To Frack or Not to Frack: An Indecisive Cuomo

by Jackie Moreau on January 12, 2012

in Blog, Features

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There is no question that the controversial process of hydraulic fracturing (“fracking”) for natural gas in New York State’s Marcellus Shale Formation is the current dividing issue among New Yorkers.  There are those who spout environmental litanies of an outright ban on the process and those who lionize economic growth over such anti-risk hysteria.  But amongst all of this potent polarization, Gov. Andrew Cuomo neglected the issue entirely in his second State of the State Address he made last week, leaving both groups dumbfounded.

Cuomo stated, “Our challenge for 2012 is this: How does government spur job creation in a down economy while limiting spending and maintaining fiscal discipline? The answer is forging public-private partnerships that leverage state resources to generate billions of dollars in economic growth and create thousands of jobs.”  You would think fracking would be a no-brainer in his economic blueprint since itwould “spur job creation” without costing taxpayers a dime; however, fracking took form of the elephant in the room as Cuomo outlined his plans for “economic development:”

  • Offer national and global industries up to $1 billion in multi-year economic development incentives to come to Buffalo, NY (third poorest city in the U.S.).  He hopes that by inviting large investments in the growth industries that are similar to those which made the Capital Region into a world-class center for nanotechnology innovation and the home of major semiconductor manufacturers will be replicated in Buffalo.
  • A master plan of $2 billion in “estimated private sector development funds” for the Jacob Javits site in New York City to create a mixed use facility and revitalize the West Side with 18 acres of planned development.
  • Utilize New York’s tourism strengths by building “the largest convention center in the nation” (3.8 million square foot) at the Aqueduct Race Track venue in Queens with a $4 billion private investment, as well as open up New York to casino gambling.
  • A $200 million second round of Regional Economic Development Awards, building on the success of the Regional Economic Development Councils, “allowing each region to continue creating its own economic destiny.” In addition, the New York Open for Business campaign will improve promoting New York as a place to invest and expand its promotion tourism by marketing its regional attractions like the Adirondacks, Catskills, wine country, and Long Island beaches.
  • The creation of the New York Works Fund and Task Force to coordinate and leverage capital investment—twenty private sector dollars to every public dollar—supporting projects to improve or replace more than 100 bridges, repair work to 2,000 miles of roadways, upgrade 90 municipal water systems, improvements to 48 state parks and historic sites, and repair work to 114 flood control projects and dams.
  • $2 billion private sector funded “Energy Highway” system that will tap into renewable energy potential in Upstate and Western NY “to ensure a cost efficient and reliable supply of power is available to fuel the state’s economic growth,” bringing “low-cost power to meet the tremendous energy needs in Downstate New York. The plan also calls for the repowering of old and dirty plants to stop pollution in urban neighborhoods.”
  • Investment in solar with the launch of the NY-Sun Initiative to expand solar energy production in the state while keeping costs under control to protect the ratepayer. NY-Sun will help increase competitive procurement of large, commercial-sized solar projects and expand rebate programs for residential and commercial small-to-medium systems.
  • Expedite On-Bill financing, a statewide program that allows consumers to retrofit their homes with energy efficient upgrades and pay for the cost on their monthly energy bill.
  • A master plan for accelerating energy-saving improvements in state facilities to promote energy efficiency, designed to save millions of dollars through new economical energy efficiency measures and would come at no cost to the state as the upfront investment would be repaid from the energy savings.
  • To support farmers and help the agricultural industry grow: access to low interest loans that will assist farmers with infrastructure upgrades, New York State Linked Deposit Program, will be expanded to provide farmers in any part of the state with capital at affordable interest rates.  The FreshConnect farmers’ market program will be expanded to provide more residents with healthy, New York-grown food. The Governor also called for the creation of “large-scale distribution hubs strategically located across the state to improve promotion of produce grown by New York farmers.”

Some of these tactics for improving New York’s economy might hold value,  but all are costly to the taxpayer.  Shale gas development in the Marcellus, on the other hand, has attracted billions of dollars from both national and international investors.  It would thus create jobs and wealth at no cost to the government.  Areas in New York are also benefiting from shale gas drilling occurring in the Marcellus and other shale plays with the drop in the price of natural gas.   Property owners like farmers who own land accessible to shale gas would also do well if the moratorium was lifted, allowing them to become more financially secure through gas leases and royalty money.

Yesterday marked the close of the 4-month comment period on fracking in New York, which has banned the technology for about 4 years now. As of Monday, a total of 21,000 comments were submitted.  From environmental groups, Cuomo received nearly 500 letters and a petition with over 20,000 signatures citing what they consider defects in the Department of Environmental Conservation’s 1,500-plus-page draft oversight plan.  On Tuesday, 10,000 comments were submitted from a pro-drilling landowners’ group.  With such a schism on what a “new” New York should look like among its citizens, Cuomo’s recent lack of “yea” or “nay” on fracking is unsettling.

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