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Testimony to
Assembly Standing Committee on Environmental Conservation

The Revised Draft SGEIS Provides a Pathway to Potential Natural Gas Drilling Activities in the Marcellus Shale

Presented by
Heather Briccetti
Acting President & CEO

October 6, 2011

Chairman Sweeney and members of the Assembly my name is Heather Briccetti. I am the acting-president and CEO of the Business Council of New York State, Inc. I appreciate the opportunity to share with you The Business Council’s views on the sGEIS.

Over the past two and a half years, the State of New York has engaged in one of the nation’s most complex and thorough reviews of one single process; the extraction of a natural resource. The Department of Environmental Conservation under the leadership of two Commissioners with strong environmental records have investigated and planned for the high and low probability factors associated with natural gas drilling. Its time to move forward.

The Business Council is conducting a formal review of the sGEIS and will submit public comments on the sGEIS and regulations within the allotted timeframe. We do not believe there is need for additional time.

Today, we will be sharing with you some of our concerns about the sGEIS, but in totality, we believe that a finalized sGEIS will provide for the environmental protective development of the Marcellus Shale in the Southern Tier. These outcomes create economic opportunity in the region while ensuring a responsible approach to environment protection.

In July of this year the Public Policy Institute, Inc. (PPI), the research arm of The Business Council of New York State Inc. released the well regarded Drilling for Jobs: What the Marcellus Shale could mean for New York.

The study finds that creating as few as 300 natural gas wells per year in the Marcellus Shale has the potential to generate more than 37,500 jobs annually in New York. The report details the significant job-creating potential of the natural gas resource, comparing the private sector growth of select counties in the Southern Tier with a section of northern Pennsylvania.

In addition to investigating projected private sector employment in the Empire State, the report contrasts job growth data for five counties in New York — Allegany, Steuben, Chemung, Tioga and Broome with a similar region in Pennsylvania — McKean, Potter, Susquehanna, Bradford and Tioga.

The Public Policy Institute found that the area of New York experienced job loss of 0.3 percent, while the counties just south of the state line saw private sector job growth of 4.7 percent. From 2009 to 2010, Oil and Gas Extraction and Support Activities for Mining, just two of the Marcellus-related industries, gained 4,355 jobs in Pennsylvania. In New York, these sectors combined saw only 42 new jobs.

Natural gas exploration also provides high paying jobs. The average wage in Oil and Gas Extraction and Support Activities for Mining is $79,184 in New York State, over double the private sector wage in upstate New York of $39,157.

The report also explores the potential real property tax benefits of natural gas wells. PPI estimates that one Marcellus well in Owego, New York would generate $190,300 in combined real property tax revenue for the county, town and school districts. Revenue such as this would offer a tremendous boost to local economies in the Southern Tier.

At the Business Council, we are concerned that additional efforts to constrain the development of natural gas or the interjection of greater delays or uncertainty into the approval process could leave New Yorker’s wonder what might have been.

The natural gas resources are not unlike other commodities, the viability of this resource is a complex cross-dependencies between geology, technology and economics. Decreases in the price of gas, less productive geology, unwarranted mandates, regulatory uncertainty, or constrained markets can make production non-economical and lead to stranded resources. Should this happen, New York would be left with fewer jobs and our land owners and local governments would not benefit economically from the resources.

While we generally support the draft sGEIS, we question some of these proposed requirements.

As an example, it proposes a permit condition requiring pre-drilling surveys of the entire site documenting the presence, location, and identity of any invasive plant species and then a requirement for the restoration of native plant cover on the site. This – provisions will impose significant open ended obligations and in some settings may be unattainable. More importantly, before drilling the applicant has done nothing to encourage or propagate the transmission of invasive plant species.

The operator is being required to remediate a condition they did not cause.

Some provisions of the sGEIS will lead to excessive delays like the requirement to conduct pre-disturbance biological studies and an evaluation of the potential impacts on forest interior birds from a proposed project.

This type of length site specific analysis will delay operation; these studies can take significant time and often generate predictable result based upon simple evaluations of the flora and fauna on the site.

The sGEIS contains requirements on operators that are costly and in some cases not well established. A requirement that every engine contain a Selective Catalytic Reduction (SCR) may prove to be both costly and unwieldy.

SCR are a proven technology when used in conjunction with passenger cars and light duty trucks, it does not mean the same technology will be effective on variable load diesel engines in the field.

Wisely we don’t require similar devise on other job site throughout the state. The sGEIS does contain many proven measure to reduce air quality impacts have merit, but this requirement is unproven and unwarranted.

In conclusion, I would like to once again state that The Business Council believes the Department of EnvironmentalConservation has gone to great lengths to create a plan that is balanced in its approach.

It is a plan that protects the public and the environment while allowing for vital economic development that will produce green energy and good paying jobs.

We encourage the Department of Environmental Conservation to move this review process forward so that it can begin permitting these wells and policing New York’s production operations.

We appreciate the opportunity to appear before you and we look forward to developing an energy resource that will yield long-term benefits to the people of New York.