Cumberland Times-News

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November 23, 2013

Natural gas remains good energy option, state’s petroleum group leader says

CUMBERLAND — Natural gas continues to make good economic and environmental sense, said Drew P. Cobbs, executive director of the Maryland Petroleum Council.

It causes far fewer carbon emissions than burning coal, said Cobbs, who is also the eastern regional director for the American Petroleum Institute.

Whether drilling for natural gas in Marcellus Shale will occur in Maryland remains an open question, he said. The price of natural gas will always be a factor in that decision-making process.

While some of the initial leases in Western Maryland for rights to drill for gas remain in effect, a large number have expired.

“I think that’s somewhat of a signal” about how some companies view the prospects for drilling in Maryland, Cobbs said. Many of those leases that remain in effect have been transferred from relatively small companies to large oil and gas companies, like Chevron.

Once the work of Gov. Martin O’Malley’s Marcellus Shale Safe Drilling Initiative Advisory Commission is complete, Maryland will have the strongest and likely strictist fracking laws in the country, Cobbs said.

If drilling occurred in Maryland, it would likely be near the Pennsylvania border, where infrastructure for moving the gas already exists, Cobbs said. Drilling, if allowed, would likely not occur until 2017.

New York is also holding off on Marcellus development. Gov. Andrew Cuomo has not developed a timetable, which means even greater uncertainty for the industry than exists in Maryland.

Many companies are voluntarily disclosing the chemicals used at various wells, although not the proportions because of the proprietary nature of the fracking fluids, Cobbs said. They can be found at a site called: FracFocus. More and more states are also requiring disclosure, Cobbs said.

According to the U.S. Energy Information Administration, the U.S. will need 10 percent more energy in 2040 than in 2011, and natural gas will be one of the fastest growing sources of that supply.

If drilling is allowed in Maryland, fracking operations and gas production would help state and local governments, Cobb said. The Sage Policy Group estimates Garrett County would collect $162 million in revenue from shale gas operations and Allegany County $65 million. The state of Maryland would collect $214 million, the Sage study claims.

Environmental impacts of drilling can be favorably balanced with economic impacts, Cobbs said. Pennsylvania Department of Environmental Protection records from 2008-10 show that the typical Marcellus well caused $14,000 in mainly reversible environmental impacts and $4 million in economic benefits. That analysis came from the Manhattan Institute, Cobbs said.

The move by many environmentalist to push for 80 percent of fossil fuel reserves to be kept in the ground simply isn’t practical, Cobbs said. “You can’t replace everything (with renewable energy sources).”

When pollution incidents have occurred, they’re not directly related to fracking underground, but involve spills with flowback reservoirs. Cobbs said that several studies have found no water contamination that resulted from hydraulic fracturing operations.

While it is true that many jobs associated with fracking might not be permanent, they would not be permanent after the installation of a wind turbine either. Many ancillary jobs and local income are created by gas drilling, Cobbs said.

Cobbs also made some comments on the Cove Point Export terminal proposal.

Cove Point would be the only large gas export terminal on the east coast, Cobbs said. While exporting gas from Cove Point could increase natural gas prices, he believes the impact would be relatively small. Most of the gas leaving Cove Point would likely be under contract, not sold on the open market. Cobbs said he was not speaking for the Cove Point developer, Dominion, which is not a member of his organization.

The $3.8 billion Dominion intends to invest in the project would be huge for Calvert County, Cobbs said.

Matthew Bieniek can be contacted at mbieniek@times-news.com.

 

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