There is no unleased state forest acreage suitable for natural gas development remaining in Pennsylvania's Marcellus Shale area, according to a report from the state's Department of Conservation and Natural Resources (DCNR).

Of the approximately 1.5 million acres of Marcellus land in Pennsylvania's state forests, about 700,000 acres is currently under lease or available for natural gas development only by private owners who own the subsurface rights to about 100,00 acres of the land. Another 702,500 acres remain unleased because the land is in ecologically sensitive areas, according to the report. A forest conservation analysis recently performed by the Nature Conservancy and the Western Pennsylvania Conservancy identified another 49,600 acres as "priority forest conservation areas" not appropriate for natural gas development. The rest of the acreage is considered primitive land (27,500 acres) or inaccessible without damaging sensitive areas (20,400 acres), DCNR said.

"We're left with small, fragmented areas that are not accessible for gas development without crossing and damaging the forest's wild character or ecological integrity," the report concludes.

A bill that would have placed a three-year moratorium on leasing of state forest land in Pennsylvania's Marcellus Shale for natural gas exploration, drilling or production was considered by state lawmakers before being shelved earlier this year (see Daily GPI, May 7). The bill would have required a comprehensive environmental impact study by the state Department of Environmental Protection and a study on the environmental, economic and societal impacts of drilling in state forests. The bill would also have given the DCNR, which already regulates activity in the state's Marcellus acreage, sole discretion to determine what land should be leased for gas drilling after the moratorium ended.

In May DCNR finalized a natural gas lease agreement allowing Anadarko Petroleum Corp. to access 32,896 acres that are surrounded by tracts of land now held by leases for which drilling companies already hold lease agreements (see Daily GPI, May 13). Because the newly leased tracts mostly may be accessed by gas operations on the adjacent tracts, the amount of new state forest surface area that must be disturbed is minimized, Pennsylvania Gov. Edward G. Rendell said at the time. The agreement would allow the state to meet its need for revenue from drilling next year -- Anadarko agreed to pay $120 million for access to the acreage -- while also fulfilling its obligation to protect Pennsylvania's natural resources, Rendell said.

In November DCNR said it was making nearly 32,000 acres of additional state forest land available for natural gas leasing (see Daily GPI, Nov. 11, 2009). The department said it would open six tracts of land in the prolific Marcellus Shale play, totaling about 31,967 acres, for a lease sale of subsurface oil and gas rights. DCNR has held 73 lease sales since 1947, the last of which was in 2008.

DCNR's January lease sale generated $128 million, with $60 million of the amount earmarked for the general fund budget and the additional $68 million applied to a target of $180 million to help balance the state budget for the fiscal year that begins July 1.

A recent report from the Pennsylvania Environmental Council concluded that the state 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 (see Daily GPI, July 19).

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