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December 4, 2013

Fracking firm threatens to sue over delay

By Joe Mahoney Staff Writer
The Daily Star

---- — COOPERSTOWN — A lawyer for a financially insolvent gas company that had leased tens of thousands of acres in Chenango County said Tuesday he has served New York’s top environmental regulator with a “demand letter” intended to spur the Cuomo administration to reach a decision on fracking rules.

“We’re giving them two weeks to put up or shut up,” Thomas West, an Albany-based lawyer, said in a telephone interview. He called the letter sent to state Environmental Conservation Joe Martens “a prerequisite to a lawsuit” that would be commenced against the state on Dec. 17.

The lawsuit, he said, will ask a state judge to impose a timetable on Martens’ agency to complete the Supplemental Generic Environmental Impact Statement relating to high volume hydraulic fracturing for shale gas in New York.

West’s letter to Martens argued that Norse Energy, which less than three years ago had an office staffed by 26 people in Norwich, was forced into bankruptcy proceedings as a result of the “protracted bureaucratic delay” in approving the rules for gas drilling.

Gov. Andrew Cuomo has said he is awaiting a health impact study he has assigned state Health Commissioner Nirav Shah to complete. The state agency’s nearly 6-year-old environmental impact study and new drilling rules have been placed on hold while Shah’s study continues. Shah, who like Martens is a Cuomo appointee, has been given no deadline to complete the study.

“I think that’s just a sham,” West said of the health study. “It was conjured up by the governor in response to concerns from the fractivists (opponents of shale gas drilling).

West’s letter alleged that Martens’ agency is violating the State Environmental Quality Review Act (SEQRA) and has neglected “statutory mandates” that it promote and develop the state’s oil and gas resources.

The demand letter also stated that the referral to Shah was “arbitrary, capricious and amounts to an illegal delegation of your decision-making under SEQRA.”

The letter concludes: “In the final analysis, the department’s protracted delay and refusal to complete the SGEIS process must come to an end.”

When contacted by The Daily Star, a spokesman for Martens issued no immediate response to West’s allegations.

However, a New York City-based lawyer for the environmental organization Earthjustice scoffed at West’s attempt to blame the state for Norse Energy’s financial woes.

“This looks like a company that made very bad investments, and now wants to blame somebody else,” said Deborah Goldberg, the Earthjustice attorney.

Goldberg, who is involved in the legal effort to uphold the town of Middlefield’s drilling ban, branded West’s demand letter “an extraordinary weak set of claims. I’m sure the state will have no problem defending if they go forward with this suit.”

West, in response to questions from a reporter, declined to specify who is paying for his legal services, other than to describe the “funding sources” as investors who are frustrated by the state’s delay in completing the drilling rules. He also confirmed that Oslo-based Norse Energy is not paying the legal bills.

West said New York is now viewed by players in the energy industry as “dead last in the country” among states where they would consider setting up shop.

Scott Kurkoski, a lawyer for the pro-drilling Joint Landowners Coalition of New York, an umbrella organization that includes the Unatego Area Landowners Association, called Norse Energy “an ideal candidate” to bring a legal challenge against the delay in the drilling regulations.

“We’re pleased that Norse is doing this,” Kurkoski said.

West is also one of the lead attorneys in the gas industry’s effort to nullify the home rule bans against drilling adopted by Middlefield and Dryden. Norse Energy took over as the plaintiff against Dryden after Anschutz Exploration Corp. opted not to pursue an appeal when both Dryden and Middlefield prevailed when the twin cases were decided by lower courts.

The state Court of Appeals — New York’s highest tribunal — is expected to take up the home rule issue in the coming year. The gas industry contends that the towns have exceeded their authority, insisting that only the state Department of Environmental Conservation should regulate drilling activities.

The gas industry argues hydraulic fracturing for shale gas is being done safely in Pennsylvania, Ohio and several other states. Opponents of the technique maintain the technique poses unacceptable environmental risks such as contamination of ground water.