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Maryland Once Again Considering Marcellus Moratorium

A moratorium on Marcellus Shale permits could be back on the table in Maryland.

State Delegate Heather Mizeur, D-Montgomery, told a legislative committee on Wednesday that the sponsors of House Bill 852 plan to amend to their bill to keep the state from issuing permits until July 2013. The delay is meant to give state agencies time to see the results of various studies into Marcellus Shale development and hydraulic fracturing in particular, including a major study by the U.S. Environmental Protection Agency (EPA).

"We feel that we need that much time to make sure this is done right," Mizeur told members of the Maryland House Environmental Matters Committee. The amendments are expected to be finished by March 1.

In an editorial last December, Mizeur called for a moratorium on Marcellus Shale permitting and drilling in Maryland, but did not include the provision in HB 852, also known as the Marcellus Shale Safe Drilling Act, to keep the state from having to pay $3 million to study the potential impacts of natural gas development.

Mizeur said the amended bill would include a payment mechanism allowing the Maryland Department of the Environment (MDE) and other state agencies to conduct those studies in a "budget neutral" way.

Mizeur said she decided to bring back the moratorium provision after meeting with state agencies.

Acting MDE Secretary Bob Summers told the committee that his department supports the bill and the amendments.

Summers said the MDE and the Maryland Department of Natural Resources (MDNR) want to put together an advisory committee that includes representatives from government, industry and academia to comprehensively study the impacts of development. "There's a long list of issues that we would need to address," Summer said.

Summers said industry would pay for the cost of the study.

The two-year study, Summers said, would give the committee time to get the results from various studies, including the EPA's look at hydraulic fracturing and drinking water supplies, as well as studies in New York State and the Delaware River Basin Commission (see Shale Daily, Feb. 9, Dec. 14, 2010, Dec. 10, 2010). However, Summer added, the committee should be allowed to move ahead on permitting as soon as it feels adequately informed.

As written, the Marcellus Shale Safe Drilling Act would prohibit the MDE from issuing drilling permits into the Marcellus Shale formation unless the applicant can address concerns about water use, wastewater disposal, energy response, heavy truck traffic and bonding. It also requires the state to consult with local jurisdictions.

"If those standards are too high, then they cannot have a permit to drill in Maryland," Mizeur told the committee.

Although most of Maryland sits outside of the Marcellus Shale fairway, rural Garrett and Allegany counties in the western panhandle overlie the formation. Mizeur estimated that drilling companies have already leased more than 90,000 acres in those two counties and that production could start within two months if the MDE issued permits.

Those who testified on HB 852 offered familiar ideas. Those in favor of the bill brought up concerns about Marcellus Shale development, including increased truck traffic, the protection of local water and air and the management of drilling waste. Those opposed called the bill a de facto moratorium, even without the amendments, and said it would stifle local and statewide economic development and would jeopardize existing leases.

Chief Oil and Gas noted that it applied for drilling permits with the MDE more than a year ago, and that meanwhile significant portions of its Maryland lease holdings will soon expire unless production begins.

The Environmental Matters Committee also heard testimony on House Bill 411, an alternative bill sponsored by Delegate Wendell Beitzel, R-Garrett and Allegany, that would create a permitting framework addressing Marcellus Shale drilling and disposal, but doesn't keep the state for issuing permits (see Shale Daily, Feb 15).

Maryland's interest in the Marcellus Shale increased after John Quigley, former secretary of the Pennsylvania Department of Conservation and Natural Resources and now the manager of government relations for PennFuture, told a legislative committee that Maryland needs to take a cautious approach on Marcellus Shale development.

Earlier in the week, the University of Maryland Extension estimated that the natural gas reserves on private land in western Maryland could be worth $5.9 billion to $49.1 billion at current natural gas prices.

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