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Marcellus Moratorium Bill Stalls in Maryland Senate

The Maryland Senate ended its 2011 legislative session without voting on a bill that would have frozen the permitting of Marcellus Shale drilling until 2013 while state agencies reviewed the results of various studies into Marcellus development and hydraulic fracturing (hydrofracking).

The Marcellus Shale Safe Drilling Act (HB 852), which had been approved by the House of Delegates last month (see Shale Daily, March 25), was not passed out of the Senate's Education, Health and Environmental Affairs Committee prior to the end of the legislative session Monday, according to a committee spokesman. Gov. Martin O'Malley had indicated that he supported the proposed moratorium.

Maryland Department of Environment (MDE) Acting Secretary Bob Summers had told lawmakers that his department supported the bill. MDE and the Maryland Department of Natural Resources wanted to put together an advisory committee to comprehensively study the impacts of development, according to Summers, who said industry would pay for the cost of the two-year study. In addition to the Environmental Protection Agency's (EPA) look at hydrofracking and drinking water supplies, the committee would review studies from New York State and the Delaware River Basin Commission (see Shale Daily, Feb. 9; Dec. 14, 2010; Dec. 10, 2010).

Language in the bill would have allowed MDE to begin issuing permits during the study period only if "information becomes available...sufficient to demonstrate that the extraction of natural gas from shale formations in the state can be accomplished without adverse impact to human health, natural resources or the environment." HB 852 would also have required MDE to consult with local governments when evaluating permits for drilling within the Marcellus.

On Tuesday, Summers told a U.S. Senate committee that Maryland needs the federal government "to take a more active role in studying and regulating" hydrofracking, deep drilling, horizontal drilling and waste disposal.

"Having observed events in Pennsylvania during the first few years of Marcellus Shale drilling there, Gov. O'Malley, the Department of the Environment and the Department of Natural Resources are determined to ensure that drilling will not start in Maryland until we know whether, and how, it can be done safely," Summers said in testimony before the Senate Environment and Public Works Committee. "We are proceeding cautiously and deliberately and do not intend to allow drilling and fracking in the Marcellus Shale until the issues are resolved to our satisfaction."

MDE "will consider issuing permits for a small number of exploratory wells to be drilled and fracked in the Marcellus Shale" using "best practices" standards the agency will develop over the next year, Summers said. Data gathered from those exploratory wells will be used "to evaluate the environmental viability of gas production from the Marcellus Shale...[and], if we determine that gas production can be accomplished without unreasonable risk to human health and the environment, the department could then make decisions on applications for production wells."

HB 852 was opposed by Del. Wendell Beitzel, a Republican who represents rural Garrett and Allegany counties. Located in the state's western panhandle, Garrett and Allegany are the only counties in the state overlaying the Marcellus.

Tulsa, OK-based Samson Resources applied in late 2009 to drill three wells in Garrett County and a fourth in neighboring Allegany County. At the time, the company said it would drill dozens of other wells on 70,000 acres in the area if the initial wells were successful. Since then Samson has shelved plans for two of the Garrett County wells and the Allegany well.

Dallas-based Chief Oil & Gas LLC has also applied to MDE to drill in Garrett County. Chief has submitted preliminary plans for four potential sites near Friendsville, MD, a few miles north of Deep Creek Lake, according to the Garrett County government. The private operator holds more than 600,000 gross acres in Pennsylvania, West Virginia and Maryland.

The Samson and Chief applications remain under review at MDE.

The EPA last year said it would study the potential risks of hydrofracking on water quality and public health (see Daily GPI, March 19, 2010). The agency has said it hopes to have initial research results by the end of 2012, and to have an additional report completed in 2014 (see Shale Daily, Feb. 22).

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