HARRISBURG - The state's top environmental official yesterday proposed increasing natural gas drilling-permit fees and doubling the number of staff handling permit reviews to deal with Pennsylvania's booming natural gas drilling industry.
John Hanger, acting secretary of the Department of Environmental Protection, told lawmakers that his existing staff cannot handle the dramatic expansion of drilling in the rich gas fields that lie beneath most of Pennsylvania.
Hanger, testifying before the House Environmental Resources and Energy Committee, said the agency, seeking to balance environmental concerns with economic opportunity, needs additional employees to conduct permit reviews and well-site inspections.
To pay for 60 new staffers, Hanger wants to increase the $100 per-well fee, a figure set in the 1980s when gas production was low. Hanger said the agency had not yet determined the amount of the increase but that it would be based on budget needs.
Gas industry representatives told the committee that the backlog, along with additional permits DEP has imposed on operations in the Marcellus Shale formation, are slowing the process and creating a climate of uncertainty.
"It's imperative that we find ways to expedite permitting if we are to fully enjoy the rich economic benefits" of the formation," said Stephen Rhodes, president of the Pennsylvania Oil and Gas Association.
The House committee hearing comes as drilling companies are fanning out across the state, staking claim to gas-leasing rights and firing up drilling operations. The wells could bring a windfall for landowners and communities, but the prospect has raised alarm among environmentalists fearful that the drilling poses a threat to water resources and natural lands.
The shale formation sits from 5,000 to 8,000 feet below the ground across roughly two-thirds of the state and likely holds trillions of cubic feet of natural gas. Improvements in technology and the rising price of natural gas have made it more feasible for companies to invest in exploration and drilling operations.
A Pennsylvania State University study estimates that the economic value of the formation is $1 trillion and that, for every $1 billion in royalties paid to Pennsylvania residents, nearly 24,000 jobs will be created over the next three years.
More than 500 permits have been approved for drilling operations in the Marcellus formation since 2005, half of them issued this year.
Chief among environmentalists' concerns is the protection of water resources. The deep-well drilling consumes far more water than shallow-well drilling, and could strain streams and drinking-water wells.
In addition, environmentalists say, the sites produce contaminated water that, if not treated properly, could endanger waterways.
Jeff Schmidt, executive director of the Sierra Club's Pennsylvania chapter, said chemicals added in the extraction process, combined with those that naturally occur, could create a "toxic soup" that municipal wastewater plants are not designed to handle.
Rhodes argued that the environmental impact to land and water resources would be minimal. He said the state has an abundance of water and that any wastewater would be either contained underground or treated before being released. He and other gas executives defended the environmental record in an industry that dates back 100 years.
In recent weeks the state assessed nearly $400,000 in fines against drillers in two counties for failing to obtain permits to withdraw water and start well construction.