PA Commission Issues Final Report on Marcellus Shale Drilling

Pennsylvania Governor Tom Corbett’s Marcellus Shale Advisory Commission 0n July 22 issued its final report, with 96 policy recommendations related to the rapid growth of the oil and gas industry due to the Commonwealth’s location in the world’s second-largest natural gas field.

The recommendations range from requiring comprehensive training for emergency response personnel to streamlining permitting processes for construction of gathering pipeline and related infrastructure necessary to speed the product to market. The recommendations are not law and would have to be implemented through regulations or legislation.

The Commission voted unanimously to recommend that the Governor push to impose an “impact fee” on oil and gas exploration companies drilling in Pennsylvania to offset the extraordinary expense being borne by local governments and Commonwealth citizens due to unconventional natural gas development. Proceeds from such a fee could address the wear and tear to roadways, bridges, and water treatment plants, and the increasing need for general community services in areas most affected by the “Marcellus Rush.”

The Commission also saw a need for some proceeds to be earmarked for “environmental remediation.”

Noting the potential economic benefit of properly managing the resource, the Commission urged consideration of natural gas uses beyond the traditional. For example, perhaps seeking to encourage conversion of coal-fired electric generation units to natural gas units, the Commission suggested that Pennsylvania’s Alternative Energy Portfolio Standards Act be amended to include natural gas as a Tier 2 “alternative energy source.” Similarly, the Commission recommended legislation or regulations to promote the use of vehicles powered by natural gas.

The Commission recommended that oil and gas exploration in the Marcellus Shale formation be regulated under Pennsylvania’s Oil and Gas Conservation Law. Currently, landowners can say no to oil and gas companies looking to lease Marcellus Shale interests.  If the law were amended, companies could seek orders from the Pennsylvania Department of Environmental Protection compelling landowners to lease their Marcellus Shale rights (known as “forced pooling”). Proponents of forced pooling say it makes resource removal more efficient by promoting the orderly spacing of wells.

Many recommendations focused on the efforts to reduce the risk to health and the environment from hydraulic fracturing, or “fracking,” necessary to free the natural gas bound up in the solid Marcellus Shale. The Commission recommended that the Commonwealth consider the following:

*   Doubling civil penalties for violations of the Oil and Gas Act, which controls the technical and permitting aspects of oil and gas drilling in Pennsylvania
*   Expanding a well operator’s presumed liability for impaired water quality from within 1,000 feet of an oil and gas well to within 2,500 feet, and from six months to 12 months after completion or alteration of the well
*   Expanding a well operator’s presumed liability for impaired water quality to apply to well stimulation such as hydraulic fracturing
*   Limiting future leasing of state forestland to agreements that result in no or minimal surface impact to state-owned land
*   Creating a system within the Commonwealth’s Department of Health for investigating and responding to health complaints

Marcellus Shale Commission from Pennsylvania Final Report

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