Indications from a meeting on Monday of the Marcellus Shale Safe Drilling Initiative Advisory Commission in Annapolis are that Maryland will continue to chart a cautious course for the exploitation of its unconventional energy resources, said commission member and Republican State Sen. George Edwards, who represents three counties in western Maryland.
“The commission is supposed to be done with their work in August of 2014, so I don’t see any drilling occurring at least until then, but I’m optimistic that at some point we’ll be able to drill. When that will occur, I can’t give you a date at this point,” Edwards told NGI’s Shale Daily.
The 14-member commission consists of state and local government officials, industry representatives, environmentalists, attorneys and academics. It is steering Maryland toward the implementation of one of the strictest regulatory regimes in the country, Edwards said. “Some of the things that we’ll be doing are what the other states didn’t start off doing but did later.”
The commission recommended three main areas of legislation at the meeting, said commission member Harry Weiss, a partner at law firm Ballard Spahr LLP. The legislative recommendations centered on surface owners’ protection, landman registration and a severance tax, issues that were initiated by the commission early last year following Gov. Mark O’Malley’s recommendations in mid-2011 (see Shale Daily, Jan. 12, 2012; June 7, 2011).
“If the legislature passes our recommendation, all surface owners will be protected [from property damage by drillers] whether they own the subsurface or not,” Weiss said. In western Maryland, most surface owners own the subsurface as well, he said. There was some disagreement within the commission over whether those who have already leased their surface to oil or natural gas developers should receive protection. A majority of the commission voted to recommend that those lease owners be protected as well.
The landman registration statute would allow property owners to check the qualifications and affiliation of landmen who approach them for developers.
“The severance tax would set a pot of money aside to be used down the road if something were to happen that they [regulators] couldn’t determine who caused it to happen,” Edwards said. Oil and natural gas severance tax regimes already are in place in many of the biggest energy-producing states, including Texas.
Edwards noted a variety of other regulations that eventually may be enacted by the Maryland General Assembly, such as rules to require operators to double or triple case their wells.
As part of the permitting process, operators would be required to test the water within 2,500 feet of the wellhead to establish baseline levels of cleanliness. “It’s a protection thing for the companies because you’re going to get people who say ‘our water wasn’t bad and you came in here and all of a sudden it’s bad,'” Edwards said. “It’s important for the companies to know what the water is like so they can say look, ‘here’s what the water was like before our company moved in, and it was already bad.'”
A lack of baseline monitoring has been an issue in several recent cases involving possible water contamination from drilling in Pennsylvania and Wyoming.
In fact, a November 2012 report by the Maryland Department of Resources that was presented at the meeting determined that the water quality in western Maryland is acceptable. Nearly 50 water wells in the region were tested on a number of parameters, including the presence of methane. “None of them exceeded the [methane] limits of what you would consider dangerous, so the water is pretty good, actually,” Edwards said.
Maryland Gov. Martin O’Malley created the commission by executive order in June 2011. It is charged with helping to create the permitting conditions for hydraulic fracturing (fracking), without which unconventional drilling will not commence. The commission will conclude its work in August 2014.
“There is a de facto moratorium. It [the moratorium] is not written into law, but we are not going to issue permits until we know what conditions to attach to them,” said Brigid Kenney, senior policy adviser for the Maryland Department of the Environment.
At a December 2012 fracking conference in Baltimore, State Del. Heather Mizeur, a Democrat who represents Montgomery County, said she isn’t sure if the de facto moratorium could withstand potential legal scrutiny from oil or natural gas companies. She plans to introduce legislation in this session that would formalize the moratorium until the state government determines that fracking is environmentally friendly (see Shale Daily, Sept. 14, 2012).
Edwards does not support Mizeur’s planned proposal. “That’s just a delaying tactic by people who don’t want to drill in Maryland. They’ll do anything that keeps pushing it out, pushing it out,” he said.
“There’s a debate over whether Maryland should allow unconventional oil and gas drilling at all,” Weiss said. “So I think that’s the backdrop.”
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