DEEP DRILLING, DEEP POCKETS:

Expenditures of the Natural Gas Industry in New York to Influence Public Policy PART III: Campaign Contributions

A Report by Common Cause/New York January 2012

74 Trinity Place, Suite 901 New York, NY 10006 www.commoncause.org/ny

This report was prepared by Susan Lerner, Deanna Bitetti and Brian Paul of Common Cause/New York with the assistance of Common Cause/NY interns Louis Cholden-Brown, Katie Claro, and Christina Levin

We gratefully acknowledge the support of the Park Foundation

Contact Brian Paul at 212-691-6421 or via email at bpaul@commoncause.org with any questions you may have.

OnJune30,2011GovernorAndrewCuomoliftedayearlongmoratoriumonthepracticeofhigh volumehydraulicfracturing(fracking)inNewYorkStateputinplacebytheStateLegislatureandhis predecessorGovernorDavidPaterson.GovernorCuomofurtherdirectedtheDepartmentof EnvironmentalConservation(DEC)toreleasethefirstrounddraftoftheSupplementalGeneric EnvironmentalImpactStatement(dSGEIS). Immediatelyuponissuingthesedirectives,GovernorCuomoappointedaHighVolumeHydraulic FracturingAdvisoryPanelresponsiblefordraftingrecommendationsaimedatensuringthatDECand otheragenciesareenabledtoproperlyoversee,monitor,andenforcerulesgoverningdrilling procedures,aswellastomakerecommendationsonhowbesttomitigateimpactstolocal governments. 1 OnSeptember7th2011,GovernorCuomosDECofficiallyreleasedthereviseddraftSupplemental GenericEnvironmentalImpactStatement(rdSGEIS)forhighvolumehydraulicfracturing(fracking)in NewYorkState. 2 ThepubliccommentperiodwillendJanuary11,2012andhasincludedonlyfour publichearingsfortheentirestate.Inaddition,DEChasnotcommittedtoforestallpermittinguntil regulationshavebeenfinalized.Byissuingdraftregulationsbeforetheenvironmentalreviewprocessis complete,DECisdeprivingNewYorkersoftheopportunityfortheircommentstobeconsideredinthe developmentofthosedraftregulationsandinlightofthefinalSGEIS. Goodgovernancerequiresathoughtfulanddeliberativeapproachwheneverwearelookingtocreateor implementpublicpolicydecisions.Thehydrofracturingdebateisacomplexissuewithextraordinary economicandenvironmentalconsequencesforNewYorkState.CommonCause/NYhasshownover andoveragainthatthenaturalgasindustryisseekingtoexertinfluenceonourstategovernmentas decisionsabouthydrofrackinginNewYorkStatemoveforward.AstheNewYorkTimesnotedina recentarticle,thelobbyingpushinNewYorkcomesaspartofabroaderindustryefforttoinfluence publicopiniononnaturalgasdrillingandtopersuadelawmakersingasrichstatestolookmore favorablytowardallowingit,creatingacottageindustryforpaidlobbyists. 3 InpreviousreportsbyCommonCause/NYentitled"DeepDrilling,DeepPockets:Expendituresofthe NaturalGasIndustryinNewYorktoInfluencePublicPolicy,"weprovidedadetailedanalysisofthe naturalgasindustry'slobbyingexpendituresinNewYorkState.WeshowedthatasNewYorkState determineswhethertopermitnaturalgasexploitationusingthecontroversialhydraulicfracturing technique,industryhaspouredmillionsofdollarsintolobbyingtheGovernorandtheNewYorkState Legislature.Theinfluenceofprivateinterestmoneyonthepartofthenaturalgascompaniesstandsto undulytipthebalance. Overthepastyear,CommonCause/NYhascalledonGovernorCuomoandtheNewYorkState DepartmentofEnvironmentalConservationtoextendthepubliccommentperiodbeyondthemodestly extendeddeadlineofJanuary11th.Reasonstosupportanextensionincludethedesireofconstituents tohaveadequatetimeforreviewofthedocument,lingeringdoubtsabouttheabilityoftheDECto 1

properlyregulatethenaturalgasindustrygivenbudgetconstraints,andgeneralapprehensionover hydrofrackinginNewYorkbecauseofthelargeamountsofmoneyindustryhasinjectedintothis debatetoinfluenceelectedofficials.CommonCause/NYbelievesalongerextensionwillhelptoensure thattheprocessbywhichregulatoryoversightwillbeconductedisproperlyvettedandthattheprocess includesadequateopportunitiesforpublicparticipation. ItisclearthatNewYorkhastheopportunitytobeanationalmodelinthewayinwhichitapproaches regulationofnaturalgasextractionthroughhydrofracking,ifitisabletoresisttheconcertedeffortto swayorhastentheprocess.Becausetheconsequencesofinadequateregulationmayhaveirreversible consequencesforthestateswaterandenvironment,citizensconcernsthattheregulatorydecisions maynotbemadewithappropriatedeliberationandbasedonfactsandscienceareheightenedby recentevents. The$223,000studyoftheimpactsofhydrofrackingonNewYorkStatewasconductedby EcologyandEnvironmentInc.,aglobalenvironmentalandconsultingfirmthatcountsoiland gascompaniesamongitsclientsandthatcouldpotentiallygainbusinessfromincreaseddrilling inthestate,asfirstreportedbytheNewYorkTimes.TheStateisspendingalmost$1,000apage tohaveanoutsideconsultantstudytheimpactsofhydrofracking.Themereperceptionofa conflictofinterestonthepartofthecompanythatiswritingthisreportbecauseofthe opportunityforselfgainduetoanexpeditedpermittingprocessforfrackingbegsforamore thoroughvettingofthereportbycommunitygroups,advocatesandconstituents. Inastateaslargeasours,NewYorkersdeservetohavetheDEChostmorethanjustfourpublic hearings.InNewYorkCitywithapopulationofroughlyeightmillionpeople,thestatehosted onlyonemeetingandinWesternNewYorkovereighthundredpeoplelineduptospeakatone ofthepublichearings.Inaddition,partsofCentralNewYorkandotherareaswheredrillingwill haveadirectimpactonqualityoflifeandcommunitieshavebeencompletelyleftoutofthe hearingprocess. InordertobesurethatthedocumentthatwillregulatehowfrackingisconductedinNewYorkStateis seenaslegitimateandcontainstheproperregulatoryoversightmechanismsandprocedures,itis imperativethattheprocessbeastransparentaspossibleandengageasmanystakeholdersaspossible. Intheprocessofdeterminingourstate'spoliciestowardstheuseofhydrofrackingtoextractnatural gasfromshaleformations,NewYork'selectedrepresentativesandappointedofficialsmuststrikethe rightbalance,weighingpotentialeconomicbenefitsagainstpotentialenvironmentalcatastrophe.This meanstakingasmuchtimeaspossibletoensureregulatoryoversightandmechanismsareinplaceand thatasmuchpublicandexpertinputaspossibleisgarnered,aswellastakingcarethatindustryefforts toswaytheprocessarefullydisclosedandapparenttothepublic. 2

Methodology:
Topreparethisreport,CommonCause/NYidentifiedcampaigncontributionsgivenbynaturalgas interestsfromJanuary2007toOctober2011asreportedtotheBoardofElections. Forthepurposesofthisreport,wedefinednaturalgasinterestsashavingasignificantfinancialstake intheexpansionofhydraulicfracturingintheMarcellusShale.Thisdefinitionincludesthecorporations directlyinvolvedinthedrillingaswellasthoseinvolvedinthedistributionandtransmissionofMarcellus gasandtheenergyitwillproduce. OurpreviousanalysisoflobbyingrecordsforgroupshavinglobbiedontwomoratoriumbillsintheState Legislaturein2010helpedsetafoundationforourdataset.Weincludednamesofanycompanywith pendingleasesbeforetheDepartmentofEnvironmentalConservation,aswellascrossreferenced namesofcompanieswithlistsofcompanynamesprovidedtousbygrassrootsadvocacygroupsand environmentalgroups.Wealsousedsuchwebsitesaswikimarcellus.comandindustrypublicationslike thePipelineandGasJournaltofurtherpopulateourlistofnaturalgasentities.Wethenranthenames ofentitieswehadidentifiedthroughthecampaigncontributiondatabasewhichCommonCause/NYhas builtfrominformationobtainedfromthestateBoardofElections. Thelistofnaturalgasentitiesidentifiedinthisreportisadmittedlyincomplete.Theidentifyingof naturalgasentitiesisanongoingprocess.Ifyoubelievetherearecompaniesorfirmsthatarenotlisted inthisreportthatshouldbeincluded,pleasecontactResearchCoordinatorBrianPaulat bpaul@commoncause.orgorat2126916421.

SUMMARY
FromJanuary2007toOctober2011,theNaturalGasindustrymade2,349campaigncontributionsto stateandlocallevelNewYorkpoliticiansandparties.Thesecontributionsrepresentover$1.34million inindustryspending$1,340,246.58.Whatimpactdoesoveramillionindustrydollarsdistributedto candidatesandcommitteesaroundthestatehaveontheofficialssettingpublicpolicy?Thatsthe questionwhichNewYorkersshouldbeaskingtheirelectedrepresentativesandappointedofficialsas NewYorkStatedetermineswhethertopermit,andhowtoregulate,naturalgasexploitationusingthe controversialhydraulicfracturingtechnique. Thisreportanalyzesthemoniesspentbyindustrytoinfluencedecisionmakingatalllevelsof governmentsothatthepubliccanmorefullyunderstandthepolicymakingprocessandholdtheir representativesaccountabletoensurethatitisfairandobjective. 3

HeavyHitters:TheGasIndustrysDirtyDozen

Thefollowingtoptwelvecompaniesandgasassociationscontributed$1,215,257.2toelectedofficials andcampaigncommitteesacrossthestate,representingover90%ofthetotalamountofcampaign contributionsacrossthenaturalgasindustry.

InNewYorkState,whereonly7%ofcampaigncontributionscomefromsmalldonors significant. contributing$250orless 4 ,theamountscontributedbytheDirtyDozenaresignificant. NationalGridPubliclytradedutility(NGG:$35billionmarketcap)operatingregulatedelectricityand

naturalgasinfrastructureintheUnitedKingdomandUnitedStates.Withoverthreemillioncustomers, NationalGridisthelargestdistributerofnaturalgasintheNortheastUS 5 .InNewYork,NationalGrid provideselectricityandnaturalgasdistributionforLongIslandandmuchofupstate.WhileNationalGrid engagesonabroadarrayofenergyissues,thecompanyhasasignificantstakeintheexpansionof frackingintheMarcellusShaleduetoitsinvestmentsingastransmissioninfrastructure.NationalGrid hasalargeownershipstakeintheMillenniumPipeline, 6 alargenaturalgaspipelinerunningfromthe SouthernTierMarcellusregionstoRocklandCounty. InanarticleinthePipelineandGasJournal,aNationalGridexecutiveexplainedhiscompanyssupport forfrackingintheMarcellus:

Fundamentally,Marcellusisaboutenhancedreliabilityforus;adiversityofsupplyoptions, newpathsandgreaterflexibilitytodealwithmattersonanhourlyanddailybasis.Marcellus representsaclean,localandpotentiallyendlesssupplyofNaturalGas,thisisgoingtobegreat forourcustomers.Inourminds,alargesupplysourcepotentiallyhastheabilitytoreduce volatilityandreducepriceslongtermthe[Millennium]pipelineisanassetthatissittingrightin themiddleoftheMarcellusshalegasplay;itrepresentsanotherviablepathastimegoeson. ThepipelineisnicelypositionedandwillbecomeagreatpieceinbringinggastotheNYC metropolitanarea. 7

ConEdisonPubliclytradedutility(ED:$17billionmarketcap)operatingregulatedelectricityand
naturalgasinfrastructureintheNewYorkCitymetropolitanarea.Deliversnaturalgastoroughly1.1 millioncustomersinNewYorkCityandWestchesterCounty.WhileConEdengagesonawidearrayof energyissues,thecompany,likeNationalGrid,hasasignificantstakeintheexpansionoffrackinginthe MarcellusShaleduetoitsinvestmentsingastransmissioninfrastructure.ConEdisinpartnershipwith SpectraEnergyCorp,StatoilNaturalGas,andChesapeakeAppalachiaontheexpansionoftheTexas EasternandAlgonquinGaspipelinesystemstodeliverMarcellusgasdirectlytoConEdsdistribution systeminNewYorkCity. 8 Upontheannouncementofthispartnership,ChesapeakeCEOAubrey McClendonstatedChesapeake'sindustryleadingpositionintheMarcellusShaleprovidestheperfect supplysourcetohelpenergyconsumersintheNewYorkCityareareducetheirdependenceon expensiveimportedoilandcarbonheavycoal.ConEdsreasonsforsupportingfrackingarelikely similartothoseexpressedbyNationalGrid;Marcellusrepresentsalargelocalsupplysourcethatcan helpreducevolatilityandstabilizeprices.

NationalFuelWithalmosthalfofitsincomecomingfromitspipelineandstoragesegment,which
providesinterstatenaturalgastransportationandstorageservices,aswellasanactiveexploration business,NationalFuelhasakeeninterestinsupportingfrackinginNewYorkState.NationalFuel, accordingtoitswebsite,isanintegratedenergycompanywith$4billioninassetsspreadacrossfive principalsegments.Thelargestofthosesegmentsare:ExplorationandProduction(SenecaResources Corporation),PipelineandStorage(NationalFuelGasSupplyCorporationandEmpireStatePipeline)and Utility(NationalFuelGasDistributionCorporation).SenecaResourcesCorphasitsheadquartersin Houston,Texas.SenencaisalargenaturalgasandoilcompanywithinterestsintheAppalachianRegion includingtheMarcellusShaleandisoneofthelargestnaturalgascompaniesinPennsylvania. FormoreinformationonNationalFuelseeCommonCause/NYsreportCONNECTTHEDOTS:National Fuel:PowerPlayerinNewYorkState,atwww.commoncause.org/ny/nationalfuel

TheIndependentPowerProducersofNewYork,Inc.(IPPNY)isatradeassociationrepresenting
companiesinvolvedinthedevelopmentofelectricgeneratingfacilities,thegeneration,sale,and marketingofelectricpower,andthedevelopmentofnaturalgasfacilitiesintheStateofNewYork. IPPNYNYdefinesitself,forexample,asatradeassociationrepresentingmorethan100companies involvedinthedevelopmentofgeneration,marketingandsaleofelectricpowerandnaturalgasinNew YorkState,andnotonlyisalargecontributorofcampaigncontributionstovariouscandidates,butalso 6

isarecipientoffundsfromothernaturalgascompanies.IPPNYrepresentsalmost75percentofthe electricgeneratingcapacityinNewYork.IPPNYhasbeenastrongsupporterofdrillinginNYandhas opposedbillsattemptingtoplaceamoratoriumondrillingintheMarcellusShale. 9

CompetitivePowerVentures(CPV)Backedbymorethan$300millionindevelopmentfunding
fromWarburgPincus 10 ,CPVhasembarkedonanaggressivedevelopmentprogramfornaturalgas powergenerationfacilities;bothcombinedcycleandpeakingunits.TheCompanyhasdirectedits developmenteffortatregionsintheU.S.andCanadawhereoldercoalfiredpowerplantsareinlinefor replacement.

NYSEG/RG&E/IberdrolaNYSEG(NewYorkStateElectricandGas)andRG&E(RochesterGasand
Electric)aresubsidiariesofIberdrolaUSA.Together,thetwocompaniesserveover500,000naturalgas customers,mostlyinWesternNewYorkandtheSouthernTier. 11 Iberdrolaisaglobalenergy conglomeratebasedinSpainwithamarketcapofover30billioneuros.NYSEG,RG&E,andIberdrola supporttheexpansionofthenaturalgasindustryanditsdomesticproductionintheUS.

ConstellationEnergyPubliclytradedenergycompany(CEG:$7.7billionmarketcap),Constellationis
thenation'slargestcompetitivesupplierofelectricitytolargecommercialandindustrialcustomersand thenation'slargestwholesalepowerseller.41%ofConstellationsenergysuppliescomefromNatural Gas 12 .In2011,ConstellationwasboughtbyExelonCorp,forminganewcombinedcompanythatisone ofthelargestenergyprovidersinthecounty.Thecompanyisshiftingitsfocusfromdevelopmentofnew nuclearpowerplantstonaturalgas.ExelonCEOJohnRowerecentlystatedhissupportforfrackingin theMarcellusatanenergyconferenceinPhiladelphia:WhatwehavetodayinPennsylvania,inthe wholeNortheast,isthegreatdomesticblessingofcheapnaturalgasIcanbuildgasfiredcapacityin waysthatallowPennsylvaniatocompetewithChinafearsabouthydraulicfracturingwillmostlyprove untrue. 13

CentralHudsonGas&ElectricisasubsidiaryofCHEnergyGroupandisapubliclytradedelectricity
andnaturalgasutility(CHG:$865millionmarketcap)operatinginthecentralHudsonValley.The companyisastrongproponentoffrackingintheMarcellus.CEOStevenLantrecentlystatedthat frackingisaneconomicopportunitytoogoodtopassupandbelievesthatitwillleveltheplaying fieldwhenitcomestotheNortheastsenergymarketaswellashelpcurbtheexodusofjobsand populationthatNewYorkStatehasbeenexperiencing. 14

DominionResourcesakaDominionTransmissionInc.(NEWYORKSTATEE:D,$30billionmarketcap)is
aRichmond,Virginiabasedpublicutilitythatoperatesoneofthelargestnaturalgasdistributionand storagenetworksintheUnitedStates.Dominionisalsoaproducerthecompanyownsdrillingrightsin 600,000to800,000acresoftheMarcellusShaleandisactivelyengagedinleasingtheserightstodrillers suchasAnteroResources. 15

IOGAIndependentOilandGasAssociationistheprimarytradeorganizationforcompaniesand
professionalsinthefossilfuelproductionindustryinNewYork.IOGAanditsExecutiveDirectorBradGill 7

havebeenvocalsupportersofopeningNewYorksMarcellusforfracking.Regardingthe2010 moratoriumbill,BradGillstatedItwouldbeirresponsibletoseelawmakerscavetothescaretacticsof radicalopponents,anditwouldbeaslapinthefacetolandowners,NewYorktaxpayers,allthepeople oftheSouthernTier,aswellastheDEC,toallowamoratoriumbilltopassintheLegislature. 16 IOGA maintainstheMarcellusFacts.comwebsite,whichispresentedasanobjectivesourceofpublic informationontheMarcellusShalefrackingissue.

ChesapeakeAppalachiaanditspubliclyparentcompanyChesapeakeEnergyCorporation(CHK:$15
billionmarketcap)isthesecondlargestproducerofnaturalgasintheUnitedStatesandthemostactive drillerofnewwellsinthenation.InNewYork,Chesapeakehasbeenoneoftheindustrysmost aggressivepromoters,spendingalmost$1.7milliononlobbyingsince2007,includingamilliondollar grassrootsadvertisingcampaignin2010.FormoreinformationonChesapeakeslobbyingactivitiesand thelobbyingactivitiesofothernaturalgasentitiesinNewYork,seeCommonCause/NYsreportDeep Drilling,DeepPockets,PartIILobbyingExpenditures

NRGEnergyisapubliclytradedenergycorporation(NRG:$4.13billionmarketcap)thatowns
numerousnaturalgaspowerplantsinNewYorkandplanstobuildabrandnewplantinConEdsAstoria complexthisyear. 17 NRGalsoownsEnergyPlusCompany,arapidlygrowingdistributerofnaturalgasin NewYork.NRGBoardMemberKathleenMcGintywasnamedasoneofsevenmembersofPresidents Obamashydraulicfracturingstudypanel. 18 Thisreportsnaturalgasindustrydatasetalsoincludes26othercompanies/organizationswhichmade campaigncontributionstoNewYorkStatepoliticians/partiesbutdidnotexceed$20,000intotal donations. 19 Foradetailedspreadsheetofeverytransaction,pleasecontactBrianPaulat bpaul@commoncause.org

TheBusinessCouncilofNewYorkStateandUnshackleUpstate

NewYorksmostinfluentialstatewidebusinesslobby,TheBusinessCouncilofNEWYORKSTATE,hasbeenastrong supporterofopeningtheMarcellusShaleforfracking.FormerPresidentandCEOKennethAdams,appointedtolead theEmpireStateDevelopmentCorporationbyGovernorCuomo,isamajorcheerleaderfortheindustryandvocally opposedthe2010moratoriumbill*.TheBusinessCouncilspromotionoftheeconomicbenefitsoffrackingcontinues underactingpresidentHeatherBriccettiandisoneoftheorganizationstoplegislativepriorities**. FromJanuary2007toOctober2011,thenaturalgasindustryentitiesidentifiedinthisreportcontributed$19,300to theBusinessCouncilPAC.TheBusinessCouncilPACcontributedover$280,000toNewYorkStatepoliticiansand partiesduringthisperiod,anamountthatincluded$83,750toSenateRepublicansoftmoney,$26,900toAssembly Democraticsoftmoney,and$9,000toCuomoDuffy2010.TheBusinessCouncilisalsooneofNewYorkstop lobbyists,spendingover$3.2millionduringthisperiodtobuildinfluenceinAlbany. AnothermajorbusinessorganizationsupportingfrackingistheUnshackleUpstatecampaign***,backedbyupstate businessinterestsincludingtheRochesterBusinessAllianceandBuffaloNiagaraPartnership.ExecutiveDirectorBrian Sampsonisoftenquotedinfavoroffrackinginthepress.UnshackleUpstatespent$841,783onlobbyingfrom2007 toOctober2011onacombinationofdirectlobbyingandgrassrootsstrategiesaddressingamyriadofissues.

*http://www.bcNewYorkState.org/inside/energy/2009/110909DECMarcellusTestimony.htm **http://www.bcNewYorkState.org/inside/actionagenda.htm ***http://www.unshackleupstate.com/legislativeactivity/legislativememos/energyandenvironment/hydromoratorium

SpreadingGasMoneyAround
Lookingatthedetailedbreakdownofthe$1.34millioninnaturalgasindustrycampaigncontributions fromJanuary2007toOctober2011,almost75%ofthemoneywenttotheStateLegislature(State Senatecandidates,statepartysoftmoney,andStateAssemblycandidates). WhilecandidatesfortheStateSenatereceivedthelargestshare,over$300,000wenttotheSenateand Assemblysoftmoneyaccountsthatarefreefromlimitations.Donatingtothelegislaturessoftmoney accountsisanimportantwaytobuildinfluencewiththeSenateandAssemblyleaders. Over$200,000wenttofundgubernatorialcampaigns,andalmost$100,000wenttovariouslocal candidatesaroundthestate(includingcountyexecutives,countylegislators,citycouncilmembers,town supervisors,andmayors)andalmost$30,000wenttocountyandtownlevellocalpartycommittees.

Lookingatthebreakdownofthestatelegislativedonationsbyparty,naturalgasinterestsfavored RepublicancandidatesandsoftmoneyaccountsintheSenatebymorethan2to1. IntheAssembly,naturalgasinterestsdonatedmoretoDemocraticcandidatesthanRepublican candidates,butgavemoretoRepublicanAssemblysoftmoney.

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 TheCuomoDuffy2010campaignwasbyfarthelargestgubernatorialrecipientofnaturalgasindustry money,receivingatotalof$153,816.06fromJanuary2007toOctober2011. Duringhiscampaign,Cuomoreleasedanenergypolicypositionpaperstatingthattheeconomic potentialfromtheMarcellusshalecouldprovideabadlyneededboosttotheeconomyoftheSouthern Tier,buttemperedthissupportbynotingthatitmustnotcomeattheexpenseofhumanhealthor adverseenvironmentalimpacts 20 . Shortlyafterhereleasedthispositionpaper,CityLimitsrananarticlenotingthatPowercompanies withastakeinnaturalgasareamongCuomo'slargestcampaigncontributors. 21 11

Top10StateLegislativeRecipientsofNaturalGasMoney
TheTop10StateLegislativerecipientsofnaturalgasindustrycontributionscollected$231,557.00 fromJanuary2007toOctober2011.

InadditiontothefocusontheRepublicanmembersoftheStateSenatemajority,thenaturalgas industryhastargetedleadersandmembersoftheEnergyCommitteesinboththeSenateand AssemblyaswellasSenatorsrepresentingtheSouthernTierandFingerLakesareasofthestatethat willbeattheepicenterofdrillingactivityiffrackingisapproved.

GeorgeMaziarz(R)62ndSDSenateVicePresidentProTempore.HoldingakeypositionasChairof
theSenateEnergyCommittee,GeorgeMaziarzistheSenatesmostenthusiasticandoutspoken supporterofthenaturalgasindustryandhydrofracking.Maziarzvotedagainstthe2010moratorium billandhasreleasednumerouspressbulletins 22 insupportoffracking.SenatorMaziarzrecently attendedanIOGAgasindustryconferencewherehestatedItsbeenproventhatit[fracking]canbe doneinasafeway,andsuggestedthathishomeregionofNiagaraFallscouldseeaneconomicboom frompurifyingtoxicfrackingfluids. 23 Withalmost$40,000inindustrycontributionssince2007,theres noquestionthatMaziarzcampaignfundshavealreadyseenaneconomicboomfromfracking. 12

MichaelNozzolio(R)54thSDRepresentstheFingerLakesregionofWesternNewYork,including
areaswherehydrofrackingispredictedtotakeplace.IncontrasttoSenatorMaziarzsenthusiastic promotionoftheindustry,SenatorNozzoliohasbeenmorecautiousaboutembracingfracking.He votedinfavorofthe2010moratoriumandhascalledforadditionalprotectionsforallFingerLakes watersheds. 24 AsamemberoftheSenatemajorityrepresentingadistrictwherefrackingwilllikelytake place,Nozzoliosreluctancetoembracefrackingissignificantandthenaturalgasindustryhasan importantstakeinseekingtoinfluencetheSenatorsstance.

KevinCahill(D)101stADHoldsakeypositiontothenaturalgasindustryasChairoftheAssembly
EnergyCommittee.Inhispublicstatements,AssemblyMemberCahillspositiononfrackingissimilarto thatofGovernorCuomotemperedsupportforsaferegulateddrilling. 25

DeanSkelos(R)9thSDAstheSenateMajorityLeadersincetheRepublicansretookthechamberin
2011,SkelospossessespowerfulinfluenceovertherestoftheRepublicanSenatemembers.Publicly, SenatorSkeloshasexpressedsupportforfrackingbutisoftencarefultoemphasizetheneedforsound regulationoftheindustry:Weneedtolettheexpertsdeterminetheenvironmentalimpactofhydraulic fracturingaswealsoconsiderthepotentiallysubstantialeconomicboostforareasofthestatethatare indireneedofjobs. 26

KevinParker(D)21stSDSenatorParkerwasChairofSenateEnergyduringthebriefDemocratic
majorityof20092010.Morethan75%ofhisnaturalgasindustrydonationscameduringthisperiod. ButSenatorParkerhasnotbeentheindustrysclosestfriend,asheplayedanimportantroleinthe successfulefforttoimpostaoneyearmoratoriumonfrackingin2010.

ThomasLibous(R)52ndSDTheDeputySenateMajorityLeader,Libousrepresentstheeastern
portionoftheSouthernTierwithadistrictcenteredinBroomeCountyandtheCityofBinghamton groundzerofortheMarcellusShale.SenatorLibousisanenthusiasticandvocalboosterofthenatural gasindustryandfrackingandisoneoftheeightSenatorswhovotedagainstthe2010moratoriumbill. LiboushaspubliclycriticizedotherSenatorsfortheiroppositiontofracking 27 andhasalsocomplainedof mediabiasagainstthegasindustryTheresalotofpeopleoutthere,youknow80percentofthe mediasagainstit,andtheykeepbeatingthedrumTheyoutnumberus,therearenttoomanypeople likemyselfwhoarewillingtostandupandfightforthis. 28

MichaelRanzenhofer(R)61stSDAmemberoftheSenateEnergyCommitteerepresentingpartsof
ErieandGeneseeCounties,SenatorRanzenhoferreceivedmostofhisnaturalgasindustrydonations fromtheBuffalobasedNationalFuelCorp.Publicly,Ranzenhoferhasnotbeenoutspokenaboutthe frackingissueandhevotedinfavorofthemoratoriumbillin2010.

JeffKlein(D)34thSDSenatorKleinleadstheIndependentDemocraticConferencesince2010and wastheDeputyMajorityLeaderduringtheDemocraticSenateMajorityfrom20092010.

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MartyGolden(R)22ndSDSenatorGolden,theAssistantSenateMajorityWhipandamemberofthe
powerfulSenateFinanceCommittee,isastrongsupporteroffrackingandhasfoundhimselfthetarget ofnumerousantifrackingprotestsinrecentmonths. 29 Goldendidnotcastavote(hewasexcused)on the2010moratoriumbill.

ThomasOMara(R)53rdSDIn2010,SenatorOMarareplacedGeorgeWinner(R)inrepresenting
the53rdDistrictthatcoversthecentralSouthernTierepicenteroftheMarcellusShale.GeorgeWinner steppeddownin2010underintensescrutinyafterithadbeenreportedintheNYTimesandtheDaily Newsthathislawfirmlistsmanynaturalgascompaniesastheirclients. 30 Beforesteppingdown,Winner received$11,425incontributionsfromthegasindustry.BeforehebecameSenator,ThomasOMara servedasaStateAssemblymaninthesameareaandhasalsobeenaccusedoftiestotheindustry. OMarawascounselfortheChemungCountyIDAduringthetimeamajorcountytaxbreakwasgivento NationalGridsMillenniumPipeline. 31 SenatorOMaraisavocalsupporterofopeningtheMarcellusto hydrofracking 32 ,aswasSenatorWinnerbeforehim.

CountyLevel:BattlegroundoverFracking?
AroundthesametimeastheGovernorwasissuinghisdirectiveliftingthestatewidemoratoriumon hydrofracking,theAssemblywasbusypassingitsownslewofbillsaimedatbestmanagingnaturalgas extractionpractices.OnerathercontroversialbillA3245,sponsoredbyAssemblyMemberLipton passedintheAssemblybutfailedtoleavetheRulesCommitteeintheStateSenate.A3245soughtto clarifywhetherornothomerulelawspassedaslocalordinancesgoverningzoningcouldbeusedto regulatethelocationofoilandgasdrillingoperations,evenwitharegulatoryprogramatthestatelevel. Thebillsupportedtheauthorityofmunicipalitiestousezoninglawstodictatewhereoilandgaswasa permissibleuse.TheNewYorkStateCourtofAppealscaselawhadpreviouslyinterpretedthelawas prohibitinghomeruletobeusedtogoverntheplacementofgasandoilwellswithinamunicipality, statingthatzoningrulesandordinancescouldonlytoregulatethelocation,constructionanduseof buildingsandlandwithinthetown,asdelegatedtolocalgovernmentbyArticleIXoftheState Constitution.Thelegislationsetoffaflurryofdebatesbetweenlocalresidents,electedofficials,and thenaturalgasindustryoverwhethergasdrillingshouldbeultimatelyregulatedbytheStateorifcities, towns,andcountiesshouldbeabletobandrillingatthelocallevel. InNewYorkState,thetensionbetweenthestatesauthoritytograntdrillingpermitsforhighvolume hydrofrackingwithoutnotifyingaffectedcommunitiesandthecommunitiesrighttobanunwanted industrialactivityisshapingupasakeylegalbattle.InFebruary,BuffalobecamethefirstcityinNew YorkStatetopassafrackingban.AnumberofsimilareffortshavetakenplaceacrosstheStateintowns andcounties.Therehavebeenelevenothersuccessfuleffortsonthecity/townlevel:theCityof Oneonta;theTownofCamillus,OnondagaCounty;theTownofOtsego,OtsegoCounty;theTownof Springfield,OtsegoCounty;theTownofMiddlefield,OtsegoCounty;theTownofCherryValley,Otsego County;theTownofIthaca,TompkinsCounty;theTownofWales,ErieCounty;theTownofBarrington, YatesCounty;theTownofMilo,YatesCounty;andtheTownofJerusalem,YatesCounty.Inaddition, 14

sevencountieshavebannedfrackingoncountylands:Ontario,Sullivan,Onondaga,Ulster,Dutchess, Tompkins,andBroome.Proposedbansareunderofficialconsiderationinsixtowns:theTownofDanby, TompkinsCounty;theTownofUlysses,TompkinsCounty;theTownofPlainfield,OstegoCounty;the townofDryden,TompkinsCounty;theTownofOneonta,OstegoCounty;andtheTownofSkaneateles, OnondagaCounty. InaccordancewithcurrentNewYorkStateenvironmentalconservationlaw,locallawsrelatingtothe regulationoftheoil,gas,orminingindustriesaresupersededbystatelaw;however,statelawcannot supersedelocaljurisdictionoverlocalroadsortherightsoflocalgovernmentsundertherealproperty taxlaw.Abilltoamendthecurrentlaw(A3245)waspassedbytheStateAssemblyandiscurrently sittingintheStateSenate(S3247);thebillwouldamendtheaforementionedlawwiththefollowing language:Nothinginthistitleshallbeconstruedtopreventanylocalgovernmentfrom(A)Enactingor enforcinglocallawsorordinancesofgeneralapplicabilityexceptthatsuchlocallawsshallnotexpressly regulatetheoil,gasandsolutionminingindustriesregulatedbystatestatute,regulation,orpermit;or (B)enactingorenforcinglocalzoningordinancesorlawswhichdeterminepermissibleusesinzoning districts.Thesupportthatthisbillwouldgivetolocalgovernmentsseekingtoasserthomerulehas worriedmanyindustryandprodrillingadvocates.Keytothisamendmentisitsuseoftheword expresslytomodifytheactofregulation.WithregardtotheMiningStatute,theNewYorkCourtof Appealshasheldthatregulatinganindustrymeansregulatingitsoperationandprocesses,notlocal zoningaimedatlimitingtheexternalitiesoflanduse.Localeffortsathomerulehavefocusedon languageonhighimpactindustryinzoninglaws.

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Whatevertheultimateoutcomeofthehomeruleissue,thebattleoverwhethertopermithydro frackingisbeingplayedoutatthelocallevelacrossNewYorkState.Asindustrylookstobegindrillingin variouslocalities,pressureswillbegintobeplacedonlocalexecutivesandlegislatorstoworkwithstate regulatorstoensurethatrulesandregulationsarefollowed.

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RECOMMENDATIONS
AssurethePublicAMeaningfulOpportunitytoParticipate
CommonCause/NYremainsconcernedthatthecommentperiodforthehighlytechnicaldraftSGEISwas insufficientandthatasignificantnumberofindividualswhowantedtotestifyatthelimitednumberof hearingswereunabletodoso.Whateverultimatedecisionismaderegardingnaturalgasextraction andhydrofrackinginourstate,itsobjectivitywillbecloudedbytheperceptionrightlyorwronglythat thepublicdidnothaveanadequateopportunitytostudythesGEISandtocommentonregulationsin lightofthefindingsofthesGEIS.

ImproveDisclosureLaws
Theprocessofidentifyingcorporationsinthenaturalgasindustryisalaboriousanddifficultprocess becauseNewYorkStatedoesnotrequirecorporatedonorstoidentifytheirindustrysectororparent companies.NewYorkalsofailstorequireindividualcontributorstoidentifytheiroccupation,employer andplaceofbusiness,makingitextremelydifficulttoconnecttopcorporateexecutivesandboard memberswiththeintereststheyrepresent.CommonCause/NYhas,inthepast,supportedbillsthat wouldrequirethesedisclosures.Thelackofthisinformationonourstatesexistingcampaign contributiondisclosuresmakesitextremelydifficulttoanalyzetheimpactwhichspecialinterest campaigndollarsmaybehavingonpublicpolicy,amatterofsubstantialinteresttoallresidentsnotonly voters.CommonCause/NYhasspentcountlesshoursresearchingthisinformation,whichiseasily obtainedaboutcontributorstoFederalandCityelections.Thissimplefixislongoverdue. Inaddition,thelackofuniformityinhowcompaniesidentifythemselvesmakesitadifficultand laboriousprocesstoidentifyeachcompany.CompaniessuchasCompetitivePowerVenturesmaybe listedbytheirfullnameoranacronymsuchasCPVmakingitmoredifficulttoreadilyidentifythe company.OfcoursemanyPoliticalActionCommitteesalsopurposefullyhidethetrueintentionoftheir PACbyusingmisleadingnames. Thepublicshouldnothavetorelyprimarilyonanalysisofpoliticalspendingbyadvocacygroupsandthe presstobeabletoholdtheirelectedofficialsaccountable.Theofficiallycompileddatashouldbemore detailedandallowtheaveragecitizentheopportunitytoreadilygetacompletepictureoftheinterests tryingtoinfluencepolicymakers.Theverybasicimprovementofrequiringcontributorstoidentifytheir employerandbusinesswouldfacilitatethis.

CampaignFinanceReform,includingPublicFundingofElections
AdoptionofapublicfundingofelectionsprogramforNewYorkStateelectionswouldhelpincreasethe numberofsmallercampaigncontributionsandshiftourcampaignfinancesystemawayfroma dependenceonlargecontributionsfromspecialinterests.NewYorkersdeserveastategovernmentthat isfullyobjectiveandengagedinprotectingthepublicinterest. 17

CONCLUSION
NewYorkhastheopportunitytobeanationalmodelinthewayinwhichitapproachesregulationof naturalgasextractionthroughhydrofracking.Moremustbedonebyourelectedofficialsandpolicy makerstoinsurethattheultimatepolicyadoptedbyourstateisbasedonfactsandscienceandto dispelconcernsthatitisbasedonspecialinterestinfluence.

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ENDNOTES

NYSDEC.DECCommissionerAppointMemberstoHydraulicFracturingAdvisoryPanel.July1,2011. http://www.dec.ny.gov/press/75416.html. NYSDECS.DECBegins90DayPublicCommentPeriodonDraftHydraulicFracturingStudy.September7,2011. http://www.dec.ny.gov/press/76892.html.

ThomasKaplan.MillionsSpentinAlbanyFighttoDrillforGas.TheNewYorkTimes. http://www.nytimes.com/2011/11/26/nyregion/hydrofrackingdebatespurshugespendingbyindustry.htm

MichaelJ.MalbinandPeterW.Brusoe,.SmallDonors,BigDemocracy,NewYorkCitysMatchingFundsasa ModelfortheNationandStates.CampaignFinanceInstitute,2011. 5 NationalGrid.2010CorporateOverview.http://www.nationalgridus.com/non_html/a2_us_facts.pdf.

6

DerekWeber.FromDraketotheMarcellusShaleGasPlay:DistributionDevelopments.PipelineandGas Journal.April2010.http://www.pipelineandgasjournal.com/drakemarcellusshalegasplaydistribution developments?page=show.

7 8

Weber,id.

SpectraEnergy.SpectraEnergySignsBindingPrecedentAgreementsforMajorPipelineProjecttoDeliverNew NaturalGasSuppliesIntoNewJerseyandNewYorkArea.December28,2009. http://investors.spectraenergy.com/phoenix.zhtml?c=204494&p=irolnewsArticle&ID=1369521&highlight=

SeeIPPNYs2011LegislativeAgendaathttp://www.ippny.org/page/newsandlegislativememos2/news/2011 legislativeagenda21.htmlandstatementsofoppositiontohydraulicfracturingmoratoriumbillsat http://www.ippny.org/page/newsandlegislativememos2/news/memoranduminoppositionofa7400 sweeney104.html.

10 11

CompetitivePowerVentures.InvestmentPartners.2011.http://www.cpv.com/investment_partners.php.

NYSEG.OurCompany:ServiceArea.2011.http://www.NewYorkStateeg.com/OurCompany/servicearea.html ;RG&E.OurCompany:ServiceArea.2011.http://www.rge.com/OurCompany/servicearea.html.

12

ConstellationEnergy.GroupWhoWeAre.2011http://www.constellation.com/about us/whoweare/pages/whoweareoverview.aspx.
13

AndrewMaykuth.ExelonsRoweanUnlikelyBoosterforShaleGas.ThePhiladelphiaInquirer.October30, 2011. http://www.philly.com/philly/business/20111030_Exelon_s_Rowe_and_unlikely_booster_for_shale_gas.html. EmpireStateNews.net.CHEnergyChiefSupportsMarcellusShaleGasExploration.June23,2011. http://www.empirestatenews.net/News/201106237.html. DominionResources.Dominion,AnteroResourcesAmendMarcellusShaleRightsAgreementto114,000 Acres.September24,2008http://dom.mediaroom.com/index.php?s=43&item=197.

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16

IndependentOilandGasAssociationofNewYork(IOGA).PressRelease:ProposedGasdrillingMoratoriumBill UnnecessaryAugust3,2010. http://www.marcellusfacts.com/blog/pressreleaseproposedgasdrillingmoratoriumbillunnecessary

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17

Reuters.UPDATE2N.Y.ApprovesNew$1.4BillionNRGPowerPlantinNYC.January20,2011. http://www.reuters.com/article/2011/01/20/utilitiesnrgastoriaplantidUSN2013483520110120

18

USDepartmentofEnergy.SecretaryChuTasksEnvironmental,IndustryandStateLeaderstoRecommendBest PracticesforSafe,ResponsibleDevelopmentofAmerica'sOnshoreNaturalGasResources,May5,2011. http://energy.gov/articles/secretarychutasksenvironmentalindustryandstateleadersrecommendbest practicessafe

19

Inadditiontothetoptwelveprofiledindetail,thedatasetincludescontributionsfromTheEnergyforNewYork PAC,ExxonMobil,SJBServices,TheWilliamsCompanies,IDTEnergyInc,BuffaloDrilling,BuffaloWellProducts, ConocoPhilips,TennesseeGasPipelineLLC(subsidiaryofSpectraEnergy),InflectionEnergy,AlgonquinGas TransmissionLLC(subsidiaryofSpectraEnergy),AnschutzExploration,CrownEnergyServices,MillenniumPipeline CompanyLLC(partialsubsidiaryofNationalGrid),EnergyAssociationofNEWYORKSTATE,FortunaEnergy,Texas EasternTransmission,SpectraEnergy,ElexcoLandServices,FreyWellDrilling,NornewInc,PSEGEnergyResources, ElPasoEnergyServiceCo.,ChiefEnergy,H&HEnterprises,EnergymarkLLC,andChautauquaEnergy.

20

AndrewCuomo2010.PowerNY:TheNewNYAgenda. http://www.andrewcuomo.com/system/storage/6/89/e/798/andrew_cuomo_power_ny.pdf

21

JakeMooney.CuomoRakesinDonationsFromEnergySector.CityLimits.October27,2010. http://www.citylimits.org/news/articles/4211/cuomorakesindonationsfromenergysector SenatorGeorgeD.Maziarz.SenatorMaziarzSupportsDECPlantoPermitHydrofracking.July1,2011. http://www.NewYorkStateenate.gov/pressrelease/senatormaziarzsupportsdecplanpermithydrofracking

22

23

DanielRobison.Maziarz:Fracking,TreatingWasteFluidCouldLeadtoEconomicBoom.InnovationTrail. March14th,2011.http://innovationtrail.org/post/maziarzfrackingtreatingwastefluidcouldleadeconomic boom

24

Nozzolio:BanFrackinginAllFingerLakesWatersheds.TheAuburnCitizen.August6,2011. http://auburnpub.com/news/local/article_703da5c6c03411e09d41001cc4c002e0.html AssemblymanKevinCahill.AssemblymanKevinCahill,ChairoftheAssemblyEnergyCommittee,Commentson theStateEnergyPlan.September24,2009.http://assembly.state.ny.us/comm/Energy/20090924/

25

26

CelesteKatz.DocumentDrop:DEConNewYorkHydrofracking.DailyNewsDailyPoliticsBlog.June30,2011. http://www.nydailynews.com/blogs/dailypolitics/2011/06/documentdropdeconnewyorkhydrofracking

27

JonCampbell,Liboustellsdownstatetostayoutofhydrofrackingdebate.October14,2011. http://www.theithacajournal.com/article/20111014/NEWS01/110140412/Liboustellsdownstatestayout hydrofrackingdebate

28

NickiReisman,LibousSaysFrackingDebateAHellOfAFight.October31,2011. http://www.capitaltonight.com/2011/10/liboussaysfrackingdebateahellofafight/

29

HaroldEgeln,EcoScorecardPraisesSquadron,SlamsGolden.October14,2011. http://www.brooklyneagle.com/categories/category.php?category_id=27&id=46781

30

NYDailyNewsEditorialBoard.He'saWinner,N.Y.Loses:UpstateSenatorisPosterBoyforAlbanyEthicsMess. NYDailyNews.August7,2010.http://www.nydailynews.com/opinion/awinnernylosesupstatesenatorposter boyalbanyethicsmessarticle1.205437

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31

JosephTrento,UndisclosedConflictsofInterestisKeyIssueinRaceforGeorgeWinnersNewYorkSenate Seat.October27,2010.http://www.dcbureau.org/20101027156/naturalresourcesnewsservice/undisclosed conflictsofinterestiskeyissueinraceforgeorgewinnersnewyorksenateseat.html

32

ABCNewsChannel9Elmira.Senator:DrillingintheMarcellusShaleWouldSaveRegion'sEconomy. September29,2011http://www.9wsyr.com/news/local/story/SenatorDrillingintheMarcellusShale would/oJ7O2r11TUGTHZvlC6cgaw.cspx

21