Its been amazing in the last few weeks to see the political winds shift here on the gas drilling issue. A month or two ago there was a widespread sense that industrial-scale gas drilling across northeast Pennsylvania and the western Catskills was inevitable, that the gas companies had a “Get Out of Jail Free” card through the Federal Energy Act to steamroll over us, with little regard for local communities or the environment, and that it was just a matter of time before the bucolic rural life we enjoy would be destroyed.
A lot can happen in a month. It appears that the Pennsylvania DEP is shifting away from being a rubber stamp for the drilling companies. The PA DEP ordered the partial shutdown of two drilling operations for violation of the PA Clean Streams Act (See article.) They also ordered the drilling companies to a meeting in Harrisburg to discuss water issues. (Good article on seekingalpha.com) Following these developments, it appears that the two large players in the Susquehanna Valley, Range Resources and Cabot Oil and Gas, suspended new leases in the area. The DEP is also supporting the 3 Pennsylvania municipalities seeking greater local control over drilling-related operations in their case to the PA Supreme Court. Oh, the difference a few months and growing public awareness and pressure can make.
On the New York side, Gov. Paterson’s directive to the NY Dept. of Environmental Conservation (DEC) to conduct a wide ranging environmental review of drilling practices, to include public hearings and input from public officials, casts a huge pall over the drilling companies’ unfettered access to the New York side of the Marcellus ‘play’.
The two gorillas in the room, the Delaware River Basin Commission and the New York City Dept. of Envrionmental Protection, together responsible for almost all the surface water resources flowing through this area, have yet to weigh in. But drilling is definitely on their radar, and they are certain to play a key role in the upcoming DEC review process. (Gas drilling is gaining traction as an issue in NYC, with multiple articles in the Times, as well as a lengthy piece on WNYC. There have also been reports on NPR’s All Things Considered and Morning Edition, as well as on the Brian Lehrer Show.)
The county and townships are also working together like I’ve never seen before. Its like somebody lit a fire under ’em.
A very interesting thing to look at is the stock price for oil and gas companies heavily involved in this ‘play’. Back when casinos were the big issue here — namely, whether they would be approved or not — I’d check out the stock price of Empire Resorts (the owner of the Monticello Raceway, and a likely site of a casino) — to see how optimistic or pessimistic the markets were about a casino approval. While the large drilling players, like Cabot Oil and Gas and Range Resources, have operations ranging far beyond the Marcellus Shale, they do have significant positions here. Both have also been hyping the Marcellus Play. The chart to the left shows the stock price for Cabot Oil and Gas (COG) over the past 3 months. Over the past 6 weeks, the stock has dropped from a peak of about $70 to about $45 on Friday. Of course, some of this drop is related to the pullback in energy prices over the last few weeks. But I also wonder is some isn’t related to the roadblocks popping up on their road to Marcellus riches.
LIke they always say, “It ain’t over ’till the fat lady sings.” Right now, I think the fat lady is just waking up and getting out of bed. We ain’t seen nothin yet.