Thursday, January 28, 2010

Governor: DEP Hire 68 More Staff To Deal With Marcellus Shale, Pass Severance Tax

Gov. Rendell today directed the Department of Environmental Protection to begin hiring 68 new personnel who will make sure that drilling companies obey state laws and act responsibly to protect water supplies. Again calls on General Assembly to pass a natural gas severance tax.
DEP also will strengthen oil and gas regulations to improve well construction standards. These critical upgrades are designed to prevent gas leaks that can pose risks to the public and water quality.
“Interest in Pennsylvania’s Marcellus Shale formation is greater than ever before and as natural gas prices continue to rise, that interest will only increase,” said Gov. Rendell. “In fact, the industry has told us that they expect to apply for 5,200 permits to drill in the Marcellus Shale this year -- nearly three times the number of permits we issued in all of 2009.
"Given these conditions, an extraction tax is gaining widespread support across our state and I will again ask the General Assembly to enact such a levy. It is fair and affordable to drillers. They know it, and so do members of the House of Representatives who voted for it last year.
“The actions I am announcing today, however, are about decisive, progressive protections for the people of Pennsylvania. We were able to hire 37 additional inspectors and permitting staff in 2009, but the industry’s projected growth in 2010 means that we need additional inspectors to ensure oil and gas companies follow environmental laws and regulations.
'As I’ve said all along, we want to encourage the development of this resource because it’s a tremendous economic opportunity for the state, but we will not allow that to happen at the expense of our environment.”
DEP performed 14,544 drilling site inspections in 2009 and took 678 enforcement actions against drillers for violations.
The 68 additional personnel will be funded entirely from money generated by new, higher permitting fees that were instituted in 2009—the first such increase since 1984. The new fees were put in place with bipartisan support from the General Assembly, industry and environmental organizations.
The Governor noted that given the need for these additional health and safety personnel and the dedicated funding source that is independent of the state’s General Fund, these new hires are exemptions to the general hiring freeze he instituted last year.
DEP’s work to amend Pennsylvania’s oil and gas regulations will strengthen well construction standards and define a drilling company’s responsibility for responding to gas migration issues, such as when gas escapes a well or rock formation and seeps into homes or water wells. Specifically, he said the new regulations will:
-- Require the casings of Marcellus Shale and other high-pressure wells to be tested and constructed with specific, oilfield-grade cement;
-- Clarify the drilling industry’s responsibility to restore or replace water supplies affected by drilling;
-- Establish procedures for operators to identify and correct gas migration problems without waiting for direction from DEP;
-- Require drilling operators to notify DEP and local emergency responders immediately of gas migration problems;
-- Require well operators to inspect every existing well quarterly to ensure each well is structurally sound, and report the results of those inspections to DEP annually; and
-- Require well operators to notify DEP immediately if problems such as over-pressurized wells and defective casings are found during inspections.
“These new draft regulations, which were developed through open meetings with experts in the industry, are designed to give Pennsylvanians peace of mind by bringing our state’s requirements up to par with other major gas producing states or, as in the case of the well casing requirements, to a level that is even more rigorous,” said Gov. Rendell.
The new regulations will be offered for public comment on January 29 before going through DEP’s formal rulemaking process.
Interest in Pennsylvania’s Marcellus Shale formation has been increasing. One third of the more than 6,200 oil and natural gas drilling permits DEP issued in 2009 were for drilling in the Marcellus Shale. By comparison, only four of the more than 6,000 permits issued in 2005 were for the Marcellus formation.
For more information, visit the DEP Marcellus Shale webpage.

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