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 referred to a committee Wednesday by the state’s Senate, which effectively killed the legislation for now.

The State Forest Natural Gas Lease Moratorium Act would have given Pennsylvania “a timeout to study the consequences of drilling in our state forests,” according to State Rep. Greg Vitali, who authored the legislation.

The Pennsylvania House of Representatives had approved the bill by a 157-33 vote. The Senate chose not to take up the bill, instead referring it to the Environmental Resources & Energy committee.

The amended version of the bill, which had originally called for a five-year leasing moratorium (see Daily GPI, March 29), would have put in place a three-year moratorium. It would also have required a comprehensive environmental impact study by the state Department of Environmental Protection (DEP) and a study on the environmental, economic and societal impacts of drilling in state forests. The bill would have given the Department of Conservation and Natural Resources (DCNR), which already regulates activity in the state’s Marcellus acreage, sole discretion to determine which land should be leased for gas drilling after the moratorium ended.

Pennsylvania has already leased 692,000 acres of state forest land in the Marcellus to drilling companies, according to Vitali, who said only nine gas wells have been drilled on state forest land. A total of about 3,400 Marcellus Shale drilling permits have been granted in the state, and nearly 1,400 wells have been drilled, according to Pennsylvania DEP Sec. John Hanger, who said the Marcellus could provide 10% of the country’s natural gas production by 2014 (see Daily GPI, May 6).

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.

Gov. Edward Rendell on Monday renewed his call for a 5% severance tax on natural gas extraction in the Marcellus Shale to help close a more than $1 billion state budget deficit. The Democratic governor has repeatedly asked the General Assembly to consider the tax proposal, which was tabled last year during testy budget negotiations for fiscal 2010 (see Daily GPI, Feb. 10; Jan. 19; Sept. 2, 2009).

“From our perspective, it’s still alive,” a Rendell spokesman told NGI. “The governor repeatedly calls for it, making the case that Pennsylvania needs to end its status as the only major natural gas producer without this tax.”

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