Pennsylvania should impose a temporary moratorium on leasing additional forest land for new natural gas development until a comprehensive environmental and community impact assessment can be completed, a report released last Tuesday argues. Such a moratorium should not affect existing leases, though, said the Pennsylvania Environmental Council (PEC).

Called "Developing the Marcellus Shale," the report calls on state government and the gas industry to adopt more stringent standards for drilling and extraction to prevent the kind of environmental impacts that have occurred throughout Pennsylvania's industrial past.

The report also includes a number of specific legislative and regulatory changes that PEC believes should be made to minimize the risk of accidents, environmental damage and public health hazards.

Among the recommendations is the creation of a Marcellus Shale Development Task Force that would identify best practices in the industry and apply them to operations in Pennsylvania.

PEC has called on the General Assembly to take the lead in requiring that any severance tax revenues realized from the development of the Marcellus Shale be directed to the management of the gas industry, its environmental impacts and its regulatory enforcement. The administration of Gov. Ed Rendell has estimated that a state severance tax on Marcellus Shale gas operations could generate more than $200 million per year. Earlier this month the governor said severance tax proceeds should benefit Pennsylvania residents (see related story; NGI, July 12).

"The Marcellus Shale is a once-in-a-generation energy and economic opportunity for Pennsylvania," said PEC President Don Welsh. "We have a deep historical, political and fiduciary responsibility to get this right for the citizens of this Commonwealth as well as future generations who will inherit the environment currently entrusted to us."

Current regulations on oil and gas drilling in Pennsylvania were put in place at a time when conventional extraction techniques were commonly used, PEC noted.

"Pennsylvania does not have standards in place for establishing or operating private water wells," the report notes. "Thus, we do not know if problems exist before gas well development occurs, or what the true nature and extent of any resulting impacts might be. While other regulatory programs require baseline water source assessment prior to activity (e.g., the underground mining program per the Surface Mining and Reclamation Act), the current oil and gas program lacks this degree of information and assurance."

There are currently an estimated 1,500 Marcellus Shale gas wells in Pennsylvania and industry officials predict that an additional 35,000 to 50,000 more will be developed by 2030, PEC said.

In the past year Marcellus drilling operations have led to a number of accidents and reports of environmental contamination, including recent explosions at Marcellus drilling rigs in Penfield, PA, and Moundsville, WV (see related story). PEC said Pennsylvania's gas drilling and environmental protection laws do not adequately address the extraordinary nature of the Marcellus Shale.

"The stakes in developing the Marcellus Shale -- both economic and environmental -- are far too great to take a business-as-usual approach," said John Walliser, PEC vice president of legal and governmental affairs.

"No one truly knows what the full extent of the local impacts from Marcellus Shale operations will be," Walliser said. "That's why it's critical to be mindful of the potential impacts and their associated costs now before drilling operations expand significantly. There's no reason why everyone -- the industry, the Commonwealth, communities and landowners -- can't benefit from the development of this extraordinary resource provided we take the proper steps at the beginning to ensure we don't leave behind a legacy of environmental and economic destruction for future generations."

Among the report's recommendations are:

PEC also recommends that a stakeholders group be convened to create the structure of a trust-based alternative to the current bonding system to cover the cost of closing wells that have completed all production.

Pennsylvania government should work with the gas industry and mineral rights owners to address concerns relating to gas extraction under state park lands, PEC said. Factoring in site-specific considerations, the state and industry should design best management practices to avoid unnecessary or adverse impacts to the state parks.

The PEC report, available at www.pecpa.org, is based on the proceedings of a two-day Marcellus Shale Policy Conference held in Pittsburgh in May.

©Copyright 2010 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.