Maryland moves forward on fracturing regulations

Feb. 10, 2015
Maryland state officials planned to draft regulations that would allow hydraulic fracturing in the Marcellus shale in West Maryland provided that natural gas producers abide by certain stipulations limiting the risks of water contamination and air pollution.

Maryland state officials planned to draft regulations that would allow hydraulic fracturing in the Marcellus shale in West Maryland provided that natural gas producers abide by certain stipulations limiting the risks of water contamination and air pollution.

The decision stemmed from a report concluding a 3-year study by state agencies. Former Maryland Gov. Martin O'Malley signed an executive order in June 2011 establishing the Marcellus Shale Safe Drilling Initiative.

On Nov. 25, 2014, the Maryland Department of the Environment and the Department of Natural Resources released a draft report recommending that drilling be allowed in Garrett and Allegany counties if best practices are followed.

Implementation of regulations was expected to become effective after Gov.-elect Larry Hogan took office Jan. 21. The report from O'Malley's administration recommended regulations.

"We're committed to ensuring that Marylanders have access to the economic opportunities associated with [hydraulic fracturing] while also putting the most complete practices into place to ensure the highest level of protection for Maryland residents," O'Malley said.

The amount of gas in western Maryland is believed to be small compared with gas volumes in Pennsylvania and West Virginia, where fracturing already is allowed. The Marcellus and Utica shale formations have yet to be explored in Maryland, the report said.

"Best practices and rigorous monitoring, inspection, and enforcement can reduce risks to acceptable levels, but cannot completely eliminate all the risks," the report said, acknowledging that "knowledge and technology are continuously advancing." Shale gas regulations likely will need to be updated periodically to reflect newly developed best management practices.

Within Garrett County and western Allegany County, the Marcellus shale is 5,000-9000 ft deep with the Utica shale being deeper. These two shale formations in western Maryland could produce oil, wet gas, and dry gas.

The Marcellus shale is believed to have been the source rock for gas in the Oriskany sandstone, which lies closely below the Marcellus in Maryland. Both the Marcellus and Oriskany are Devonian.

Gas from the Oriskany was produced starting in the 1940s. The reservoir currently is used as underground gas storage with its headquarters near the town of Accident in Garrett County.

While the Marcellus has attracted most of the attention in Maryland, the Taylorsville basin also extends under Maryland and Virginia. In addition, the Gettysburg, Culpepern, and Delmarva basins also extend under Maryland although little is known about them.

A 2012 US Geological Survey study estimated more than 1 tcf of gas in the Taylorsville basin while the Marcellus basin was estimated at 84 tfc, USGS said. The Taylorsville, a Triassic basin, runs through much of Maryland's Charles County and goes into St. Mary's, southern Prince George's, Calvert, and Anne Arundel counties.

The Maryland League of Conservation Voters said on its web site that Shore Exploration and Production Corp. of Dallas had leases on 80,000 acres in Virginia with hopes of fracturing in the Taylorsville basin.

During the late 1980s, Shore Exploration obtained interest in leases with Exxon Corp., Texaco Inc., and Eastern Exploration Inc. Those leases were in Caroline, King and Queen, and Essex counties in Virginia.

Decades ago, Texaco and Eastern Virginia Gas Co. planned a wildcat well in Maryland less than 1 mile south of the town of Faulkner in Charles County (OGJ, Dec. 31, 1990, Newsletter).

Study wide ranging

A fact sheet posted online on the Maryland Department of the Environment (MDE) web site said an industry representative estimated that as many as 1,600 wells could be drilled on 128,000 acres in Garrett County and another 637 wells could be drilled on 51,000 acres in Allegany County.

In addition to water and air pollution, the study examined the cumulative effect of multiple wells on natural resources and the environment, including forest fragmentation.

Under the Marcellus Shale Safe Drilling Initiative, the MDE and Natural Resources Department consulted with an advisory commission in a three-stage study.

The first stage concluded with recommendations regarding the desirability of legislation to establish revenue sources, such as a state severance tax, and the desirability of legislation to establish standards of liability for any damages caused by gas exploration and production.

The second stage concluded with recommended best practices for all aspects of natural gas exploration and production in the Marcellus shale in Maryland.

The third stage concluded with a final draft report outlining recommendations regarding Marcellus shale drilling, including possible contamination of groundwater, handling and disposal of wastewater, possible consequences to the environment and natural resources, impacts to forests and important habitats, greenhouse gas emissions, and economic impact.

The final report estimated extraction over 10 years. Researchers estimate Allegany County could experience some 900 new jobs at peak extraction along with $1.8 million in tax revenues and $2.3 million in severance tax revenues.

In its peak year, Garrett County could gain an estimated 2,425 new jobs, $3.6 million in tax revenues, and $13.5 million in severance tax revenues, the report said.

Maryland state agencies and the advisory commission reviewed studies by the US Environmental Protection Agency, the US Department of Interior, the US Department of Energy, the state of New York, and the Delaware River Basin Commission, among others.

The advisory commission also reviewed results of the DOE study on the safety and environmental performance of hydraulic fracturing and DOE's advice on practices for shale extraction.

The advisory commission included representatives from the scientific community, the gas industry, business, agriculture, environmental organizations, citizens, and government.