That’s bad news for Australian firm Empire Energy Group which holds some 232,000 net acres of Marcellus Shale and 148,000 net acres of Utica Shale in western New York State and Pennsylvania.
Empire has assessed the potential of its areas as being almost 93 million barrels of oil equivalent with a prospective 203MMboe.
That seems likely to stay in the ground.
“In the end, there are no feasible or prudent alternatives that would adequately avoid or minimise adverse environmental impacts and that address the scientific uncertainties and risks to public health from this activity,” the Martens statement said.
Since New York State’s Department of Environmental Conservation started its review in 2008, fraccing has grown to become one of the most hotly contested, divisive issues wherever oil companies and communities meet in the developed world.
The oil industry in the US has already unleashed its lawyers and lobbyists, who will be looking for any legal missteps or statements that leave the state’s new law open to a challenge.
The state first launched its review of fraccing after companies began applying to drill horizontally into the gas-rich Marcellus Shale formation, which stretches across the state’s Southern Tier into the Catskills.
Over the years there have been multiple reports raising concerns about the fraccing process, culminating in yesterday’s statement.
“The Department’s chosen alternative to prohibit high-volume hydraulic fracturing is the best alternative based on the balance between protection of the environment and public health and economic and social considerations,” the findings statement reads.
In addition to a wide array of risks catalogued – to water and air resources, wildlife and ecosystems, communities, public health, the law says that fraccing contributes to climate change, may cause earthquakes, and will not deliver the potential economic benefits than previously estimated.
"In light of changing development patterns in the natural gas industry, the department considered revised projections in which the 20-year peak construction period ... would be reduced to 10 years to more realistically reflect the development that could be expected, which would then be followed by a 10-year gradual decline in production [which] would reduce employment projections, projected employee earning and property tax receipts," the document said.
The Federal Environmental Protection Agency recently issued draft study on the risks fraccing presents to drinking water, finding no widespread or systemic impacts on drinking water resources it did conclude there could be impacts, but there was insufficient pre- and post-fracturing drinking water data and a lack of long-term systemic studies but New York has gone its own way.
The ban in place now may not be permanent, and may be overturned, but it will be a long, hard fight.
In that time, the goalposts may shift.
The administration of New York governor Andrew Cuomo has announced a series of sweeping and ambitious clean energy goals for New York that, aims to make the state a global leader on clean energy and climate policy by reduce energy consumption in buildings 23% by 2030, mandating 50% renewable energy by 2030 and cutting to greenhouse gases 40% by 2030 from 1990 levels, decarbonising the state’s energy system.
That plan is backed by a range of initiatives, including the New York Green Bank, a 10-year $5-billion Clean Energy Fund proposal and a $1.5 billion large-scale renewable electricity fund.
In the face of that, and what could be another 10 years of environmental review to overturn yesterday’s law, large-scale investment in the Marcellus Shale in New York seems unlikely.
Parts of the affected area have already made protestations they will secede into Pennsylvania, which allows fraccing of the Marcellus Shale, the US’ single largest gas field, but succession seems highly unlikely.
