As Elie noted last month, Cornell has rightfully decided to postpone a decision on leasing its sizable Southern Tier land holdings to gas companies drilling for the sizable Marcellus natural gas deposits. Cornell wants to wait to see more evidence as to the environmental impact of drilling for the gas with a technique called hydro-fracking.
So the Sun is running an op-ed piece today that implicitly argues that Cornell should be playing a large role in the discussion when it comes to regulating the process.:
Oversight for natural gas drilling in New York is in the hands of Governor David Paterson and the DEC’s proposed regulations — local governments hold no power over the gas companies that drill in their area. Thus, should hydraulic fracturing be allowed under the proposed regulatory measures, gas companies would legally be able to dump millions of gallons of wastewater into local plants, which may lack the capacity to treat all the solvents in the fluid and would not have to publicly disclose what chemicals they have used.In addition to considering the immense trucking needed to haul the water to and from the well site and protecting New York’s gorgeous natural landscape, consider that under such loose regulations residents would be dependent on the good character of gas companies, geared to seek profit rather than societal well-being.
It's a critical issue that Cornell needs to weigh-in on, because only a land-grant institution like Cornell can gain the confidence of all interested parties, including government, industry, and the public at large. Currently, Cornell Cooperative Extension has an extensive website dealing with all of the issues involved.
What I haven't seen, however, is an estimate of how much the Marcellus Shale reserves could be worth to Cornell. Obviously the value of the gas deposits is subject to market swings, but given the University's structural deficit, it's definitely necessary to place the value of Marcellus within the context of the University's budget challenges.
In Tompkins County alone, Cornell owns 11,000 acres of land. (I actually haven't been able to track down the total number of acres that Cornell owns in New York State, but the University owns 400,000+ acres across the country. If you have a more detailed breakdown of the University's land holdings, please let me know.)
Now, according to estimates by the University's department of Earth and Atmospheric Sciences, each acre of Marcellus Shale is worth approximately $30,000 over the course of the next 10-15 years. That's assuming roughly 6,000,000 cubic feet of gas per acre and a payment of $5 per thousand cubic feet. And prices have jumped around between $3 and $8 in the past couple of years.
So in Tompkins County alone, Cornell could yield $330 MM over the next ten to fifteen years from Marcellus Shale drilling. That's $30 MM a year for the next ten years, or around a quarter of the University's structural $135MM deficit, or just about the cost of the University's increased financial aid packages in recent years.
The question, of course, is whether or not that is worth the cost of potential drinking water contamination and all of the associated health risks. Interestingly, the same Cornell report indicates that wind power actually would produce 25% more energy per acre than drilling. The difference of course, is that wind power is clean and endless.
