Tuesday, September 14, 2010

Northeast regulator could be key to shale gas development

As the stakeholders around the country debate the merits of hydraulic fracturing, an obscure northeast U.S. regulator is holding up shale gas production in the region. The Delaware River Basin Commission, "has stopped the gas rush in its tracks in northeastern Pennsylvania's Wayne and Pike counties," and in the four-state river basin where it controls development, Mike Soraghan of Environment & Energy Daily reports. DRBC executive director Carol Collier said, "Pennsylvania and New York regulators do not have strong authority to regulate water issues, and the commission can fill in the gaps to protect the Delaware watershed," Soraghan writes. (DRBC map)

"We are hoping to have a stronger umbrella of protection because of the Delaware's unique qualities," Collier told Soraghan. DRBC is expected to propose new regulations for Marcellus Shale development as early as Wednesday that could be among the most, if not the most, stringent in the country. "They are expected to require companies to put aside much more money than the state requires for reclamation and cleanup," Soraghan writes. Now as DRBC delays development many local landowners are blaming the agency for preventing them from cashing in on the drilling boom.

The basin includes Pennsylvania, where lawmakers hope a severance tax will help them cash in on the drilling boom, and New York, where the state legislature could vote on a temporary drilling moratorium this month. DRBC's decision could have implications across the country, Soraghan writes, noting if the agency says drilling could harm drinking water "it would provide powerful political ammunition to drilling opponents from New York to Ohio, and beyond." (Read more, subscription required)

UPDATE 9/17: The DRBC announced it would scale back some of its proposed regulations, including the amount of money it will require drilling companies to set aside for environmental cleanup and regulation. "Previous drafts, according to a source, had recommended requiring a $5 million financial assurance bond for each well site," Mike Soraghan of Environment & Energy Daily reports. "We started off very high," Carol Collier, executive director of DRBC, said after a commission meeting Wednesday. "We're coming down a bit." The regulations were expected by the end of the month, buy Collier said they may be delayed until Oct. 15. (Read more, subscription required)

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