Pegula’s riches come from fracking, not allowed in NY

The company — which Pegula formed in 1983 — had been active in upstate New York over the years, particularly in the early years of the 2000s, when it drilled dozens of conventional natural-gas wells in the Trenton Black River formation in Chemung and Steuben counties.

From there, Pegula’s company was an aggressive player in the gas-rich Marcellus Shale region in the mid-to-late part of the last decade, amassing a massive cache of more than 650,000 net acres of oil-and-gas rights in Pennsylvania, West Virginia and New York.

Fracking wealth

Around that time, technological advances allowed companies to use hydrofracking horizontally and at much larger volumes. Fracking involves the use of chemically-laced water mixed with sand and injected deep underground to fracture rock formations and release gas.

In 2008, amid concerns over fracking’s impact on the environment and water quality, then-Gov. David Paterson ordered a lengthy environmental review of the technique, putting large-scale fracking on hold in New York’s portion of the Marcellus Shale in the meantime. Cuomo’s office took control of that review in 2011; it has yet to be finalized.

During that time, Pegula’s company focused its efforts in Pennsylvania and other states where the technique was permitted.

In 2010, East Resources struck a $4.7 billion deal to sell its leases and assets to Royal Dutch Shell, the oil-and-gas giant that had taken an interest in the Marcellus.

Less than a year later, Pegula came to a $189 million deal to purchase the Buffalo Sabres of the National Hockey League from Rochester-area native Thomas Golisano. A few months later, Pegula purchased the Rochester Americans, an American Hockey League team. His wife, Kim, is from Fairport, a Rochester suburb; Pegula, 63, is from near Scranton, Pa.

Since taking ownership of the Sabres, Pegula has become a powerful figure in western New York. He has used his oil-and-gas-derived wealth to develop the area surrounding downtown Buffalo’s First Niagara Center, the arena where the Sabres play their home games. Last year, he broke ground on the HarborCenter, a $172 million ice-rink complex and hotel set to open next year.

Cuomo has pointed to newly launched construction in Buffalo as a sign of the city’s resurgence. Cuomo has pledged $1 billion in state aid to help Buffalo’s growth.

In his statement Tuesday about the Bills purchase, Pegula thanked Cuomo for his “support and desire to keep our Bills in Western New York.”

Cuomo and fracking

Cuomo’s inaction on hydrofracking has angered both supporters of the technique — who say it could inject economic life into the state’s long-struggling Southern Tier — and opponents, who say it could cause irreparable harm to the state’s water, air and human health.

Cuomo’s office declined comment Friday on Pegula’s natural-gas interests. Officials at East Management Services, an affiliate of Pegula’s oil-and-gas business, also declined comment, and the Pegula family has said it would have no further comment on the Bills sale until its finalized.

On Tuesday, Cuomo reiterated his long-held public position on fracking, telling reporters a final decision in New York won’t be made “emotionally.”

“Go through the myths or problems, depending on your point of view, and then make a decision based on the science, not on how many protestors show up on one side of the street or the other side of the street,” Cuomo said.

As the debate over hydrofracking has grown into one of the most contentious issues across the state, Pegula has largely stayed on the sidelines — with at least one notable exception.

In 2011, nine months after purchasing the Sabres, Pegula gathered the Buffalo-area of the state Legislature in First Niagara Center, where his team delivered a presentation on the benefits of hydrofracking and the science behind it, Gannett’s Albany Bureau reported in 2012.

The state Assembly has repeatedly passed a fracking moratorium, but the legislation has stalled while the Senate has been under Republicans’ control. All 213 legislative seats are up for election in November.

Unlike his time in Pennsylvania, Pegula and his wife have rarely delved into New York electoral politics. Since purchasing the Sabres, the pair has made just two political contributions to in-state politicians: $12,000 to Buffalo Mayor Byron Brown and $250 to Sen. Tim Kennedy, D-Buffalo, according to state Board of Elections records.

He and his wife donated more than $400,000 to Pennsylvania candidates for office from 2006 to 2011, including at least $230,000 to now-Gov. Tom Corbett, a supporter of fracking.

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