ELISABETH ON ENERGY POLICY: The viability of energy policy decisions involves consideration of the risks, hazards and associated costs before determining the net benefit. Consideration must also be given to who bears the risks and the costs and whether that makes the energy choice sustainable for society as a whole.
TO READ ELISABETH'S PROPOSED RISK MANAGEMENT PLAN FOR HYDRAULIC FRACTURING, GO TO:
Ecocentric post link: http://www.ecocentricblog.org/2012/07/10/if-nys-governor-cuomo-green-lights-fracking-how-can-we-manage-the-risk/
SENATE HEARING ON HYDRAULIC FRACTURING , APRIL 25, 2012
TESTIMONY OF ELISABETH N. RADOW, ESQ.
THANK YOU SENATOR AVELLA AND COLLEAGUES FOR HOLDING TODAY’S HEARING AND FOR
INVITING ME TO TESTIFY. MY NAME IS ELISABETH RADOW. I AM A LIFELONG NEW YORKER, A
LAWYER AND A MOM. I CHAIR THE HYDRAULIC FRACTURING COMMITTEE FOR THE LEAGUE OF
WOMEN VOTERS OF NEW YORK STATE. I SPEAK TODAY ON MY OWN BEHALF.
MY PUBLISHED RESEARCH ON GAS LEASES, RISK ALLOCATION AND MORTGAGES BRINGS ME HERE
TODAY. MY LAW PRACTICE HAS INCLUDED LAND ACQUISITION, FINANCE AND CONSTRUCTION.
ALL NEW YORKERS NEED A PLACE TO CALL HOME AND SAFE FOOD TO EAT. NEW YORK STATE
DEPENDS UPON A RELIABLE REAL PROPERTY TAX BASE. THESE BASICS ARE AT RISK WITH
UNCONVENTIONAL GAS DRILLING.ACROSS AMERICA, PROPERTY OWNERSHIP IS BEING
REVOLUTIONIZED BY THE PROLIFERATION OF THE MULTI-STEP, HEAVY INDUSTRIAL DRILLING
OPERATIONS ON THE LAND SURFACE OF PRIVATE HOMES AND FARMS.
HOME REPRESENTS A FAMILY’S MOST VALUABLE ASSET. FROM A PROPERTY VALUE
STANDPOINT, THINK OF HOME AS A BUNDLE OF RIGHTS: THE RIGHT TO CONSTRUCT, GET A
MORTGAGE LOAN, LEASE AND SELL THE PROPERTY; THE RIGHT TO CLEAN RUNNING WATER,
ELECTRICITY, A ROOF OVER ONES HEAD AND MOST IMPORTANT, A SAFE PLACE TO RAISE
CHILDREN, CROPS OR CATTLE, OR ALL OF THE ABOVE. AMERICANS PAY FOR THESE RIGHTS
WHEN WE PURCHASE OUR PROPERTY, AND EXPECT THESE RIGHTS TO CONTINUE UNTIL WE
SELL. WE WANT THE PROPERTY VALUE TO INCREASE. SO DOES THE STATE. OUR TAX BASE
DEPENDS UPON IT.
UP TO NOW, HOME HAS REPRESENTED THE ONE PLACE PEOPLE HAVE CONTROL. GAS LEASES
GRAB HOMEOWNER CONTROL. THEY GIVE THE GAS COMPANY THE FREE RIGHT TO
SELL THE LEASE OR TAKE IN INVESTORS WITHOUT HOMEOWNER CONSENT. THIS MEANS
THE HOMEOWNER HAS NO CONTROL OVER WHO COMES ONTO THEIR PRIVATE PROPERTY TO
DRILL, OR THE QUALITY OF THE WORK THEY PERFORM. BECAUSE OF TRENDS IN GAS LEASE
FINANCING, NOW HOMEOWNERS HAVE TO ACCEPT THE POSSIBILITY THAT FOREIGN INTERESTS
WILL CONTROL THE GAS LEASE ON THEIR PROPERTY. CONSIDER THAT WHILE THE MORTGAGE
LENDER EXPECTS THE HOME TO RETAIN ITS VALUE FOR THE 30 YEAR LIFE OF THE LOAN, A
GAS LEASE INVESTOR ON THAT VERY SAME PROPERTY CARES MORE ABOUT EXTRACTING
THE MOST GAS FOR THE LEAST EXPENSE. AS WE SAW WITH THE BP OIL SPILL, CUTTING
CORNERS FOR THE BOTTOM LINE CONTRIBUTED TO THAT CATASTROPHE. HERE WE ARE
TALKING ABOUT HIGHLY LEVERAGED LEASES ON PEOPLE’ S PROPERTY. WHAT IMPACT WILL
THAT HAVE ON YOUR CONSTITUENTS, THEIR CHILDREN AND NEW YORK’S FARM PRODUCE?
STANDARD GAS LEASES GRAB HOMEOWNER CONTROL OF PROPERTY USE BY GIVING THE GAS
COMPANY THE RIGHT TO ESTABLISH SURFACE OPERATIONS, CREATE PERPETUAL, UNFUNDED,
ROAD AND UTILITY EASEMENTS, AND THE RIGHT TO STORE GAS UNDERGROUND FROM ANY
SOURCE. GAS LEASES INTRODUCE HAZARDOUS ACTIVITY AND HAZARDOUS SUBSTANCES,
PRACTICES WHICH ARE EXPRESSLY PROHIBITED BY STANDARD MORTGAGES. THE LEASES DO
NOT REQUIRE THE GAS COMPANY TO FUND OR PERFORM THE MAINTENANCE, REPAIR AND
ULTIMATE RESTORATION OF THE EASEMENTS AND OTHER SURFACE USES. SO THAT EXPENSE
STAYS WITH THE PROPERTY OWNER.
THE GAS COMPANY 10-K’S FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
CHARACTERIZE THE DRILLING LIFECYCLE AS INHERENTLY RISKY ACTIVITY AND INCLUDE IN THE
LIST OF HAZARDS: BLOW-OUTS, EXPLOSIONS, PIPE FAILURES AND UNCONTROLLABLE FLOWS
OF NATURAL GAS, OR WELL FLUIDS. WELL-WATER CONTAMINATION CAN OCCUR AT ONE OR
MORE POINTS IN THE DRILLING PROCESS, INCLUDING FROM LEAKS, SPILLS AND CRACKED
WELL CASINGS. THE STATES OF PENNSYLVANIA, AND WYOMING PROVIDE LIVING EXAMPLES.
AGRICULTURE REPRESENTS ONE OF NEW YORK’S MOST IMPORTANT ECONOMIES. COUNTIES
COVERING THE MARCELLUS SHALE REGION INCLUDE NUMEROUS FARMS. SAFE FOOD
REQUIRES UNCONTAMINATED WATER, AIR AND SOIL. A PROPERTY WITHOUT POTABLE WATER
WILL LOSE SUBSTANTIAL VALUE AND MAY NOT SELL OR MAY CAUSE A FARM TO FAIL, CAUSING
RIPPLE EFFECTS ON THE TAX BASE.
STANDARD GAS LEASES FAIL TO MENTION INSURANCE. HOMEOWNERS REMAIN POTENTIALLY
LIABLE FOR THE ACTIVITY THAT OCCURS ON THEIR PROPERTY, IF IT IS NOT EFFECTIVELY
DELEGATED. HOMEOWNERS INSURANCE EXCLUDES FROM COVERAGE INDUSTRIAL ACTIVITY
AND LEAVES HOMEOWNERS VULNERABLE TO LOSING THEIR INSURANCE COVERAGE.
A MORTGAGED HOME WITHOUT HOMEOWNERS INSURANCE WILL RESULT IN LOSS OF THE
MORTGAGE. IF A PERSON CANNOT GET A MORTGAGE OR KEEP A MORTGAGE, THE HOUSE
WILL BE DIFFICULT TO SELL. ALREADY, MORTGAGE LENDERS IN NEW YORK ARE CONNECTING
THE DOTS AND DENYING LOANS. WHAT WILL THAT DO TO THE TAX BASE?
I URGE ALL NEW YORK SENATORS TO EMBRACE ENERGY OPTIONS THAT WILL PRESERVE
PROPERTY VALUE AND NEW YORK’S PROPERTY TAX BASE. BASED UPON THE LIMITED PROPERTY
OWNER PROTECTIONS IN PLACE, CURRENT SHALE GAS EXTRACTION METHODS IF PERFORMED
ON PEOPLES PRIVATE PROPERTY OR FARMS WOULD POSE A SUBSTANTIAL RISK. THANK YOU.