oil & gas state land leasing workshops - new york state
TRANSCRIPT
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Oil & Gas State Land Oil & Gas State Land Leasing WorkshopsLeasing Workshops
Corning, New YorkJanuary 9 & 10, 2003
New York State Department of Environmental Conservation
Division of Mineral Resources
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Division of Mineral ResourcesDivision of Mineral ResourcesThe Division of Mineral Resources is responsible for ensuring the environmentally sound, economic development of New York’s non-renewable energy and mineral resources for the benefit of current and future generations.
Two Major Regulatory Programs– Mined Land Reclamation – Oil, Gas and Solution Mining
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Oil and Gas OverviewOil and Gas OverviewOil & gas regulatory programTrenton/Black River gas drillingLeasing state land
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Oil and Gas Development in Oil and Gas Development in NYSNYS
1821 – Fredonia natural gas street lights1860’s – Oil discovered in New York1880’s – Peak oil production1940’s – Second peak of oil productionOver 70,000 wells drilled in New YorkFirst regulatory program enacted 1961Oil, Gas & Solution Mining Law 1981
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Oil, Gas & Solution Mining Oil, Gas & Solution Mining LawLaw
Regulate drilling, operation & plugging of– Oil, gas, storage and solution mining wells– Stratigraphic, geothermal and brine disposal wells
Regulate underground natural gas & LPG storage facilitiesPrevent waste, protect landowner correlative (mineral) rightsLease state lands for oil and gas developmentEnvironmental protection
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State Land Leasing ProgramState Land Leasing Program
Leasing of state lands for oil & gas authorized by law since 1930’sDEC oil & gas leasing agent for all state lands except Forest Preserves, State Parks, lands under Lake OntarioApproval of surface managers needed
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State Land Leasing SummaryState Land Leasing Summary350,000 total acres of state land in central and western NY61,000 acres leased for oil and gas exploration & production Over 100 wells on state landRevenues deposited in General Fund, except Wildlife Management Area revenues which are deposited in the Conservation Fund
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State Land Leasing ProcessState Land Leasing ProcessO&G companies nominate areas for leasingBid guarantee deposit @ nomination: $500 + $1/acre. Applied toward successful bidDivision of Mineral Resources (DMN) consults surface managers (e.g., Lands & Forests/Fish & Wildlife) for their approval and site-specific lease conditionsIf land managers approve, DMN schedules competitive lease sale of mineral rights
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May 1999 State Lease SaleMay 1999 State Lease Sale
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State Land Leasing RevenuesState Land Leasing Revenues
Royalties, bonus bids, and delay rentals1998: $279,5231999: $3,206,4062000: $183,4082001: $379,845
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Proposed 2003 SaleProposed 2003 Sale
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Leasing Program RolesLeasing Program Roles
Division of Mineral Resources– Leasing process and lease stipulations – Well drilling permit reviews– Well spacing and unitization
Lands & Forests; Fish, Wildlife & Marine Resources– Lease stipulation process– Tract assessments/exclude sensitive areas from surface
disturbance– Provision of Temporary Revocable Permits– Overall stewardship of state lands
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1992 Final Generic Environmental Impact Statement: Site review under SEQR, specific Environmental Assessment Form, other permit coordinationSetbacks and spacingSite reclamation and restorationWell plugging conditions
Well Life Cycle Environmental Well Life Cycle Environmental RegulationRegulation
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PrePre--site Inspectionssite Inspections
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Drilling Inspections Drilling Inspections
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SRA 2, Drilling InspectionsSRA 2, Drilling Inspections
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Site Reclamation InspectionsSite Reclamation Inspections
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Reclaimed Site, SRA 2 WellReclaimed Site, SRA 2 Well
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SRA 2 Well, Reclaimed SiteSRA 2 Well, Reclaimed Site
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PostPost--Operation Inspections, Operation Inspections, Producing WellProducing Well
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Well Plugging InspectionsWell Plugging Inspections
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PostPost--Operation Inspections Operation Inspections ––Plugged WellsPlugged Wells
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Trenton/Black River DrillingTrenton/Black River Drilling
New deep gas discoveriesChanged nature of NY activity– Deep gas (1-2 miles) v. shallow oil & gas– 25x greater per-well production– Well spacing of 200-640 acres v. 40-80 acres– Well costs of $1,000,000 v. $100,000– Central New York, moving east and west
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Trenton/Black River Trenton/Black River ReservoirsReservoirs
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Geology: Glodes Corners Road FieldGeology: Glodes Corners Road Field
Graben feature is about 7 1/2 miles long and 4000 feet wideInterrupted by transcurrent faulting near eastern end
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New Investment in NYS New Investment in NYS $1 million per well drilled More than $150 million invested since 1996 More expected…Millions in future royalties to landowners ($6.3 million distributed in 2/02 to landowners)Significant local tax revenuesLocal economic multipliersHelp meet state clean energy needs
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Trenton/Black River SummaryTrenton/Black River Summary
170 wells drilled since 1995 (includes 49 sidetracks)
– 42 permit applications in 2002
14 new gas fields discovered– Steuben = 6, Chemung = 4, Schuyler = 2, Yates = 1, Broome = 1
6 Commissioner Well Spacing Orders issued
2000 Production = 5.2 BCF – 70% increase over 1999
– 30% of NYS total of 17.7 BCF
2001 Production = 15.3 BCF– 55% of NYS total of 27.9 BCF
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14.9
1.6
13.8
3.0
12.6
5.2
12.6
15.3
0.0
10.0
20.0
30.0
1998 1999 2000 2001
New York Production in BCF Trenton/Black River Increases
Other Fms T/BR
New York Gas ProductionNew York Gas Production
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Trenton/Black River FieldsTrenton/Black River Fields
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DEC ResponsibilitiesDEC ResponsibilitiesReview, condition & issue permitsInspections & monitoring: 24/7Respond to local governments, landowners & publicSpacing hearings, compulsory integrationState land leasing requests
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DEC Outreach and DEC Outreach and InformationInformation
WebsiteLandowner information brochurePublic meetings & presentations– Region 8: 26 presentations, 3,150 attendees– AAPL, CFAB, FWM Board, NY Conservation
Council, Town Planning BoardsIOGCC Leasing Workshop – 4/22/02
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Erwin GMA #2 Well, 11/2001 Erwin GMA #2 Well, 11/2001 ShutShut--in Wellin Well
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BallamBallam--Carter Drilling OperationsCarter Drilling Operations
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Muck Farm Field, Snyder #1 Muck Farm Field, Snyder #1 KeukaKeuka Lake AreaLake Area