Safe Drilling Initiative Developments

The spring Deep Creek Lake Dispatch article focused on legislative actions and outcomes. This update is designed to report on recent developments related to the ongoing, Governor-tasked "Safe Drilling Initiative". The task of identifying "safe drilling" regulations and mechanisms---along with exploring other factors such as broader community and economic impacts---is squarely in the hands of the "Safe Drilling Initiative". This ongoing process provides a unique opportunity to provide input to state-level decision-making and to potentially influence regulatory outcomes. Your committee is committed to following and engaging in the process in whatever ways are appropriate and hopefully productive.

"Safe Drilling Initiative" Developments

The "Best Practices" Study Report---As you may know, MDE recently announced the release, for public comment, of the so-called  "Best Practices" report. This particularly critical study report is the second of three which were tasked by the Governor's 2011 Executive Order, each to be developed jointly by MDE and DNR in consultation with the Governor-appointed Independent Advisory Commission. Public comments are to be provided by 9 August, roughly 30 days after the 9 July public presentation discussed briefly below. The report is available here  at MDE website, along with instructions on how to submit comments. A final report reflecting consideration of public comments is currently targeted for August 2013. The substantive content is based substantially on a "feeder" best practices study conducted by the Appalachian Laboratory in Frostburg, an element of the UMD Center for Environmental Sciences. This latter study is also available on the website.

The committee has been reviewing both the Appalachian Laboratory report and a series of MDE/DNR "best practices" report drafts which led to the current version for public comment. Committee members did attend the 9 July MDE/DNR presentation and are currently reviewing the final draft. We will submit comments by the 9 August deadline and welcome any POA member input. Our comments will be made available on the POA website shortly thereafter. And, as we understand it, all public comments will be posted on MDE's Safe Drilling Initiative website.

As outlined in the press release (captured in the  27 June issue of the Republican), the identified best practices include (1) mandatory industry submission and state approval of a Comprehensive Gas Development Plan (CGDP), for an area, before the individual well-permitting process can commence, (2) specified "setback" distances between drilling activities and private wells, residences, scenic pathways, etc., (3) engineering level design and implementation standards (e.g., for well casing and cement, handling of "flowback" water, etc.) and (4) collecting specified environmental quality baseline information for a period of  2 years prior to drilling. There is controversy about whether the report's recommendations in areas like (1) and (4) above are more demanding/constraining than needed, discouraging industry investment in MD.

There is an interesting analysis of the extent to which the proposed restrictions and constraints on vertical drilling--- on public land (none) and private land (various setbacks, etc.)---would deny recovery of natural gas. The analysis shows that, assuming a reasonably conservative horizontal "reach" of 4000 feet, industry would still be able to recover gas from 94% of the underlying deep shale.

Turning to the 9 July presentation at Garrett College, the MDE and DNR presenters summarized the recommended best practices and highlighted certain areas (e.g., the CGDP requirement). They responded constructively to concerns voiced by attendees. These concerns ranged from risks to well-provided water, through adverse impacts of "industrialization" (e.g. noise pollution, excess traffic on public roads), to topics beyond the best practices report per se (e.g., identifying and calibrating risks as a basis for decisions, increasing public awareness and transparency).

A Study of Community and Economic Impacts---This study, to be conducted by the Regional Economic Studies Institute (RESI) within Towson University, is just getting underway. It is intended to provide an objective analysis  of  both economic and broader community impacts---both positive and negative---if drilling were to proceed. An early step included interviews with a long list of western MD stakeholder organizations and individuals, attempting to understand their perspectives and concerns. The POA was included in the stakeholder list. Three POA board members met with the study team on 26 June (Troy Ellington, John Quilty, Ed King). Topics discussed included potential property value impacts, potential changes in the character of the DCL environment, and the need for clear and explicit assumptions about the nature and level of potential natural gas recovery activity to underpin the study. We were favorably impressed by the apparent commitment to a balanced treatment of often-controversial issues, not an easy task.

Looking forward---Beyond the immediate task of developing and submitting comments by 9 August on the "best practices" report, the committee intends to-

• Track the final "best practices" report and, more importantly, the progress in translating study recommendations into practical and enforceable regulations.
• Review and potentially engage in the RESI study and any other studies initiated in support of the targeted August 2014 third and final report. A study of public health impacts is planned.
• Selectively follow developments in other states (esp. NY and PA) and at the federal level (e.g. the EPA study of water issues, including case studies of experience in PA and elsewhere). 

Please contact John Quilty, chairman of the POA Marcellus Shale Committee, with any questions or comments. For additional reference data, the Power Point Presentation presented at the June POA board meeting can be found here.  Dialogue with members and other stakeholders if of course welcome.