy.

Mr. Roy Tedoff,  a landowner in the Town of Delaware,  described  NYS Assembly Bills 10490 and 10633.  “A10490 asks that a moratorium  be declared in NYS  until 120 days after  the Environmental Protection Agency (EPA) has issued a report on  the impacts of  gas drilling and hydraulic fracturing on drinking water.   A10633 gives Towns the right to use zoning regulations to control where drilling can take place.   This Town Board should contact the Assembly and  state the Board’s approval of the proposals.”   Supervisor Scheutow said he didn’t know about the Bills but would look into them.

Although a resident in the Town of Fremont rather than Delaware, Mr. Noel Van Swol spoke at length several times.  He is  a leading public voice on the issue of gas drilling and hydraulic fracturing.   He was also a leading opponent of  the  National Park Service’s involvement  in the Delaware River Corridor twenty years ago when  he made the  argument that local people could police themselves and keep The River safe.  Now, he and Mr. Bill Graby of the Sullivan-Delaware Property Owners Association, are  committed to drilling and hydraulic fracturing as “the only thing that will save us economically.”

In response to Mr. Tedoff’s  request that the Town support Assembly Bills  10490 and 10633,  Mr. Van Swol said,  “Those Assembly bills would further delay  drilling in New York State.  Our landowner group represents 9,215.24 leased acres in Delaware Township.  That’s more than 14 square miles.  Our organization has  to oppose the Board supporting the Bills.  Local property owners have been the silent majority while environmentalists have promoted their  hidden agenda to stop the drilling.  We’ve heard tonight of dire [economic] times and the only solution is this vital new drilling industry. New York State Senator  John Bonacic has said that upstate NY is dead.  Only  drilling can give it a heartbeat.  Hydraulic fracturing  has  been around since the 1940s.   As Jack Danchak commented recently,  there have been more than one million  wells fracked in the US and not one  serious instance of  trouble.”

Mr. Danchak  is a local sportsman who writes a regular column on fishing and hunting for the Sullivan County Democrat.  Although  he’s right that “fracking” has been around since the 1940’s, the  new slick water, high pressure,  horizontal hydraulic fracturing  technology proposed for New York and pioneered in Texas in 2002,  has some  scientists and the Environmental Protection Agency worried.

Gas extraction companies had known for years about the immense gas reserves in the Marcellus and Barnett Shales, but  there was no  viable way to remove it.  According to a gas industry publication,  The Permian Basin Petroleum Association Magazine,    “…when Devon Energy Corporation acquired Mitchell Energy in 2002, it drilled down vertically to the Barnett Shale, turned the drill bit, and continued drilling horizontally…. The combination of the water fracs and horizontal drilling revolutionized the unconventional shale gas play.”

Reports of  accidents and contamination in Dimock, Pa.,   DISH, Tx., Pavillion, Wy.,  Fort Worth, Tx  and other areas,  contradict assertions  by Mr. Danchak and Mr. Van Swol  that  “not one serious instance of trouble” has been caused by the  technology. (Milanville resident, Josh Fox, has documented some of those occurrences in his award-winning film, “Gasland.”

Mr. Van Swol continued his speech with a reference to New York’s dairy farmers who are still being paid at 1970’s  milk prices  and asked,  “What’s worse?  Some gas wells or farmers  going out of business and subdividing their properties and the environment being polluted by septic systems?”

Many family  farmers in New York  have been forced out of the dairy business due to abysmally poor pricing supports and federal underwriting of  gigantic  “factory farms”; but  people concerned with the impacts of  gas drilling have responded to Mr. Van Swol’s question in public hearings  by stating  that the carcinogens found in hydraulic fracturing fluids are not found in septic systems.

Mr. Bill Graby said, “We property owners have been working with the gas companies for almost two years. We’ve developed lease agreements that protect everyone.”

Mr. Tedoff replied, “Please make those contracts public.  We’ve been hearing about all the protections you’ve gotten,  but  all we  have is your word for it.   Until you stop keeping your leases secret, it looks like you  want to get all the gas out,  make the money and leave the rest of us so we can’t drink the  water.  Lease protections wouldn’t be so important if the gas drilling companies were regulated under The Clean Water Act.”

A new resident and professional baker,  Ms. Elizabeth Finnegan said, “I also want to encourage the Town to support the moratorium Bill.   Let the EPA do its job.  If our water, soil and animals aren’t safe,  it won’t matter what kind of money’s available for grants.”

Steve Lundgren, another Town of Delaware resident  said, “Drilling is not the only solution to our economic problems and two years is not too long to study it.  Not everyone will benefit from drilling.   I understand  the farmers’ plight but only a small number of  leaseholders  will benefit.”

“The  NYS Department of Environmental Conservation (DEC) is  responsible for protecting us,”  said Mr. Van Swol.  “If you don’t trust the State…they haven’t found problems in New York.”

The Environmental Protection Agency (EPA) has issued reports on DEC’s inspection and enforcement record which contest Mr. Van Swol’s assertion and recently, Department of Environmental Conservation (NYS DEC)  Commissioner Grannis admitted at a conference that his agency,  which oversees gas extraction, is understaffed.

(In a comment at Breathing, Jennifer Canfield, a long-time local realtor addressed one piece of the prosperity issue at Breathing by providing a list of banks  “who will not fund leased properties, based upon environmental risk, as per information gained from a mortgage broker who is still looking further into the situation:

First Place Bank
Provident Funding
GMAC
Wells Fargo (will know for sure in a few days)
FNCB
Fidelity
FHA
First Liberty
Bank of America

“A few local lenders who underwrite their own are still lending, ”  Ms. Canfield continued.  “We are trying to also get a determination from the sources at Freddie Mac, Fannie Mae and Ginnie Mae.”)

Additionally, FHA rules (Federal Housing Adminstration) state,   “No existing home may be located closer than  300 feet from an active or planned drilling site.  If an operating [gas] well is located in a single family subdivision, no new or proposed house may be built within 75 feet of the operating well.”

Another long-serving realtor, David Knudsen responded at his site, “When a property has a gas lease on it that permits use of the surface for drilling, a third party essentially has the rights to materially change the property. Environmental concerns notwithstanding, those material changes to the surface could affect the value of the property, possibly devaluing the asset that the bank has lent on. Likewise, appraisals become difficult. Any piece of real property comes with a ‘bundle of rights’ that comprise its value. A gas lease essentially severs one of those rights, gas extraction, from the real property, so it becomes difficult to determine the value of the property without that right to transfer with the real property. It makes valuation very complicated. And in this still-tight lending environment, most lenders don’t want to deal with anything complicated or with an unquantifiable risk.”

Mr. Paul Hindes, the Town of Delaware’s  representative to  the Multi-Municipal Gas Drilling Taskforce (MMTF),  explained the MMTF has been focused on creating Road Use Agreements the Taskforce hopes will provide asset protection in the event that gas drilling comes to its eight  member towns.  “We want all eight towns to have identical road use laws that take into consideration not only the weight of industrial trucks on our roads but also the weight of those trucks over a cumulative period of time.”

Bill Eschenberg,  the Town’s  Highway Superintendent,  said he didn’t see any  evidence of harm from gas drilling during his trip to  “Susquehanna”  where Dimock, Pennsylvania is located. “If trucks wreck roads, they won’t keep running over them.  They need to fix them for the benefit of their own equipment.”

In contrast,   after a trip to  Dimock during  this past winter,  Breathing reported, “Throughout  Dimock, signs of poverty are  clearly visible and  the state of  dirt roads traveled by heavy drilling trucks was impossible to ignore.  Ruts were so deep and continuous that   humps as high as 8-9″ threatened  the under carriages of low-riding vehicles and, in part,  may have prompted  the Mayor’s question in Callicoon… about the state of our  local roads.”  (Mayor Tillman’s description of the gas industry’s  economic and environmental impacts on his town of DISH, Texas is available here.)

In his final comment, Mr. Van Swol said,  “Don’t worry about  money for  DEC inspectors.  The New York State Legislature will give us whatever we need  due  to all the money  coming from drilling and a severance tax.”

Virginia Andkjar,  one of the Town’s  Assesor stated,  “Unfortunately, it looks like the severance tax  will  be just a pittance.”

According to pages 98-99 of  Governor Patterson’s Budget Briefing Book,  the severance tax amounts to 3% on some gas extraction companies,  won’t be levied  until 2011-12 and is predicted to garner only  $1 million in revenues.

**********************************

CALLICOON CREEK PARK SCHEDULE (not including regularly-scheduled  Sunday Farmers’ Markets):

May 22 at 10:00 AM :  Plant Swap.  Email me at  Ljbucar@earthlink.net for details

July 10,  31 and August 21 or 28 (still in flux):  Under the Moon in Callicoon Concert Series.   Janet Burgan, coordinator. Keep your eyes and ears pealed for details!

July 17 : Art Fair.  For more information,  see Robin at  The Callicoon Wine Merchant

Texas Mayor: Drilling, Barnett Shale, Property Values and More

Posted on by Liz

Dear Breathing Readers:   “Mel” (Comment #7 under  “Cochecton Zoning and Mortgage Troubles”)  says,  “It would be an education for NY to study an area where drilling has worked to most people’s benefit, instead of trying to reinvent the wheel, and panicking. It’s all been done before.”

In response,  Breathing agrees.  “It has all been done before.”  For a different view  of  drilling in the Barnett,  Breathing offers this article by Mayor Calvin Tillman of DISH, Texas. In large part,  his exposition relies on the inherent economic infrastructure of gas drilling and its industry.   (The Mayor references air quality studies done in DISH.  Those studies have  revealed that not only were the air and water  contaminated by the gas industry, but so were  the people.)  For readers who just want to scan the article, I’ve tried to highlight it by topic.

Because some circumstances in DISH are different than what we may encounter in New York,  here’s a link to an article written by a resident of Dimock, PA where Marcellus drilling and its impacts are a daily fact of  life. It’s  clear  that Mel’s assurance that one “never hears  about [drilling]  affecting home or land prices” in the Barnett Shale  is not accurate.

***********************************************

Is the juice worth the squeeze?

When taking over as mayor of DISH, the first question that was asked by the local media outlets was to respond to the fact that our property values as a whole had decreased considerably from the past year. This is where small towns and cities get the bulk of their funding, through taxes on these property values. Therefore, if the taxable value goes down, naturally the revenue for the town does as well. Now I must say that I am opposed to unnecessary taxation, and therefore have done everything I can to make the taxes here the lowest in the area, and succeeded. However, the town has doubled in size over the last couple of years, yet the taxable value continued to drop. This baffled me how essentially the total value of the town drops every year, while were experiencing massive growth.

Not only did it baffle me, but it concerned me. As most small towns do, we use the county tax assessor’s office to perform the tax collection service for us, so they were my first call. When they explained the mineral values were the cause of this drop, and that was sixty percent of our tax base, I was again stunned. As you know we are located in the middle of the Barnett Shale, and have had a great deal of exploration in this area. So what would cause the values to continue to drop? This was also during the timeframe when natural gas prices were climbing to all time record highs.

As I investigated the source of the decline in my town it all started to become apparent. The property values not tied to minerals have continued to drop. I believe this is mostly due to the massive natural gas compressors, pipelines and metering stations. They have all but made the surface property here worthless; however, that does not account for the minerals which is over half of our taxable values. I then found that on average, each well drilled loses fifty percent of its production after the first year. That is a huge drop in production in only one year. So that tells me that the only way to maintain the same mineral value is to drill fifty percent more wells every year. So if you have ten wells this year, you would need to drill five more next year just to maintain the same production.

Many of the local cities have went on a sort of spending spree with the new found wealth from the natural gas minerals, and are now finding themselves in a financial crunch. The facts that I taught myself through this simple question from an intuitive reporter has made a world of difference on how I approached this problem here in DISH. We are frugal at best here, making the most of every dollar we get. We have cut the town debt in half, built a massive park, a library, repaved roads and performed substantial upgrades to town facilities and done this while lowering taxes and not dipping into the emergency fund we have in only two years.

To the real point, is what do minerals play into all of this? As previously mentioned we have over half of our tax dollars that come from the minerals, more specifically the revenue we received in 2007 was made up of 56% mineral values, in 2008 that number jumped to 64%. We have not gotten the completed numbers for 2009, but they will likely be similar. The dollar figures for this are 14, 500,000 in 2007 and 22,277,000 in 2008 in property values from mineral.

On the surface the benefit from this industry seems huge. We are a small town and they double our value. But I also compare this to the drug “heroin”, due to seeing the other towns which have gotten addicted to the drug and when the drug goes away, (when they price of natural gas goes down 75% as it has), they find themselves in a financial crisis. Also, most people do not take into account how much it costs to have this activity going on. I can only explain what goes on in DISH, TX, but will attempt to explain the drugs side affects.

First and foremost this exploration destroys roads, which are very expensive to maintain and replace. None of the existing roads were designed to withstand the constant pounding from an 80,000 pound waste-water truck. Nor were they designed to handle the larger equipment that is used to drill and refracture the wells. To build roads to handle this traffic can cost millions of dollars.

If the municipality owns the roads, they can force the companies to sign a road use agreement, which forces them to pitch in and help the roads. Most of the cities in the area have agreements like this in place. If they do not, then they are foolish, and are likely costing their taxpayers a great deal of money by not forcing the companies to pay. However, the drilling companies are going to take whatever measures they can to keep from paying damages to the roads. The City of Argyle found out the hard way when they were sued by XTO over road work. (Breathing has included the Complaint filed by XTO against Argyle for interested readers:  xto sues argyle complaint)

Here in DISH many of the roads are not owned by the town. This is both good and bad; it is good because we don’t have to pay for the major upkeep of these roads. However, if we don’t own the road we don’t have much control either. For example, we have implemented a weight restriction on all of the roads that we do own, but we can not enforce this on roads that we do not own. Unfortunately, the county does not have the capability to force these companies to have road agreements and pay for what they destroy. Therefore, the replacement and repairs come from the general taxation, or bond elections, not directly from the gas companies. So as you might guess it is a juggling match for the counties to keep the roads drivable for the average vehicle.

One example of that is Eakin Cemetery Road, which goes through part of DISH, but is owned by the county. A pipeline was being installed in this area, and the equipment used in this process is massive. Please note that the pipelines must be included in the cost of this exploration, even though they contribute little to the towns or property owners, and take a lot in return. I will discuss how bad they hurt the towns later.

When this line went in the companies used Eakin Cemetery Road to access the route. They completely destroyed this road and virtually made in impassible for the average vehicle. You could literally see the grooves where the truck tires that hauled massive equipment went. The pavement was cracked and torn from this equipment and the pipeline companies did nothing to prevent or repair this. And though the county does work hard to keep the roads in reasonable shape, when something like this happens in takes a while to plan the repair; therefore, the citizens here were forced to drive on the impassible road for quite a while until repairs were made. (Breathing would also suggest interested riders take a drive up to Dimock, PA.  Despite Jack Danchak’s recent assurances in either The Sullivan County Democrat or The River Reporter,  I’ve been to “Dimick”  and seen a very different reality.  Carter Road was scored with grooves 8″ or more deep.)

There is another impact that can be recognized quickly, and that is the affect that the exploration has directly on surface values. I am sure that there are some who believe the propaganda and are fine with having a well or pipeline in their front yard. However, regardless of what you may have heard, they are the exception not rule, especially if you have a small population of mineral owners in your community. The average person will not purchase the property right next to a well site or compressor, providing they are made aware of it. Unfortunately, most of the mineral owners in this area have kept the minerals and moved on to someplace else. However, when they have tried to sell their property with wells and pipelines on them, it has not been successful.

Although you may see a boost in your tax rolls for the short term, you will pay in the long run with the drop in property values. For a small growing community like DISH it especially provides an obstacle for quality growth. There have been four large tracts of property for sale in DISH for several years with no real interest in purchasing the property. If you do manage to get some interest in the property, it will likely be something like a pipeyard or something else that continues to devalue the surrounding property. So getting quality growth in an area that has a large amount of exploration proves to be a large hurdle if not impossible.

The above paragraph dealt with the exploration of the mineral, now we must consider the pipelines, and appurtenances to these pipelines, such as compressors or metering stations. These facilities have dealt us a very harsh blow without giving much in return. This is highlighted by a previous illustration of the pipeyard. The gentleman who unfortunately lives next door to this compressor site sold off a piece of property to a developer who built 18 homes that average around $200,000 each. However, after the compressors were there, he has not been able to give his property away. He was only able to lease some of it to a company that stores pipe. That is the best he can do now, and that in itself is very low quality growth and makes the area even less desirable.

Another illustration that has been used by me before is the gentleman who has had 63 acres for sale now for several years. He purchased the property as an investment, and now has three pipelines and an above ground valve. He can not give this property away. As he reaches retirement age his retirement has been stolen from him. This is no different than Enron or any other scandal, only it has been made legal thievery. There are two other pieces of property that have been for sale for several years, one of which is a large parcel of about 70 acres and the other is about 10 acres.

The above examples are heart wrenching when you look at how much it has cost the property owners, and only one of the above mentioned owners has any substantial mineral interest. Therefore, they others are merely victims of circumstance. However, as this gets to the point of whether this all is really worth it, I believe that if all of these property were sold and developed it would add somewhere around $20,000,000 in property values, which is more than the average in mineral values over the last few years. I also believe this is a very conservative estimation, it could be more.

So would you rather have homes than minerals? Homes in theory will increase in value over the long term while minerals will drop. Although, this has not been case the last couple of years, in the long term this has held true. Also, natural gas is a commodity, and its prices are much more volatile than housing. For example in the last couple of years the lowest price of natural gas is about 25% of the highest; therefore, you have seen a 75% drop in prices in a little over a year.

In DISH we have focused on overcoming the boom and trying to get quality development. We have worked with a number of developers to annex their property into the city. All three of the major annexations we have had since I became mayor, have been solely to protect them from the development of the minerals and total destruction of the surface values that accompany it. This is not saying that we do not allow drilling; we just force the companies to do it responsibly. We have a pad site that is right in the middle of one of these subdivisions and it really does not look that bad. It is lined with an eight foot concrete fence and most of the stuff inside including the tanks is not visible beyond the fence. However, the companies will only do this when they are forced too, they will not volunteer it.

So how about all those mineral owners who have gotten filthy rich? Here in DISH there have been some folks who have made a great deal of money on the minerals. However, most of them had lived here their while life, and had property handed down over the generations, otherwise they only have a small portion of the mineral rights. Therefore, there are only a few that are still alive that have a major portion of the mineral rights, and as previously stated most of them have moved away to someplace that they do not have to deal with the mess that is left behind.

This area was the beginning of the Barnett Shale, if I am not mistaken the first gas producing well in the Barnett Shale, was within 20 miles of DISH. Therefore, the minerals were purchased several years ago, and the leases were quite low in comparison to the massive leases signed last summer. The lease here is somewhere around 16% royalties with anywhere from $1,000 to $1,500 per acre, not the 25% and $25,000 per acre that have been publicized.

So what does the 16% royalty get you? From what I understand, for someone who owns four acres and has a quarter of the mineral rights, they average less than a $100 a month. Therefore, if you have one acre with 100% of the minerals you would get something similar. Therefore, unless you have a massive amount of land with 100% of the minerals, you are not going to get much money. If you are part of the lease, you must also consider the truck traffic, odor, noise, and you just might be fortunate enough to have a high pressure gas pipeline run through your front yard. All of these things accompany the hundred bucks a month. I do not have any mineral rights, if anyone has another illustration please add it to this posting.

So to the point of, is the juice worth the squeeze? From my perspective as a small town mayor and a property owner, I say no! Not in the manner in which it is being done in Texas. I think that with minor regulation it could both provide the natural resources that we need as well as not totally destroying the surface values and destroying the growth of these areas. For example, there is no process in Texas for the laying or routing of pipelines. The pipeline companies can literally put them anywhere they want without concern for surface owners and other natural resources. Municipalities do have some limited control over the placement of the wells, but not the pipelines.

The items that were discussed were only the things that are easily recognized. I am still learning the affects on air and water quality and to explore the possible health of affects of this exploration. Although I have recently learned that the companies with the compressor site have learned a loophole that allows them to virtually go without regulation in regards to the air emissions they produce. I will share more on this subject as I figure out the specifics. I have the documents; I just have not digested everything yet.

This also does not include the tens of thousands of dollars in legal fees it takes to offer the citizens some minor protection from these companies. Nor does it take into account the hundreds of hours of my time spent researching and campaigning for more regulation for no pay. So you must ask yourself; is the juice is worth the squeeze? I can support any statement that was made in this posting; therefore, if you have more specific questions, please let me know and I will clarify it for you. To those of you who have visited DISH, I doubt you have any questions in regards to the impact the Barnett Shale has had on us.

Texas Mayor: Drilling, Barnett Shale, Property Values and More

Posted on by Liz

Dear Breathing Readers:   “Mel” (Comment #7 under  “Cochecton Zoning and Mortgage Troubles”)  says,  “It would be an education for NY to study an area where drilling has worked to most people’s benefit, instead of trying to reinvent the wheel, and panicking. It’s all been done before.”

In response,  Breathing agrees.  “It has all been done before.”  For a different view  of  drilling in the Barnett,  Breathing offers this article by Mayor Calvin Tillman of DISH, Texas. In large part,  his exposition relies on the inherent economic infrastructure of gas drilling and its industry.   (The Mayor references air quality studies done in DISH.  Those studies have  revealed that not only were the air and water  contaminated by the gas industry, but so were  the people.)  For readers who just want to scan the article, I’ve tried to highlight it by topic.

Because some circumstances in DISH are different than what we may encounter in New York,  here’s a link to an article written by a resident of Dimock, PA where Marcellus drilling and its impacts are a daily fact of  life. It’s  clear  that Mel’s assurance that one “never hears  about [drilling]  affecting home or land prices” in the Barnett Shale  is not accurate.

***********************************************

Is the juice worth the squeeze?

When taking over as mayor of DISH, the first question that was asked by the local media outlets was to respond to the fact that our property values as a whole had decreased considerably from the past year. This is where small towns and cities get the bulk of their funding, through taxes on these property values. Therefore, if the taxable value goes down, naturally the revenue for the town does as well. Now I must say that I am opposed to unnecessary taxation, and therefore have done everything I can to make the taxes here the lowest in the area, and succeeded. However, the town has doubled in size over the last couple of years, yet the taxable value continued to drop. This baffled me how essentially the total value of the town drops every year, while were experiencing massive growth.

Not only did it baffle me, but it concerned me. As most small towns do, we use the county tax assessor’s office to perform the tax collection service for us, so they were my first call. When they explained the mineral values were the cause of this drop, and that was sixty percent of our tax base, I was again stunned. As you know we are located in the middle of the Barnett Shale, and have had a great deal of exploration in this area. So what would cause the values to continue to drop? This was also during the timeframe when natural gas prices were climbing to all time record highs.

As I investigated the source of the decline in my town it all started to become apparent. The property values not tied to minerals have continued to drop. I believe this is mostly due to the massive natural gas compressors, pipelines and metering stations. They have all but made the surface property here worthless; however, that does not account for the minerals which is over half of our taxable values. I then found that on average, each well drilled loses fifty percent of its production after the first year. That is a huge drop in production in only one year. So that tells me that the only way to maintain the same mineral value is to drill fifty percent more wells every year. So if you have ten wells this year, you would need to drill five more next year just to maintain the same production.

Many of the local cities have went on a sort of spending spree with the new found wealth from the natural gas minerals, and are now finding themselves in a financial crunch. The facts that I taught myself through this simple question from an intuitive reporter has made a world of difference on how I approached this problem here in DISH. We are frugal at best here, making the most of every dollar we get. We have cut the town debt in half, built a massive park, a library, repaved roads and performed substantial upgrades to town facilities and done this while lowering taxes and not dipping into the emergency fund we have in only two years.

To the real point, is what do minerals play into all of this? As previously mentioned we have over half of our tax dollars that come from the minerals, more specifically the revenue we received in 2007 was made up of 56% mineral values, in 2008 that number jumped to 64%. We have not gotten the completed numbers for 2009, but they will likely be similar. The dollar figures for this are 14, 500,000 in 2007 and 22,277,000 in 2008 in property values from mineral.

On the surface the benefit from this industry seems huge. We are a small town and they double our value. But I also compare this to the drug “heroin”, due to seeing the other towns which have gotten addicted to the drug and when the drug goes away, (when they price of natural gas goes down 75% as it has), they find themselves in a financial crisis. Also, most people do not take into account how much it costs to have this activity going on. I can only explain what goes on in DISH, TX, but will attempt to explain the drugs side affects.

First and foremost this exploration destroys roads, which are very expensive to maintain and replace. None of the existing roads were designed to withstand the constant pounding from an 80,000 pound waste-water truck. Nor were they designed to handle the larger equipment that is used to drill and refracture the wells. To build roads to handle this traffic can cost millions of dollars.

If the municipality owns the roads, they can force the companies to sign a road use agreement, which forces them to pitch in and help the roads. Most of the cities in the area have agreements like this in place. If they do not, then they are foolish, and are likely costing their taxpayers a great deal of money by not forcing the companies to pay. However, the drilling companies are going to take whatever measures they can to keep from paying damages to the roads. The City of Argyle found out the hard way when they were sued by XTO over road work. (Breathing has included the Complaint filed by XTO against Argyle for interested readers:  xto sues argyle complaint)

Here in DISH many of the roads are not owned by the town. This is both good and bad; it is good because we don’t have to pay for the major upkeep of these roads. However, if we don’t own the road we don’t have much control either. For example, we have implemented a weight restriction on all of the roads that we do own, but we can not enforce this on roads that we do not own. Unfortunately, the county does not have the capability to force these companies to have road agreements and pay for what they destroy. Therefore, the replacement and repairs come from the general taxation, or bond elections, not directly from the gas companies. So as you might guess it is a juggling match for the counties to keep the roads drivable for the average vehicle.

One example of that is Eakin Cemetery Road, which goes through part of DISH, but is owned by the county. A pipeline was being installed in this area, and the equipment used in this process is massive. Please note that the pipelines must be included in the cost of this exploration, even though they contribute little to the towns or property owners, and take a lot in return. I will discuss how bad they hurt the towns later.

When this line went in the companies used Eakin Cemetery Road to access the route. They completely destroyed this road and virtually made in impassible for the average vehicle. You could literally see the grooves where the truck tires that hauled massive equipment went. The pavement was cracked and torn from this equipment and the pipeline companies did nothing to prevent or repair this. And though the county does work hard to keep the roads in reasonable shape, when something like this happens in takes a while to plan the repair; therefore, the citizens here were forced to drive on the impassible road for quite a while until repairs were made. (Breathing would also suggest interested riders take a drive up to Dimock, PA.  Despite Jack Danchak’s recent assurances in either The Sullivan County Democrat or The River Reporter,  I’ve been to “Dimick”  and seen a very different reality.  Carter Road was scored with grooves 8″ or more deep.)

There is another impact that can be recognized quickly, and that is the affect that the exploration has directly on surface values. I am sure that there are some who believe the propaganda and are fine with having a well or pipeline in their front yard. However, regardless of what you may have heard, they are the exception not rule, especially if you have a small population of mineral owners in your community. The average person will not purchase the property right next to a well site or compressor, providing they are made aware of it. Unfortunately, most of the mineral owners in this area have kept the minerals and moved on to someplace else. However, when they have tried to sell their property with wells and pipelines on them, it has not been successful.

Although you may see a boost in your tax rolls for the short term, you will pay in the long run with the drop in property values. For a small growing community like DISH it especially provides an obstacle for quality growth. There have been four large tracts of property for sale in DISH for several years with no real interest in purchasing the property. If you do manage to get some interest in the property, it will likely be something like a pipeyard or something else that continues to devalue the surrounding property. So getting quality growth in an area that has a large amount of exploration proves to be a large hurdle if not impossible.

The above paragraph dealt with the exploration of the mineral, now we must consider the pipelines, and appurtenances to these pipelines, such as compressors or metering stations. These facilities have dealt us a very harsh blow without giving much in return. This is highlighted by a previous illustration of the pipeyard. The gentleman who unfortunately lives next door to this compressor site sold off a piece of property to a developer who built 18 homes that average around $200,000 each. However, after the compressors were there, he has not been able to give his property away. He was only able to lease some of it to a company that stores pipe. That is the best he can do now, and that in itself is very low quality growth and makes the area even less desirable.

Another illustration that has been used by me before is the gentleman who has had 63 acres for sale now for several years. He purchased the property as an investment, and now has three pipelines and an above ground valve. He can not give this property away. As he reaches retirement age his retirement has been stolen from him. This is no different than Enron or any other scandal, only it has been made legal thievery. There are two other pieces of property that have been for sale for several years, one of which is a large parcel of about 70 acres and the other is about 10 acres.

The above examples are heart wrenching when you look at how much it has cost the property owners, and only one of the above mentioned owners has any substantial mineral interest. Therefore, they others are merely victims of circumstance. However, as this gets to the point of whether this all is really worth it, I believe that if all of these property were sold and developed it would add somewhere around $20,000,000 in property values, which is more than the average in mineral values over the last few years. I also believe this is a very conservative estimation, it could be more.

So would you rather have homes than minerals? Homes in theory will increase in value over the long term while minerals will drop. Although, this has not been case the last couple of years, in the long term this has held true. Also, natural gas is a commodity, and its prices are much more volatile than housing. For example in the last couple of years the lowest price of natural gas is about 25% of the highest; therefore, you have seen a 75% drop in prices in a little over a year.

In DISH we have focused on overcoming the boom and trying to get quality development. We have worked with a number of developers to annex their property into the city. All three of the major annexations we have had since I became mayor, have been solely to protect them from the development of the minerals and total destruction of the surface values that accompany it. This is not saying that we do not allow drilling; we just force the companies to do it responsibly. We have a pad site that is right in the middle of one of these subdivisions and it really does not look that bad. It is lined with an eight foot concrete fence and most of the stuff inside including the tanks is not visible beyond the fence. However, the companies will only do this when they are forced too, they will not volunteer it.

So how about all those mineral owners who have gotten filthy rich? Here in DISH there have been some folks who have made a great deal of money on the minerals. However, most of them had lived here their while life, and had property handed down over the generations, otherwise they only have a small portion of the mineral rights. Therefore, there are only a few that are still alive that have a major portion of the mineral rights, and as previously stated most of them have moved away to someplace that they do not have to deal with the mess that is left behind.

This area was the beginning of the Barnett Shale, if I am not mistaken the first gas producing well in the Barnett Shale, was within 20 miles of DISH. Therefore, the minerals were purchased several years ago, and the leases were quite low in comparison to the massive leases signed last summer. The lease here is somewhere around 16% royalties with anywhere from $1,000 to $1,500 per acre, not the 25% and $25,000 per acre that have been publicized.

So what does the 16% royalty get you? From what I understand, for someone who owns four acres and has a quarter of the mineral rights, they average less than a $100 a month. Therefore, if you have one acre with 100% of the minerals you would get something similar. Therefore, unless you have a massive amount of land with 100% of the minerals, you are not going to get much money. If you are part of the lease, you must also consider the truck traffic, odor, noise, and you just might be fortunate enough to have a high pressure gas pipeline run through your front yard. All of these things accompany the hundred bucks a month. I do not have any mineral rights, if anyone has another illustration please add it to this posting.

So to the point of, is the juice worth the squeeze? From my perspective as a small town mayor and a property owner, I say no! Not in the manner in which it is being done in Texas. I think that with minor regulation it could both provide the natural resources that we need as well as not totally destroying the surface values and destroying the growth of these areas. For example, there is no process in Texas for the laying or routing of pipelines. The pipeline companies can literally put them anywhere they want without concern for surface owners and other natural resources. Municipalities do have some limited control over the placement of the wells, but not the pipelines.

The items that were discussed were only the things that are easily recognized. I am still learning the affects on air and water quality and to explore the possible health of affects of this exploration. Although I have recently learned that the companies with the compressor site have learned a loophole that allows them to virtually go without regulation in regards to the air emissions they produce. I will share more on this subject as I figure out the specifics. I have the documents; I just have not digested everything yet.

This also does not include the tens of thousands of dollars in legal fees it takes to offer the citizens some minor protection from these companies. Nor does it take into account the hundreds of hours of my time spent researching and campaigning for more regulation for no pay. So you must ask yourself; is the juice is worth the squeeze? I can support any statement that was made in this posting; therefore, if you have more specific questions, please let me know and I will clarify it for you. To those of you who have visited DISH, I doubt you have any questions in regards to the impact the Barnett Shale has had on us.