Cumberland Times-News

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November 30, 2012

Shale commission holds first vote

Group agrees to safeguards that would pay for drilling problems

FINZEL — Fifteen months after its creation and during its 11th meeting, Maryland’s Marcellus Shale Safe Drilling Initiative Advisory Commission held its first formal vote, agreeing unanimously to endorse financial safeguards that would pay for drilling-related problems.

Gathering Friday at the Eastern Garrett Volunteer Fire Department for the second time since being created, the commission’s endorsements are intended to guide legislation that would be introduced into the upcoming session of the Maryland General Assembly.

The group agreed that:

• A minimum amount should be established for a performance bond that would be required of drillers attempting to extract natural gas by what is known as fracking.

• Drilling companies that have sufficient assets and financial stability should be allowed to self-insure.

• There should be a mechanism to verify that funds will be available to address environmental cleanups that are not covered by comprehensive liability insurance.

• The Maryland Department of the Environment should be allowed to periodically adjust required bond amounts based upon changing costs of reclamation.

Brigid Kenney, an MDE adviser to the commission, recommended that the commission provide specific legislative language for potential bills, but that concept was generally rejected by the members.

“Our intent is to be general, to identify broad areas for legislation,” said Harry Weiss, an attorney with Ballard Spahr.

Jeffrey Kupfer, senior adviser with Chevron Government Affairs, concurred. “We need to agree on principles rather than on specific wording,” he said.

Allegany County Commissioner Bill Valentine, as well, said, “We should support ideas.”

State Sen. George Edwards suggested that financial bonds required of drillers mimic those for coal mining in that they are based upon some common denominator such as a cost per acre.

“So everybody will be on the same song sheet,” Edwards said.

The commission members also spoke about the potential creation of a Surface Owners’ Protection Act.

Edwards suggested that money needs to be pooled to protect the owners of the surface acreage beneath which the drilling and extraction of natural gas will take place.

“We need that to take care of the problem no matter who is liable,” Edwards said. “Landowners don’t have the money to sue these large companies.”

Weiss said Maryland does not have a long and established history of court cases involving the rights of surface owners versus the rights of subsurface or mineral owners, but results have usually favored the subsurface owners.

Valentine said he believes that liability for damages from drilling should be upon the drilling companies rather than upon small subcontractors.

Senate and House sponsors in Annapolis will need to be found to introduce any legislation that results from the commission’s research and discussions.

The group will next meet Jan. 27 in Annapolis.

The commission is to issue a report to the governor in 2014. Until then, no permits will be approved for Marcellus shale drilling in Maryland.

Contact Michael A. Sawyers at msawyers@times-news.com.

 

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