The Department of Conservation and Natural Resources this week announced it intends to accept competitive bids for natural gas leases covering 75,000 acres on state forestlands at an informational meeting of the Senate Environmental Resources and Energy Committee

DCNR took the action to respond to the increased interest in the Marcellus Shale formation and the natural gas reserves many believe it contains.

"This approach on shallow gas drilling is a way for DCNR to cautiously and responsibly balance its legislative requirement to provide for the economic use of mineral resources while sustaining those forests and their ecological, recreational and cultural benefits for present and future Pennsylvanians," Secretary Michael DiBerardinis told the Committee. "Oil and gas extraction has been part of our state forest plan for more than six decades and it will continue to help provide clean energy and economic returns that we will invest in conservation initiatives."

The department's position would allow limited shallow drilling if gas is found during the development of deeper gas fields, or on a case-by-case basis.

Since 2003, the department has met with legislators, industry representatives, environmental groups, academia and forest users to craft changes to a gas development policy that balances needs and interests, is responsive to energy concerns, and adheres to guidelines necessary to maintain its certification as "well-managed" by the independent, third-party Forest Stewardship Council to protect the forests for future generations.

"New provisions in the gas lease provide more specific protection for state parks, natural areas and wild areas; limit the use of waivers and provide additional oversight; enhance protection of dark sky areas; and expand buffers around environmentally sensitive areas," Secretary DiBerardinis said. "We are continuing this historic use of the state forest, and doing it better."

A comprehensive environmental review is conducted as part of a lease sale planning process. Additional environmental reviews are done at the time of well permitting.

Dr. James R. Grace, Deputy Secretary for Parks and Forestry, gave the Committee a briefing on DCNR’s oil and gas leasing program.

The Marcellus Shale formation is a deep resource thought to contain large quantities of natural gas, stretching from New York through Pennsylvania and into West Virginia.

In Pennsylvania, the formation reaches the northern tier as far east as the Scranton area and as far south and west as Somerset County and the Pittsburgh area. New technology has made it possible to recover the hard-to-reach fuel.

Lease sales are developed by first receiving nominations for the acreage from gas companies. Then, gas companies are required to competitively bid on the offered state forestlands. Highest responsible bidders may then be issued oil and gas lease contracts. DCNR retains ownership of the land.

There has been gas drilling activity on state forestlands since 1947. Currently, about 207,000 acres of the 2.1-million-acre state forest are being leased for gas production, with about 650 wells in place.

Sen. Mary Jo White (R-Venango), Majority Chair of the Committee, introduced Senate Bill 1127 that would require the Department of Conservation and Natural Resources to hold a competitive public auction for oil and gas resources and take other steps to develop domestic energy resources.

Rep. Hutchinson (R-Venango), Minority Chair of the House Environmental Resources and Energy Committee, introduced similar legislation in the House— Special Session House Bill 32.

Sen. Ray Musto (D-Luzerne) serves as Minority Chair of the Senate Environmental Resources and Energy Committee.

NewsClips: PA to Let Gas Drilling to Resume in State Forests

State to Open More Forest Land for Well Drilling

Gas Drilling to Resume on State Forests

PA Atop Natural Gas Mother Lode

Link: Joint Committee Releases Report on Oil and Gas Leasing Operations

4/4/2008