|The Frackers Are At It Again!
Hey! I just heard that some bankrupt gas drilling company filed suit against Governor Cuomo, Department of Environmental Conservation (the "DEC") Commissioner Martens, Department of Health Commissioner Shah, and the DEC over something having to do with fracking for gas in New York State.
What's up with that? Well, let me tell you... but before I do, I want to ask you to keep in mind the old aphorism 'pigs get fat, [but] hogs get slaughtered'.
The suit, apparently filed today (December 17), was brought by the bankruptcy trustee for a now-defunct gas drilling company, Norse Energy. [The trustee is bringing the suit because Norse as a company no longer exists; it is being 'liquidated.' (We have previously written about why Norse went into bankruptcywhen it did, here.)]
Based on the papers we have seen so far, the essence of this suit is that various NYS officials and agencies have taken too long to issue something called a 'supplemental generic impact statement' (or SGEIS) with regard to the process of fracking
for methane gas using high volume (that is, an average of 5,000,000 gallons per well), slick-water (that is, toxic chemical-laden) and long, horizontal (rather than traditional, vertical) well bores.
Let me very briefly explain what an SGEIS is.
An SGEIS is a concept that exists by virtue of a state law known as the State Environmental Quality Review Act, or "SEQRA." In a nutshell, SEQRA provides that before local and state agencies involved in discretionary decision making (such as, for example, issuing certain types of permits, enacting laws, and promulgating regulations) actually make those discretionary decisions, the agency must first consider and take into account (in addition to other factors) the likely environmental impacts of the particular action being considered.
In very general terms, the SEQRA process begins with something called an environmental assessment form, or EAF. Preparing an EAF is generally not particularly time-consuming or expensive. If the anticipated impacts of the action being considered by the agency are non-existent or minor, the SEQRA process is over. But if the action being considered is likely to engender significant environmental impacts, then an environmental impact statement, or EIS, must be prepared with respect to the action being considered.
Unlike an EAF, preparation of an EIS is an arduous and typically very time-consuming, very expensive process. (For some projects, the cost of an EIS can cost $100,000 or literally as much as $1 or $2 million dollars. Additionally, it is not unusual for an EIS process to result in the imposition of various environmental protection conditions on the proposed project.)
The project proponent (for example, the party seeking a particular permit) bears the lion's share of the direct, financial costs of going through the EIS process, also bears the indirect cost represented by the loss of time that is inherent in that process, and of course once through the process itself, there are costs associated with complying with whatever environmental protection conditions were imposed.
Now here's where this whole thing gets interesting: the "G" in GEIS (and in SGEIS) stands for generic. [Keep in mind the 'pigs get fat, hogs get slaughtered' adage, and also the fact that project proponents (such as entities seeking permits) bear the brunt of the costs in money and time associated with traversing the (project-specific) EIS process.]
Most SEQRA analysis is done on a project-specific basis, but the law makes provision for the concept of a generic EIS (a GEIS) to be used in certain non- project-specific contexts, and where a GEIS is used, the GEIS may itself prescribe what SEQRA compliance will and will not be required going forward for individual projects falling within the scope of the GEIS.
No project proponent and certainly no particular industry has the legal right to have its business operations covered by a generic EIS, as opposed to having to submit each of its distinct projects to a project-specific EIS analysis.
But as has become increasingly clear (as certain former governmental regulators who now are attempting to make money as consultants assure us that they - not the state legislature - wrote various state laws, and that they wrote those laws working hand-in-hand with the gas industry), the gas industry is not just any particular industry.
Thus, it should not be at all surprising that even though the gas industry has no legal right to obtain a generic EIS for its business operations, the DEC has taken it upon itself to promulgate a Generic EIS for the industry, and as part of that plan, individual (project-specific) gas wells generally will not be subjected to a project-specific EIS analysis.
So, NYS has spent years and (I am guessing) millions of dollars preparing to deliver to the gas industry a really nice present with a big red bow: a generic EIS, one result of which will be to allow the thousands of wells planned for our state to side-step the 'inconvenience' of having to do project-specific EIS analysis each time they want to place a gash in the earth.
To sum up: the state has not charged the gas industry for the costs involved in preparing to promulgate this generic EIS, and as far as I know, there is no plan to do so. In other words, the state is subsidizing the gas industry. And once the GEIS is in place, the gas industry will be spared having to pay the considerable costs in money and time that otherwise would have to be incurred by the drillers if each contemplated well was required to go through a project-specific EIS analysis.
What is the value to the fracking industry of receiving the GIFT of receiving the benefit of a generic EIS? I don't know. But I'll bet a nickel that the number is at least in the multiple 10s of millions of dollars.
Now, what would you do if someone was going to give you a gift worth many 10s of millions of dollars, but that that gift wasn't ready at the time you wanted to receive it? Well, if you were the fracking industry, I guess you would sue the would-be gift giver, and in your papers accuse the person who wasn't delivering your gift fast enough of being "disingenuous," "arrogant," and "pandering to special interest groups." (Huh? Really? You gassers really want to talk about 'special interest groups'?)
Well, this is already longer than I had planned, and I have to go: I think I smell bacon!