Bay Journal

PA officials move to regulate natural gas drilling; impose tax

DEP secretary meets with local residents to allay fears

  • By Rona Kobell on June 01, 2010
  • Comments are closed for this article.

Several agencies and legislators in Pennsylvania appear to be stepping up their efforts to regulate and tax the natural gas industry that developed in the state as companies moved in to exploit the Marcellus Shale, a natural gas-rich rock formation that extends across much of the Appalachian Basin.

The Susquehanna River Basin Commission, which regulates water withdrawals from the river system and issues permits for the massive withdrawals necessary for the drilling process, opened an office in Sayre, PA, to be closer to the action. With the new office in place in northern Pennsylvania, SRBC inspectors will not have to travel all the way from Harrisburg and will be more efficient.

In response to the withdrawal of millions of gallons of water from streams without permission, the agency changed its charter so that it can regulate if even one gallon is withdrawn. It has fined several companies for not having the proper permits. The office in Sayre, which has three employees, will help it cover more ground.

Meanwhile, the Pennsylvania Department of Environmental Protection is making overtures to residents who have long believed that the department has not done enough to protect their water and other natural resources.

In May, DEP secretary John Hanger met with residents of Dimock, the Susquehanna County town where nearly 100 wells have been drilled and the site of several spills. For months, several residents couldn't drink their water. The DEP has levied multiple fines against Cabot, the company drilling in Dimock, although residents have long said the agency isn't doing enough to protect them. The meeting was called largely to allay residents' fears that the department wasn't listening to their concerns.

Also in May, the DEP's environmental quality board approved the first state regulations to protect rivers and streams from drilling waste, which are rich in total dissolved solids. The new law requires discharges with total dissolved solids from multiple industries to meet a concentration threshold of no more than 2,000 milligrams per liter. Discharges of total dissolved solids from drilling operations can't be above 500 milligrams per liter.

"The reason is that other industries do not produce a wastewater that is as high in chlorides and total dissolved solids. The drilling industry has very high levels of TDS in their wastewater, and they have other options," said DEP spokesman Tom Rathbun.

Last year, drillers were taking their wastewater to plants around the state. The plants were putting the wastewater through their normal pollution-reduction paces before discharging it into streams and rivers. But drilling wastewater is far higher in total dissolved solids than any household waste, and the DEP prohibited any more plants from taking the waste in late 2009 because of concerns that the concentrations were too high. Meanwhile, some drilling companies, such as Range Resources, were developing and refining their ability to recycle wastewater so they wouldn't need to discharge in the rivers at all.

The board also approved a 150-foot stream buffer requirement and said it would increase permitting fees to bring in an additional $5 million, which will support county conservation districts.

Momentum in the Keystone State's legislature is building for a gas severance tax, which could bring in several hundred million dollars to state coffers. The revenues would help offset the costs of the environmental problems and also help to hire more inspectors as the industry expands. The Pennsylvania conservation districts, as well as most of the state environmental groups, support such a tax. Gov. Ed Rendell backed such a tax in 2009, but changed his mind, saying the industry-which included billion-dollar oil and energy companies-needed to get its start before it could pay. The governor this year said he supports the tax.

Rendell also said he supports a three-year moratorium on gas companies leasing land in Pennsylvania's forests. Pennsylvania's Department of Conservation and Natural Resources just announced it leased 33,000 more acres in forestland near where Centre, Clinton and Lycoming counties meet. That transaction alone will bring in $120 million for the state.

At a national level, Congress is considering raising the per-barrel fee oil companies pay into a cleanup trust fund. The discussion comes on the heels of the Gulf of Mexico oil spill, which is certain to cost billions of dollars to clean up.

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About Rona Kobell

Rona Kobell is a former writer for the Baltimore Sun. .(JavaScript must be enabled to view this email address).

Read more articles by Rona Kobell

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