Taxing gas wells

DEC officials ‘looking at’ more protection and study

By FRITZ MAYER

MONTICELLO, NY — There is a mechanism in place whereby towns can collect tax revenue from profitable gas wells that almost everyone agrees are coming to the area. The same also applies to school districts and special districts, such as fire districts and water districts.

That was the most welcomed news coming out of a meeting between Sullivan County supervisors, legislators and other stakeholders with two officials from the Department of Environmental Conservation (DEC) and New York State Assemblyman William Parment at the government center on July 14.

Parment, who has decades of experience with gas-drilling issues as a lawmaker and a landowner in the western part of the state, explained that town assessors have the authority to raise assessments on properties with gas wells based on the “production value” of the well. The production value, in turn, is determined by the New York State Office of Real Property and the DEC.

County lawmaker David Sager said this was the first that he had heard that local communities had a way to collect revenue to help mitigate the impacts of gas drilling, and he welcomed the news. There were, however, serious concerns put forward by Sager and his colleagues.

Chief among them was the prospect that contaminated fluids brought up from the wells could be stored in open pits for 45 days instead of steel containers. Several lawmakers noted that the county has experienced severe flooding in the past several years, and the flooding of open pits could be environmentally very damaging.

Sager called the question of requiring steel containers rather than open pits “a no-brainer.” This sentiment was echoed by Tina Palecek, supervisor of the Town of Highland, and Linda Babicz, supervisor of the Town of Callicoon.

Stuart Gruskin, DEC Executive Deputy Commissioner, said the issue was something that the DEC is “looking at.”

Another topic that local officials brought up repeatedly is that the Environmental Conservation Law (ECL) preempts local planning in zoning laws in many cases.

Dan Sturm, supervisor of the Town of Bethel, said, “We’re concerned about light, noise, water, zoning; you’re going to come in here and ignore our laws.”

Dr. William Pammer, the county planning commissioner, reinforced that notion when he said the ECL, which is 28 years old, needed to be updated with a more home-rule orientation.

Parment responded that he thought the state has done a pretty good job of regulating the gas and oil industries, and that any change would require legislation from Albany. Is the legislature inclined to amend the law? “Your guess is as good as mine,” Parment said.

Another matter that sparked repeated questions was whether gas drilling in the Marcellus Shale is sufficiently unique that it requires additional study regarding environmental impacts. Gas drilling regulations for the state are based upon a Generic Environmental Impact Study (GEIS) that dates to the early ’90s. Gruskin said the DEC is “looking at” whether a supplemental GEIS specific to the Marcellus Shale would be needed. Asked if county and town municipalities would be involved in the process, if it occurs, Gruskin repeated that this would be considered. Lawmaker Alan Sorensen suggested that the GEIS be done county by county because of the unique geological makeup throughout the state.

Noel van Swol spoke from a much different point of view than those voiced by elected officials. He said that as one of the founders of the Sullivan Delaware Property Owners Association, he gets up to 30 calls a day from people wanting to know about drilling. He asked that no new taxes be put on landowners.

“This is the most popular thing ever to happen to this county,” he said. He made similar remarks at a meeting of the Government Services Committee on July 10, when he said if a vote on whether to allow drilling or not was held today, “the environmentalists would lose.”

At that meeting, Denise Frangipane, a resident of Bethel, countered, “This is not an issue between environmentalists and landowners, this is an issue that on one level could polarize a community, and, on a different level, could bring the community together.”

In concluding, Gruskin said that, so far, only three permits for wells in the Marcellus Shale have been applied for, and the DEC and others have time to deal with this in a reasonable way before the real “gas rush” takes off.