Sunday, June 30, 2013

Jeff's Synopsis From PAC Meeting.

Overall, our situation as landowners is not very good. However, even though I feel the negative features outweigh the positive, we should bear in mind that there is some hope! I'd like to look at some of the stronger points - for and against us. We are at the mercy of a governor that I now have no confidence in at all. Under this clown the most positive thing that could happen to us would be for him to lift the moratorium. If he doesn't lift it totally - which I don't think he would - he could lift it "in the towns that want it." For most of the Southern Tier this would in theory open us up to drilling. We know that the majority of towns across the southern area of the Southern Tier support drilling. However, the key word there is "we", and that may not include the drilling companies. Which leads us to what in many ways may be our biggest problem. The Home Rule issue in our state may be a larger problem than our governor. As that issue now stands, through the first level of appellate courts, three votes on any town board can reverse any prior positive vote on drilling in a town. This probably scares the beejeebers out of a lot of drillers. Why should they invest millions in a town only to have it taken away by a vote of three town board members. I like to think there are some ways to work around this, but that is a huge area of discussion - not for us right now. For example: some sort of entirely different lease agreements; some sort of new commitment from towns; studies or surveys that show how dependably pro-drilling an area is, etc. This is actually a very broad subject area - leading to positives and negatives. On the positive side we know that the majority of our towns support drilling already. We also should be able to assume that that support is going to increase. I can say that, I think, because nationally the news on energy is almost totally positive on natural gas. As more and more residents realize that what they have been seeing in the local newspapers is flagrantly not true, they will become more and more supportive. So far, thanks to the total lack of objectivity in the local media, the environmentalists have had it all their way. Support for drilling grows steadily - and that should increase support for moratoriums. It's also safe to assume that once drilling starts anywhere in the Southern Tier, and people see the benefits, that support will grow - both with residents and the drillers. Another positive for us is the fact that New York stands alone in it's opposition to drilling. Again, as the "good news" soaks in more and more, we should see more and more support for our cause. Related to that, our governor, has to see that he stands almost totally alone on this issue! I don't know how long he can get away with putting more emphasis on Yoko Ono than the working stiffs of New York. Every other governor sitting on a shale play, including several liberals, are in strong support of fracking. Another positive: we are sitting on top of 20 to 30% of the Marcellus Shale, plus an unknown % of the Utica - but it should be significant. That asset is there for the indefinite future, and we still have a better infrastructure for gas drilling than Pa. - even after five years of drilling down there. This is not good news for those of us who need money now. But it is an asset and should play a role for future family generations, or for sale value for those of us who want to, or must, sell. A negative and positive: the low price of natural gas is killing us. However, there are a lot of reasons to believe that prices are going to continue going up. The market is totally flooded right now, and for the near future. This could also be called our biggest problem right now. But on this one there are several reasons to believe the situation will improve in our favor - just not very quickly. A probable positive: as the positive environmental effects of burning more and more natural gas, especially in place of coal, become more apparent, more and more rational environmentalists will back away from the radical positions. Now, a bunch of negatives: First and foremost is the basic political reality of New York - we are a totally, radically, hopelessly, liberal state! We have passed California!! "Old" liberals supported the working stiffs - the new liberals support the likes of Yoko Ono! Cuomo is obviously more concerned about the support of Yoko and her ilk than he is about us. The urban voters outnumber us by a huge margin in New York - at least 2 to 1. Someone in our group once pointed out that landowners of more than 10 acres are 2% of the population! As long as we are a democracy - one man, one vote - we are not just a minority, we hardly exist! We get to pay the bills, the urban voters get to tell us what those bills will be. Others already discussed: Low gas prices , flooded market, Home Rule, the appellate courts, state politics, our governor. For right now, and I stress right now, I would say the negatives outweigh the positives. Not good news for us. However, when you consider all the positives working in the background, I think we can still hope for a win - it just won't be very soon. For now, 3 to 5 years is probably as good a guess as any. And one "morbid" positive: In all probability, even if Cuomo lifted the moratorium tomorrow, and all the towns made it clear they wanted gas drilling, the drillers still wouldn't come, due to the market situation. So, in a morbid sense, you could say the moratorium and our wacko governor are not really hurting our interests. The proper response to that idea is that New York should have been drilling in 08 - like the rest of the world! Just think where we might be! WELCOME TO NEW YORK!!

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