House Committee Slashes Tax Increases

By Daniel Menefee,

ANNAPOLIS—Maryland wants to set a gold standard for safety to drill for natural gas in western Maryland’s Marcellus shale deposits, which could start as soon as as August 2014.

The House moved two drilling-related bills closer to passage Monday night. One funds an impact study and the other provides legal recourse to Marylanders if health and property are adversely affected by drilling.

“There is a presumption of liability,” Del. Heather Mizeur D-Montgomery, the lead sponsor of the bills, said on Friday. “If there is contamination of the water supply, the presumption is that the driller caused it, and they have to prove they didn’t, rather than the onus being on the community to prove the gas company is liable.”

Drilling companies must prove they are innocent if contamination occurs within in a certain time frame and within a certain distance from a drilling rig, Mizeur said.

The second bill funds a study by the Marcellus Shale Advisory Commission paid for by a one-time fee of $15 per acre for leases that were signed between Jan. 1, 2007 and Aug. 1, 2014, when drilling is expected to be approved.

Prorated rebates will go back to the gas companies if money is left over at the conclusion of the study. Revenue from the fee is estimated at $3.2 million through fiscal year 2014.

Last year, Mizeur pushed for a moratorium until a regulatory framework was established by the Department of Natural Resources and Maryland Department of the Environment to avoid the catastrophes that have occurred in New York and Pennsylvania for nearly a decade.

Del. Wendell Beitzel, R- Garrett, has maintained that MDE and DNR currently have the regulatory muscle to protect the environment by putting conditions on permits.

“If they have any concerns, they put conditions on the permits,” Beitzel said Monday morning. “They have that authority now, and it happens now.”

He said the moratorium placed on drilling last year has forced gas companies to extend leases through a legal maneuver called “force majeure” because gas interests have been unable to meet their contractual obligations to landowners because of the moratorium.

“There are provisions in the lease that require gas companies to drill their wells in a certain period of time or they lose the lease,” Beitzel said Monday afternoon. He said gas companies have sent letters to landowners claiming the right to extend the lease.

Beitzel offered a floor amendment Monday night to remove the requirement for “metes and bounds” surveys, which he says will require landowners to pay “thousands of dollars” for a property survey before a permit can be issued. He said current deed descriptions should be all that is needed to obtain a drilling permit.

The amendment was accepted by Environmental Matters Committee Chairwoman Maggie McIntosh. Both bills are expected to pass by the end of the week.

Another provision requires the gas companies to post a performance bond with the state of at least $50,000 for each gas well. They also must carry liability insurance of $300,000 for each person and $500,000 for each occurrence of damage to property.

The Marcellus shale layer is the size of Greece and spans from Tennessee and West Virginia to just south of the Adirondack Park in upstate New York. Much of the Marcellus Shale lays under a significant portion of the Chesapeake Bay watershed.

In order to get natural gas out of the shale, drillers must use the controversial and highly toxic process of hydro-fracturing, or fracking. This involves injecting a cocktail of toxic chemicals, sand, and vast quantities of water into the shale formations buried up to 9,000 feet underground. The drilling turns horizontal at the shale formation, where controlled explosions work with the chemicals to release the trapped natural gas.

Environmental contamination happens when fracking waste is extracted. It occurs most commonly where leaking well housings pass through the water table. However, it can also be the result of felonious mishandling of used chemicals or the improper disposal of fracking chemicals at sewage treatment plants that are not equipped to handle them.

Pennsylvania and New York have experienced widespread contamination of private wells, ground water and rivers due to poor regulations. The backlash has resulted in a slew of class action lawsuits where drilling is the most intense.

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