New York health officials say they will not recommend lifting the frac ban

The prospects of using hydraulic fracturing to produce natural gas from the highly productive Marcellus shale basin in the state of New York now seem completely dead. New York health officials released their findings on the practice of hydraulic well stimulation, saying they believe that the long term effects of fracing are either too harmful, or too inconclusive for them to recommend the practice.

A moratorium was enacted in 2008, delaying fracturing until a study on health risks associated with fracing could be completed, reports The New York Times. Governor Cuomo considered allowing limited fracing in cash-strapped southern New York counties that sit atop the Marcellus Shale back in 2012, but ultimately decided to continue the moratorium.  A report commissioned by the Manhattan Institute determined  New York would gain an additional $1.4 billion in tax revenues, along with a myriad of other benefits, if the state allowed the practice, like neighboring Pennsylvania.

At a cabinet meeting held in Albany earlier today, at which Acting Health Commissioner Howard Zucker shared some of the findings from his study, Cuomo said he “[would] be bound by what the experts say.”

Zucker said studies showed harmful health effects from fracing, and there were not enough long-term studies to show the effects over time, reports the Syracuse Post Standard. “I cannot support (fracing) in the great state of New York,” he said. “The bottom line is we lack the comprehensive longitudinal studies, and these are either not yet complete or are yet to be initiated. We don’t have the evidence to prove or disprove the health effects, but the cumulative concerns of what I’ve read gives me reason to pause.”

Joe Martens, the commissioner of the Environmental Conservation Department, said he thought the economic viability of fracing in New York was also dubious. With the price of oil falling more than 40% since June, and 63% of the 12 million acres that could be tapped for fracing unavailable due to local frac bans imposed by towns and cities, according to Bloomberg, the economic appeal of fracing has faded in New York, according to Martens. “The economic benefits are clearly far lower than originally forecast,” Martens said. “The low price of gas only exacerbates this.”

Martens said the five-year study on fracing would be released next year. Meantime, the 184-page study from the New York State Department of Health entitled “A Public Health Review of High Volume Hydraulic Fracturing for Shale Gas Development” may be downloaded here.

Snapback Reaction?

The American Petroleum Institute criticized the decision in a press release issued shortly after the announcement.

Karen Moreau , New York State Petroleum Council Executive Director, said: “Today’s action by Governor Cuomo shows that New York families, teachers, roads and good-paying jobs have lost out to political gamesmanship. This is the wrong direction for New York. Robust regulations exist at the federal and state levels nationwide for natural gas development and environmental protection. A politically motivated and equally misinformed ban on a proven technology used for over 60 years – throughout the country to great success – is short-sighted and reckless, particularly when New York depends on safely produced natural gas just over the border in Pennsylvania.”

Brian Sampson, President of the Empire Chapter of Associated Builders & Contractors, believes the ruling will be appealed in court. “”I certainly think someone will file a lawsuit challenging this,” he said in an interview with  “I certainly think if you’re a landowner in the Southern Tier, the state has just made a decision that will prevent you from benefiting from the riches that are below your feet.”

Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. The company or companies covered in this note did not review the note prior to publication. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.

Legal Notice