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Marylanders Urged to Back Marcellus Development

July 16, 2012
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Maryland's portion of the Marcellus Shale may be limited to only the two westernmost counties, but development would benefit the entire state, the executive director of the Maryland Petroleum Council (MPC) told an audience in Hagerstown, MD.

Speaking at a breakfast meeting of the Hagerstown-Washington County Chamber of Commerce, Drew Cobbs cited previous reports by the industry that found nearly 2,000 jobs would be created in western Maryland, bringing in $300 million in tax revenue. "They were very receptive, and I think it went pretty positive," Cobbs told NGI. "I think they felt that this was an excellent opportunity for Maryland and that it makes sense to do this."

During his presentation, Cobbs cited figures from the U.S. Energy Information Administration (EIA), which found that 1.09% of the Marcellus Shale lies within Maryland and that shale gas will represent 49% of U.S. dry gas production by 2035. Cobbs also spoke about a report conducted by Sage Policy Group Inc. for the MPC that was released in March.

The report stated that during the lifetime of drilling in Maryland's portion of the Marcellus about 365 wells would be in operation, and to bring each well online would require 420 people across 150 occupations. In 2025, the estimated peak year for drilling activity, Sage estimated that 1,814 Marylanders would be employed in fields related to well drilling, maintenance, royalty payments and expanded state and local government spending. It also said western Maryland could produce $300 million annually in natural gas output, in 2011 dollars, by the year 2025.

Sage researchers said Maryland would collect an estimated $214 million in revenue over the course of developing the shale play.

Only Garrett and Allegany counties, which are in the western Panhandle, overlie the Marcellus Shale, which the U.S. Geological Survey estimates could contain as much as 2.383 Tcf of technically recoverable natural gas. The Sage report said the two producing counties would prosper from development over the course of their drilling life: Garrett would receive $162 million, and Allegany County would receive $65 million. In addition, the report indicated that about $441 million (2011 dollars) of positive fiscal impact would be experienced during the play's development.

In December an advisory panel formed by the governor recommended a severance tax on gas production and a fee on gas leases (see NGI, Dec. 19, 2011). The panel, composed of a broad range of stakeholders, is scheduled to recommend best practices for gas exploration and production by Aug. 1, and to submit a final report on Marcellus drilling by Aug. 1, 2014.

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