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Wednesday, April 23, 2014

Governor's plan for leasing on state lands brings questions but no answers.


Last week, I attended the Department of Conservation and Natural Resources' (DCNR) Natural Gas Advisory Committee meeting to get a first glimpse of the highly anticipated Marcellus Monitoring Report. The meeting was divided into two parts, with the second half devoted to the monitoring report and the first focusing on Governor Tom Corbett's proposal to allow further leasing of Pennsylvania’s state parks and state forests so long as there is no additional “surface disturbance.”

The governor’s proposal would require drilling of the newly leased lands to occur from adjacent private lands or from already leased state lands. Given these restrictions, representatives from the gas industry expressed serious concerns regarding the practicality and feasibility of the proposal. Essentially, the big question was: Is it really possible to not have additional surface disturbance?

Here’s why. Well pads are designed for a certain number of wells, and wells can’t be drilled like spokes in a wheel; rather, the direction of their laterals is often determined by geology. These constraints only raised more questions, e.g. can drillers request additional well pads if they’re allowed under the existing lease? Can drillers expand existing pads if that’s needed to make drilling feasible?

Industry representatives also said that some temporary disturbance will be needed, and this prompted multiple questions from committee members, including: What is temporary? How long is temporary? Does the disturbance have to be low impact? What is low impact? Would seismic testing be permitted?

All of these questions raised concerns over the value of these leases. Specifically, given the restrictions in the governor’s proposal and the limited access drillers would have, would this lack of competition devalue the leases?  

Unfortunately, none of these questions were answered, and you have to wonder: Just how well thought out was the governor’s proposal?

Jennifer Quinn is central Pennsylvania outreach coordinator for PennFuture and is based in Harrisburg. She tweets @QuinnJen1.