Billions of Dollars Possible

TOWANDA – A state Department of Environmental Protection official told a legislative panel today that developing the natural gas reserves in the Marcellus Shale formation could generate billions of dollars in new economic investments for commonwealth citizens and communities, but doing so must include the protection of the state’s environment.

Robert Yowell, director of DEP’s Northcentral Regional Office, testified before the state House Republican Policy Committee on the economic and environmental issues associated with drilling in the 5,000- to 8,000-foot deep geologic formation.

“The economic potential from the Marcellus Shale could be a boon to Pennsylvania communities, particularly regions in the north central and northeastern parts of the state that have not traditionally seen much gas well drilling development,” said Yowell. “The department has fielded many calls over the past year from landowners, farmers, local governments, environmental organizations and sportsmen’s groups who have been concerned about how we intend to facilitate the tremendous economic opportunities before us while protecting our land and water.

“There is no question that the Marcellus Shale holds tremendous potential, but unless it is managed properly, this development can create serious problems that could last for years or be irreversible. We’re committed to having procedures in place that protect our natural resources.”

Yowell explained that DEP has worked with the Susquehanna and Delaware river basin commissions and the oil and gas industry to create a consistent statewide application process for Marcellus Shale drilling permits that requires gas well operators to better protect water resources.

Operators must provide additional information as part of the permitting process, including the sources and locations of water to be used in the drilling process, anticipated impacts of drilling on water resources, and locations of facilities where drilling fluids will be taken for treatment and disposal.

Since Aug. 15, DEP has issued 73 permits containing the enhanced water management requirements to companies seeking to drill for natural gas in the Marcellus Shale formation, which underlies much of Pennsylvania and portions of New York and West Virginia. It is estimated to hold as much as 50 trillion cubic feet of recoverable natural gas.

Penn State University estimates the economic value of the Marcellus Shale formation at $1 trillion and that for every $1 billion in royalties paid to Pennsylvania residents, nearly 8,000 new jobs will be created each year over the next three years.

While it has long been considered prohibitively expensive to access the natural gas contained within the Marcellus Shale, recent advances in drilling technology and rising natural gas prices have attracted new interest in this previously untapped formation.

Extracting natural gas from the Marcellus Shale requires a drilling process known as horizontal drilling, which uses far greater amounts of water than traditional natural gas exploration. This water can originate from various sources including municipal suppliers or streams. Concerns about the effects of large water withdrawals on streams and aquifers have prompted the need to regulate planned withdrawals at drilling operations.

“Governor Rendell recognizes this economic potential and has made facilitating this development in a manner that is environmentally sound one of his top priorities,” said Yowell. “A small number of wells have begun production, and as the natural gas industry completes construction of pipelines and infrastructure, we can expect exploration and drilling activity to increase dramatically. While the department is committed to providing the industry with prompt reviews and timely decisions on all permit applications that meet our regulations, we are especially mindful of the consequences these operations could have on the state’s natural resources and are working aggressively to ensure no adverse consequences result from drilling activities.”

DEP has created a special webpage specific to the Marcellus Shale that features resources for industry and information on drilling questions for landowners and the general public, which is available at www.depweb.state.pa.us, keyword: Oil and Gas, then click on “Marcellus Page.”

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