The Marcellus Shale Safe Drilling Initiative Advisory Commission announced Monday a series of recommendations to protect landowners and the state from the risks of natural gas drilling through hydraulic fracturing.
The commission, tasked with making recommendations on how to regulate natural gas drilling in Western Maryland, voted to recommend a Surface Owner Protection Act, which protects landowners who do not own the rights to the minerals under their land from economic, health and environmental damage caused by drilling. The commission also recommended a state severance tax to be paid by companies extracting nonrenewable resources, and a landmen registration to keep track of individuals working for oil and gas companies to obtain leases from landowners.
The recommendations will be presented to the General Assembly, which could create legislation in the 2013 session that starts Wednesday.
However, the recommendations leave out key elements, including which landowners would be covered under a Surface Owner Protection Act, and the amount of the severance tax. Such details will have to be worked out during the legislative process, commission members said.
Hydraulic fracturing, commonly called fracking, is a drilling process in which a mixture of water, sand and chemicals is pumped into the ground to release gas trapped in rock formations.
Commissioners disagreed on whether landowners who signed leases without an understanding of the risks of fracking should be retroactively covered by a Surface Owner Protection Act, and could not reach consensus on whether landowners with mineral rights also should be protected beyond protections written into leases.
A severance tax is levied when a company removes nonrenewable resources. Garrett and Allegany counties already levy a 5.5 percent severance tax on natural gas, and the commission is calling for an additional state tax, which would take into account local taxes and the tax rates in surrounding states. Revenue from the severance tax would go into a fund to mitigate any negative effects of the drilling.
The recommendations come as some legislators continue to call for a statutory moratorium on hydraulic fracturing, the method by which natural gas in the Marcellus Shale formation would be extracted.
The Marcellus Shale formation, which holds the largest store of natural gas in the country, runs under the Appalachian Mountains in New York, Pennsylvania, West Virginia, and Allegany and Garrett counties in Western Maryland.
“I’m pleased with some of the recommendations coming out of the commission, but what’s glaring is that there are more questions than answers,” said Del. Heather R. Mizeur (D-Dist. 20) of Takoma Park.
Gov. Martin O’Malley (D) issued an executive order in 2011 that bars state agencies from approving drilling permits until after extensive study of the health and environmental effects of fracking is conducted, although the order did not include a funding provision for such studies. About 160,000 acres have been leased in Maryland for drilling, though some of those leases have since lapsed, and no drilling permits have been issued.
“We have not weighed in on the all-important question of whether to go forward,” said David Vanko, chairman of the commission and dean of the Jess and Mildred Fisher College of Science and Mathematics at Towson University. “That’s part of our directive, and we have about another year to get to that.”