How Will Wall Street Crisis Affect Gas Drilling?
Published: October 8th, 2008
By: Melissa deCordova

NORWICH – The primary player in Chenango County’s natural gas industry said Tuesday that the world’s financial crisis has created challenges that will affect its exploration and drilling plans.

Nornew Inc., a subsidiary of Norse Energy of Norway, planned to drill nearly 200 wells in Chenango County over the next four years. Twenty-one are planned for Preston alone, in addition to pipelines and connector lines south through Oxford, Coventry and Bainbridge.

Two successful finds in Smyrna in the Herkimer formation last month, just days before Wall Street began to crumble, boded well for the company’s predictions for future success in that strata and others, including the highly-prized Marcellus Shale.

New reports this morning indicate that Washington’s $700 billion plus rescue package has restored little if any confidence in the global marketplace, as the fall-out from U.S.’s subprime mortgage crisis continues to flow through London, Russia and Tokyo.

“The challenge is obviously where prices are going for oil and natural gas and what the ability to access funds to go out and drill will be,” Nornew spokesman and attorney Dennis Holbrook said. “It’s a reminder to all of us that we have to tighten our belts and be as conscientious as we can to conserve costs.”

The natural gas industry in New York also faces hurdles presented by the state Department of Environmental Conservation. On Monday, the NYSDEC released a preliminary review process for proposed, new environmental regulations of natural gas drilling in the Southern Tier. The 45-page document is the first step in developing supplemental guidelines for issuing permits for gas wells using horizontal drilling technology, the type needed to release the energy source for shale.

Gov. David Paterson requested a supplement to existing regulations to address the potential environmental hazards and water usage for drilling, and the impact on the New York City watershed.

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