New York Governor Andrew Cuomo’s (D) administration announced on Wednesday, December 17, 2014 that it would ban hydraulic fracturing in the State of New York citing potential health risks that might accompany fracking.
The decision ends what has been an ongoing debate in New York over the benefits and hazards of fracking. While many in the state saw the natural gas from Marcellus shale, a portion of which is located under southern New York State, as a key economic resource that would create a surge in domestic-energy production and millions of new jobs, others argued that it was too dangerous. This ruling will heavily impact energy companies that have been waiting for years to use the thousands of acres of land that they have leased in New York State. It also impacts dairy farmers in New York’s economically deprived Southern Tier region who had hoped that leasing land to petroleum companies would help pay property taxes on their many acres of farmland.
Karen Moreau, the Executive Director of the New York State Petroleum Council, immediately responded to Cuomo’s decision. “Revenue from natural gas production supports road and bridge improvements, water and sewer projects, local housing initiatives, environmental programs and rehabilitation of greenways,” she said. She also argued that formerly economically deprived communities, just a few miles across the border in Pennsylvania, are now booming because of the jobs and tax revenues generated by the fracking industry. She said, “A politically motivated and equally misinformed ban on a proven technology used for over 60 years – throughout the country to great success – is short-sighted and reckless, particularly when New York depends on safely produced natural gas just over the border in Pennsylvania.”
This statewide ban on hydraulic fracturing ignores the potential benefits to New York residents of increased economic opportunity, job creation, and tax revenues, as well as America’s need for energy independence. If you have any questions on how this ban may affect your natural gas business, please contact the tax professionals at Schneider Downs.
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