Companies expecting to draw natural gas from Pennsylvania's prolific Marcellus Shale should be prepared to pay a severance tax, offer jobs to the state's residents and abide by a growing list of regulations, according to members of a panel who spoke Thursday during "Marcellus Shale Opportunities & Challenges," the first in a series of forums presented by Marywood University in Scranton, PA.
"We've heard before about a gold rush and a coal rush in those periods of our history. Today we're in a gas rush. Those other economic booms brought great prosperity, but also they left scars on the land and also unfortunately on workers," said U.S. Sen. Bob Casey (D-PA). "We can't repeat the mistakes of the past that have caused damage to Pennsylvania's health and landscape. We must make sure -- and I believe we must demand -- that corporate profits are not put ahead of safe drinking water for our children and our families."
According to Casey, efforts must be made to ensure that the Marcellus rush is "creating jobs for Pennsylvanians -- not just any old job for any American, but creating jobs for Pennsylvanians, and not just folks from states like Texas or Oklahoma."
Casey said he has introduced a bill to help increase on-the-job training so more Marcellus jobs will go to Pennsylvanians.
Casey has said he plans to introduce legislation intended to improve emergency response services at oil and gas wells (see Daily GPI, July 28). Casey said he was traveling from the forum to Clearfield County, PA, site of a June 3 blowout at an EOG Resources well (see Daily GPI, June 8). "No one was hurt -- no one was injured, thank goodness -- but a lot of mistakes were made because there wasn't an emergency response structure or regimen or program, pick your word, in place at that site to prevent what happened there."
Casey has also introduced the Fracturing Responsibility and Awareness of Chemicals Act to require the disclosure of the chemicals used in hydraulic fracturing processes.
"Pennsylvanians have a right to know what is being injected into the ground at thousands of sites across our commonwealth. The intent is not to stop hydraulic fracturing. That's not the intent. This is about disclosure, and this disclosure language is not going to stop hydraulic fracturing," Casey said.
He received the loudest ovation of the day from an audience of about 150 when he said that "if the chemicals used in the hydraulic fracturing process are not harmful and cannot compromise health and safety, or contaminate drinking water, or compromise the groundwater, or put the public risk -- if all of that is OK, then why can't we shine the light of disclosure on that process? I think we should."
Natural gas in the shale play is "like gold," according to Rep. Paul Kanjorski (D-PA), whose district covers a portion of Pennsylvania's easternmost Marcellus area.
"It's been discovered and the gold rush is here," Kanjorski said. "We should be smart enough to welcome our new citizens that are coming, our new business people that are coming. Just make sure that we have an understanding -- an unwritten contract -- 'don't exploit us, we'll work with you; exploit us and you can't imagine the bothersomeness we can be to you.'"
But Pennsylvania needs to recall lessons of the gold and coal rushes it experienced decades ago, according to John Quigley, secretary of the state's Department of Conservation and Natural Resources (DCNR).
"In each and every case of resource extraction in this state, we got it wrong," Quigley said. "We privatized profits and we socialized cost, and those costs are still being borne by us today." According to Quigley, whose department recently issued a report concluding that there is no unleased state forest acreage suitable for natural gas development remaining in the state (see Daily GPI, Aug. 16), putting the brakes on drilling is a good thing.
"We have decided as land managers that we can lease no more state forest land on a large-scale basis. We've reached the limit because any further leasing will involve ecologically and environmentally sensitive areas, wild and natural areas, old growth forests, some of the most pristine environmental experiences anywhere in the United States, and we need to draw the line and say 'enough is enough.'"
A severance tax supported by Gov. Ed Rendell and expected to be enacted by Pennsylvania lawmakers by Oct. 1 (see Daily GPI, June 30) will not kill the state's Marcellus drillers, Quigley said.
"Quite frankly, the argument that's been made against the severance tax has been that this is an infant industry that needs to find it's legs in Pennsylvania," he said. "Poor little infant Exxon, my heart bleeds for it...this industry's not going anywhere. It's the most productive play in the world -- at least has the prospects of it -- and the industry's not getting taxed out of the state by the very, very reasonable proposal that the governor has put into place."
The industry should be prepared for more regulations, Quigley said.
"We're going to launch a comprehensive monitoring program on state lands hopefully by the end of the year to begin to gather scientific data about the impact, and hopefully be able to translate some of that data into a broader statewide context, to help the commonwealth develop common sense protective public policies to deal with the impacts of this industry."
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