Environment DEC
From the September 2005 issue
Governor Signs Oil and Gas Bill to Help Protect Landowners
Governor George E. Pataki recently signed into law legislation that will give additional protections to landowners who lease their properties for oil and natural gas. The new law will also help leasing companies by providing additional detail regarding development of oil and gas resources in New York State.
"Oil and natural gas production from wells in New York is helping to meet our state's energy needs while contributing to the upstate economy," Governor Pataki said. "This legislation is critical to our continued efforts to provide the necessary protections for our non-renewable resources, ensuring that property owners are informed of the benefits and risks of leasing their property, while encouraging the smart production of oil and natural gas in New York State."
Development Process Improved
The new law establishes a uniform and consistent process to encourage continued development of oil and gas resources, streamlines administration, and will help educate parties about the risks and rewards of oil and gas production.
The New York State Department of Environmental Conservation (DEC) is responsible for ensuring the environmentally sound, economic development of New York's non-renewable energy and mineral resources. New York State has established strict environmental and safety requirements for natural gas and oil development in New York and also is responsible for preventing waste of these non-renewable natural resources. In addition, DEC helps protect the ownership rights of landowners affected by energy production.
Record Breaking Production
Most people don't think of the
Finger Lakes Region when they
think of gas wells, like this one
located in Chemung County
In 2004, total market value of oil and gas production in New York was an estimated $334 million. Companies are investing hundreds of millions of dollars exploring for and developing these resources. Prolific natural gas wells in the Trenton-Black River formation in the Finger Lakes region are breaking state production records, with a 30 percent increase last year alone. The high costs and risks taken for the "potential" rewards associated with these wells were among the reasons for added protections.
The legislation signed by Governor Pataki makes comprehensive changes in the regulation of oil and gas resources, eliminating the uncertainty associated with some aspects of exploration and development, protecting investment in reserves development, and protecting the correlative rights of all landowners. The law will also add consumer protection measures to facilitate the orderly leasing of oil and gas rights.
DEC Acting Commissioner Denise M. Sheehan said, "Private investments in new oil and natural gas production, especially in the Trenton-Black River formation, are expected to increase in coming years. This new law will assist DEC with the continued regulation of energy production to ensure our environmental resources are protected, and to work with private landowners and local communities to make them aware of their rights with respect to oil and gas leasing and development."
History and More Information
New York State's laws regulating natural gas and oil were originally enacted in 1963 to attract the investments necessary for exploration and development of oil and gas reserves in the state. They helped ensure that production costs and production revenues would be shared on a just and reasonable basis-either through voluntary agreements or through orders issued by DEC.
Since 1996, independent oil and gas companies have invested an estimated $500 million in Trenton-Black River development, with an average well cost of more than $1 million. Most of this exploration has been south and west of the Finger Lakes, with exploratory wells permitted as far east as Montgomery County and as far west as Cattaraugus County. Overall, Trenton-Black River production extends west to Michigan and Ontario, Canada, and south to West Virginia. Additional information on New York's oil and gas resources is available at the Division of Mineral Resources web pages on DEC's website.
