Capping more than three years of study, the O'Malley administration declared Tuesday that hydraulic fracturing for natural gas can be done safely in Western Maryland, but only after regulations are tightened to reduce air and water pollution and protect residents from well contamination, noise and other disruptions associated with an anticipated drilling boom.
The state Departments of Environment and Natural Resources released a draft final report proposing new rules for "fracking," as the drilling technique is often called, and recommending legislation to stiffen penalties for spills and to levy a tax on any gas extracted to address impacts on affected communities.
Gov. Martin O'Malley, who had effectively blocked fracking in Western Maryland by ordering a study of its impacts, said in a statement that the report sets a "gold standard" for balancing the risks and rewards of the controversial drilling technique. Fracking has reaped a gas bonanza nationwide but also stirred controversy over pollution and health issues.
With only weeks to go in his term, the Democratic governor made clear he intends to propose the most stringent fracking safeguards in the nation, putting his Republican successor on the spot over whether to follow through.
"We're committed to ensuring that Marylanders have access to the economic opportunities associated with fracking," O'Malley said, "while also putting the most complete practices into place to ensure the highest level of protection for Maryland residents."
Gov.-elect Larry Hogan said Tuesday he'd review the proposed regulations but repeated his campaign position that fracking has been studied enough and that it's now time to make a decision.
Maryland has a small corner of the gas-rich Marcellus shale formation that stretches from the Carolinas to New York, with deposits in Garrett and western Allegany counties.
The administration estimates that drilling and extraction could support as many as 3,400 jobs and generate millions in tax revenues. But it also cautions that those benefits are likely to last only a few years, and that energy development could hurt tourism and outdoor recreation, two other industries on which the region relies.
The administration concludes there is "no doubt" that fracking has the potential to harm public health, the environment and natural resources. But if strict safeguards are imposed and enforced, it says, problems "can be managed to an acceptable level."
If the recommended rules are adopted, Environment Secretary Robert M. Summers said, Maryland will be the first state to require gas companies to submit comprehensive drilling plans.
With some research suggesting that methane leaks from increased gas extraction could worsen climate change, the administration also calls for tight controls on possible loss of the gas. Companies would be required to offset any uncontrolled leaks by making other climate pollution reductions.
Drew Cobbs, executive director of the Maryland Petroleum Council, suggested that if Maryland's regulations are much more stringent than those of neighboring states, it could discourage gas companies from drilling in Garrett or Allegany counties.
"I hope that this does not become a race to the bottom," Summers said. "But Maryland has set a high bar to protect our natural resources and public health."
He suggested that "responsible" companies would welcome the added safeguards, and that neighboring states might be moved to match Maryland's regulations.
Summers said the regulations would be proposed by mid-December, but they wouldn't be finalized before O'Malley leaves office Jan. 21. It would be up to Hogan to decide whether to adopt, weaken or cancel them.
"What appears to be happening is they're … putting a stake in the ground," said David O'Leary, conservation chair for the Maryland Sierra Club.
The report drew mixed reactions from environmentalists. The Sierra Club and the Chesapeake Bay Foundation praised the administration's conclusions. Others, such as Chesapeake Climate Action Network and Food & Water Watch, said the potential benefits of fracking aren't worth the risks.
Del. Heather R. Mizeur, a lame-duck Montgomery County Democrat who has served on the governor's fracking advisory commission the past three years, said that "the only truly safe way to protect the environment, public health and the economy is to keep the gas in the ground."
But state Sen. George C. Edwards, a Garrett County Republican who also sat on the advisory panel, said he thinks some of the proposed rules are too strict. He urged the administration not to rush to get out regulations, but to leave it to Hogan and the next General Assembly to make the final decision.
Baltimore Sun reporter Michael Dresser contributed to this article.