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Regulators Suspend Operations of Two Marcellus Shale Producers

Pennsylvania regulators have ordered two companies exploring for natural gas in the emerging Marcellus Shale play to suspend a portion of their operations in northern Pennsylvania for violating the state's Clean Streams Law.

The state's Department of Environmental Protection (DEP) partially shut down the drilling operations of Range Resources-Appalachia LLC, a subsidiary of Fort Worth, TX-based Range Resources Corp., and Dallas-based Chief Oil and Gas LLC. The two producers operated impoundment areas in two townships in Lycoming County that collected water for use in their exploratory drilling operations in the Marcellus Shale.

"In the course of their operations, neither Range Resources nor Chief Oil and Gas have taken the necessary precautions to protect nearby streams from pollution or impairment during the drilling process," said Robert Yowell, director of DEP's North-Central Regional Office. "Drilling for natural gas is a water-intensive endeavor. That's even more so in the case of the Marcellus Shale, where this type of drilling can oftentimes consume millions of gallons of water.

The DEP's action coincides with an enforcement action taken by the Susquehanna River Basin Commission (SRBC) against the two producers for failing to obtain the required permits for ongoing water withdrawal. Permits are required for this type of activity because of the potential to impair or destroy the basin's water resources and cause pollution, regulators said.

"These orders will remain in effect until the department has received and approved a water management plan from both companies, and each firm has obtained the necessary permits," Yowell noted.

As the natural gas industry responds to increased energy market demand, Pennsylvania has become a hotbed for exploration and development, particularly in the Marcellus Shale formation in the northern part of the state. The DEP has received and reviewed a record-setting number of applications for gas well permits over the past four years, according to Yowell.

"All companies, in-state or out-of-state, planning natural gas drilling activities on Pennsylvania's soil must abide by the commonwealth's environmental rules and regulations that protect and safeguard the state's natural resources," he noted. "With increased interest and activity in oil and gas drilling throughout the state, Pennsylvania will experience a boost to its local economies, but we want to make sure that our environment and natural resources are not sacrificed in the process."

Yowell said the DEP and other state agencies and commissions plan to begin conducting site inspections at all permitted natural gas exploration and drilling sites. During the inspections DEP field personnel will be on hand to review procedures and regulations with operators and landowners.

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