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Pennsylvania Official: Drilling on Public Lands Will Raise $60M

A Pennsylvania official said royalties from Marcellus Shale natural gas drilling on public lands will add about $60 million to state coffers this year.

Testifying at the state Senate Appropriations Committee's budget hearing on Monday, Department of Conservation and Natural Resources (DCNR) Commissioner Richard Allan reportedly said 307 natural gas wells are currently producing on about 700,000 leased acres.

According to a report by StateImpact Pennsylvania, most of the legislators were thrilled by news of the royalties. "You're doing such a good job in opening land up and making it available, the next thing we're going to hear is you need more money for management because there are too many people using it," said Sen. Gene Yaw (R- Lycoming).

DCNR spokeswoman Christina Novak could not be reached for comment Tuesday.

About 1.5 million acres of the 2.2 million-acre state forest system overlie the Marcellus, with 700,000 acres currently leased for drilling. Shortly before leaving office, then-Gov. Ed Rendell placed a moratorium on leasing the remaining 800,000 acres (see Shale Daily, Oct. 27, 2010). His successor, Gov. Tom Corbett, supports expanding more forested areas to leasing, but that hasn't happened yet for several reasons, including continuing low natural gas prices (see Shale Daily, March 7, 2012; Nov. 15, 2010).

Last April, the environmental group Rainforest Alliance reported that independent auditor SmartWood had certified that Pennsylvania's state forest system was being properly managed (see Shale Daily, April 5, 2012). Two months later, the DCNR unveiled a policy for leasing land under and adjacent to the state's publicly owned navigable streams, lakes and waterways (see Shale Daily, June 5, 2012).

But not everyone was pleased with Allan's testimony. According to StateImpact, Sen. Jim Ferlo (D-Allegheny) derided the oil and natural gas industry and Allan's methods.

"They're not caring," Ferlo said of the industry. "As far as I'm concerned, they've committed environmental pillaging of a lot of the land in the area outside the domain of DCNR...[and] unless I'm wrong, there's not a public review process where people would be able to formally comment to the DCNR, or to yourself as the secretary, prior to you rendering some actual formal decision."

Allan is scheduled to appear before the state House Appropriations Committee for another budget hearing on March 5.

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