A Pennsylvania House of Representatives committee has passed legislation that would place a five-year moratorium on the leasing of state forest lands for natural gas operations and could make leases harder to get even after the moratorium expires.

HB 2235 would require the state’s Department of Conservation and Natural Resources (DCNR) to produce an impact assessment of natural gas operations on state forest lands that have already been leased. After the five-year moratorium expires, the legislation would prohibit DCNR from leasing state forest lands for natural gas operations unless it first determines that the proposed lease “would not unduly compromise the state forest’s ecological, recreational, social and aesthetic values,” according to the bill, which was approved Thursday by the Environmental Resources and Energy Committee.

In November DCNR said it was making nearly 32,000 acres of additional state forest land available for natural gas leasing (see NGI, Nov. 16, 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. About 660,000 acres of forest land currently are under lease for gas production, with about 750 wells in production.

Pennsylvania Gov. Edward Rendell signed legislation last week that requires well production information from the Marcellus and elsewhere in the state to be filed with the Pennsylvania Department of Environmental Protection (DEP) twice a year, and calls for those reports to be posted online every six months.

SB 297 amends the state’s Oil and Gas Act, requiring operators to file by Aug. 15 initial reports including the status of each well and production data for the preceding year. Subsequent reports to include any changes to well status and production data for the preceding six months must be filed by Feb. 15 and Aug. 15 of each year.

The amendment requires DEP to post the reports on its website after six months. The Oil and Gas Act had required DEP to keep the reports confidential for five years. The information will be available to regulation agencies, competing gas producers and potential market entrants, and may also be used by the state in enforcement proceedings and for statistical purposes, according to the Washington, DC, law firm of Steptoe & Johnson.

Rendell had asked lawmakers to reconsider a proposal to impose a 5% severance tax on natural gas extraction in the Marcellus (see NGI, Feb. 15). The tax proposal was tabled during budget negotiations in the General Assembly last year (see NGI, Jan. 18; Sept. 7, 2009).

The U.S. Geological Survey has estimated that the shale contains as much as 50 Tcf of natural gas. A recent study estimated that the Marcellus will generate $13.5 billion per year in economic value and create 175,000 jobs in Pennsylvania by 2020, according to members of the state’s Public Utility Commission (see NGI, March 15). The commission has scheduled a special en banc hearing on April 22 to examine jurisdictional issues related to natural gas development in the play.

The Pennsylvania Supreme Court in an expedited case on Wednesday rejected an attempt by Marcellus Shale landowners to receive higher royalty payments from natural gas operators (see related story).

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