Maryland’s portion of the Marcellus Shale may be limited to only the two westernmost counties, but its development would benefit the entire state, Drew Cobbs, executive director of the Maryland Petroleum Council, told an audience in Hagerstown, MD, on Wednesday.
Speaking at a breakfast meeting of the Hagerstown-Washington County Chamber of Commerce, 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’s Shale Daily on Thursday. “They had sort of a mixed knowledge of the issues. I think they felt that this was an excellent opportunity for Maryland and that it makes sense to do this.
“They’re on the fringe — they really aren’t in the Marcellus area — but the Utica Shale may lie under Washington County.”
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.
The development of the Marcellus Shale, while still quite active, has cooled off from the original drilling frenzy as the price of dry natural gas has crashed. According to NGI‘s Shale Daily Unconventional Rig Count for the week ending July 6, there were 122 rigs actively drilling in the Marcellus for oil and gas. The current activity level is down 3%, or four rigs, from the 126 in operation the previous week, and down 15%, or 21 rigs, from the 143 rigs in action one year ago.
Cobbs also spoke about a report conducted by Sage Policy Group Inc. for the Maryland Petroleum Council (see Shale Daily, March 6). That report, released in March, found that during the lifetime of drilling in Maryland’s portion of the Marcellus:
Although the Maryland House of Delegates passed a bill calling for a 7.5% state severance tax in March, the legislation, HB 907, died in the Senate (see Shale Daily, March 28). Another bill — HB 1204, which specified surety bond and liability insurance requirements for operators — also passed the House but died in the Senate (see Shale Daily, March 21).
A third piece of legislation — HB 1123, which establishes a “presumptive impact area” within a 2,500-foot radius from a vertical wellbore and calls for operators to replace water supplies contaminated by oil and gas drilling — passed both chambers of the Maryland General Assembly and was signed by Gov. Martin O’Malley on May 22.
Only two counties in Maryland — Garrett and Allegany, 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.
In December an advisory panel formed by O’Malley recommended that the General Assembly impose a severance tax on gas production and a fee on gas leases (see Shale Daily, Dec. 14, 2011). The panel, composed of a broad range of stakeholders (see Shale Daily, July 22, 2011), 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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