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PA Marcellus Shale Advisory Commission Issues Final Recommendations for Natural Gas Industry

In a move that is expected to influence future laws and regulations applicable to the natural gas industry in Pennsylvania, today Governor Corbett's Marcellus Shale Advisory Commission issued 96 policy recommendations as part of its final report to the Governor and General Assembly. With the issuance of this final report, we anticipate a number of efforts in Harrisburg during the upcoming months designed to transform the current legal and regulatory approach towards Marcellus Shale development in Pennsylvania, particularly with respect to environmental protection.

Governor Corbett formed his Advisory Commission back in March and gave them 120 days to issue the report that was released today. The 30 member body, led by Lt. Governor Jim Cawley, divided itself into four working groups: Infrastructure; Local Impact and Emergency Response; Economic and Workforce Development; and Public Health, Safety and Environmental Protection. These work groups met separately during the 120 day term and ultimately produced the recommendations that were voted upon by the full Commission at their last meeting on July 15.

Of the 96 recommendations approved by the full Commission, the two that have received the most attention so far are the endorsement of a local impact fee and forced pooling. However, the largest number of recommendations - 43 - emerged from the Public Health, Safety and Environmental Protection work group. Some of the more notable recommendations included:

• Doubling fines for environmental violations and allowing PADEP to assess these fines without Environmental Hearing Board involvement;
• Urging the Environmental Quality Board to develop regulations that require an evaluation of natural resource impacts as part of the well permitting process;
• Requiring tracking of all wastewater from generation through treatment and disposal;
• Requesting that DEP evaluate its regulations to determine what, if any, obstacles exist or changes that can be made to facilitate recycling of flowback and produced water;
• Asking DEP, DCNR and industry to continually review BMPs used during well construction and operation, and consider incorporating these practices into regulations;
• Encouraging the Department of Health to conduct a number of health-based population studies;
• Increasing setbacks from public water sources;
• Enhancing and/or developing databases related to high value ecological areas and rare/threatened/endangered species; and
• Creating an environmental checklist for use as part of the drilling permit issuance process.

For the most part, the recommendations in the final report are high level concepts that leave implementation to the General Assembly and applicable state agencies. And as was said often at the July 15 meeting "the devil is in the details." To that end, we expect legislators and regulators to take a number of the recommendations and run with them in the near future in an effort to revise, or in some cases overhaul, the Commonwealth's environmental protection laws and regulations that apply to the natural gas industry in Pennsylvania. Accordingly, the next few months could results in a series of new, complex environmental compliance issues that the natural gas industry - and PADEP - will be addressing for the first time.

MGKF attorneys have attended each of the Marcellus Shale Advisory Commission meetings, as well as each of the Public Health, Safety and Environmental Protection work group sessions. If you are interested in additional information about the final report, the process that led to the final recommendations, or additional information about the potential impact of the Commission's recommendations, please contact Todd D. Kantorczyk or any other member of the MGKF Marcellus Shale team.