New Berlin Supervisor Blasts County Board For Inaction On Compulsory Integration Order
Published: February 12th, 2010
By: Melissa deCordova

New Berlin supervisor blasts county board for inaction on compulsory integration order

NORWICH – An uncharacteristically lengthy discussion of natural gas issues capped February’s meeting of the Chenango County Board of Supervisors this week.

A discussion of compulsory integration restrictions, hydrofraking pollution, municipal roadway ordinances and forming a consensus on the county’s position on drilling ensued for 25 minutes and drew comments from eight of the county’s 23 supervisors.

The exchange followed board business that included the adoption of 25 resolutions, a Commerce Chenango budget presentation and committee appointments. It was one of the longest monthly meetings held in the recent past.

The subject of natural gas exploration and drilling, whether it be into lucrative shale formations, such as the Marcellus and Utica, or immediately promising Herkimer or Vernon sandstone strata, has consumed not just Chenango County and the Southern Tier, but all of New York State. It is currently pitting upstate farmers desperate for income versus city dwellers who fear the byproduct of drilling could pollute their upstate drinking water supplies.

Supervisor Ross Iannello kicked off the discussion about local exploration and drilling by asking for immediate board support in leasing county-owned land at Preston Manor. The land is being integrated into a Norse Energy, Inc. spacing unit at an adjacent well site. Iannello and other supervisors who make up the county’s Natural Gas Committee have been pushing the board to take advantage of an opportunity to profit.

Only a short window of time remains to enter into a contract. The New York State Department of Environmental Conservation will hold a compulsory integration hearing on the order in early March. (A previous mid January hearing was postponed.)

It was a call the Town of New Berlin supervisor made upon first learning of the opportunity last fall, in hopes of garnering a more lucrative royalty payoff for Chenango County taxpayers. Iannello repeatedly asked for the board’s support this week, both on Monday and in a Planning and Economic Development Committee held on Tuesday. (See sidebar.)

“We are going to lose revenue. ... The bottom line is if we don’t move on this, we are only going to get 12 .5 percent, not the 25 percent that would be possible for taxpayers,” he said.

Iannello requested such a resolution in the Planning and Economic Development Committee in December, but his motion died, he said, because the committee changed directors.

“It still bothers me,” he told the board. “I want to find some way of getting this land leased.”

“We had months and months to do this already,” he said in an interview following Monday’s board meeting.

Chenango County Attorney Richard Breslin has advised lawmakers against negotiating with companies for the higher royalty option available on standard compulsory integration notices. Breslin cites County Law 215’s 5-year lease contract limitations. Gas companies would require longer terms due to the nature of production.

Iannello suggested looking for “a possible way of getting around the law,” by contacting companies that might renegotiate after the five-year time period. He said 215 permits consecutive lease periods of 5 years.

The opportunity presents a second time that county land in Preston has been involved in an adjacent well’s spacing unit, and the county has elected to take the integration order’s least profitable option. Breslin remained silent during the meeting, often shutting his eyes and leaning back in his chair as the natural gas discussion ensued.

At present, state representatives have sponsored a bill in both houses that would amend County Law 215. Iannello suggested that the amendment might pass in the very near term.

“I know the state takes forever to do things, but somehow I don’t think it’s going to take them five years to amend 215,” he said.

In regular business, and as advised by Breslin, county lawmakers adopted a resolution that would enable the board to enact any amended legislation, once it is passed at the state level. The Senate and Assembly bills are sponsored by Sen. Thomas W. Libous, Assemblyman Bill Magee and Assemblyman Clifford W. Crouch.

Chenango County Natural Gas Committee Chairman Peter C. Flanagan, D-Preston, deferred several of Iannello’s questions to the county’s attorney. Flanagan said while he didn’t know of any specific offers on the Preston Manor land, he agreed with Iannello that companies might be interested in leasing.

“We could find companies out there that might trust us, and after five years, let us sign up again,” Flanagan said. “But, it’s a lot of work, and is the board going to give me the authority to speak for it? We don’t’ have a lot of time for a proposal.”

“I’m sure the taxpayers aren’t going to cut our fingers off if we take the time necessary to do this,” said Iannello.

Town of Preston park land was included in the same well spacing unit as the county. The Preston Town Board passed a resolution to surplus the park land, and has been negotiating with a company that is interested in leasing it in place of the integration order.

Board of Supervisors Chairman Richard B. Decker said he didn’t see why the board “couldn’t take a look at it (contacting companies).” However, he suggested that doing so by the deadline was “a dead issue.”

“If what the industry says is true, we are going to just continue to get integrated down the road. We can look ahead, and put together an RFP (request for proposal),” he said.

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