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Environmental safeguards put brakes on boom

With natural gas prices soaring, wildcatters are drilling new wells throughout Appalachia -- but not in Maryland

By Tom Pelton

sun reporter

September 27, 2005

DELMONT, Pa.

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David Hill's forehead is gashed, his fingernails are caked with grease, the outline of a Copenhagen tobacco tin is traced in filth on the pocket of his mud-drenched T-shirt - and he couldn't be happier, because he is drilling another well.

"It's a real boom time for natural gas drilling, and I'm working rain, shine, heat, cold, 24 hours a day, year-round," said Hill, owner of a 50-foot-tall rig that is punching a pipe deep into rolling farmland east of Pittsburgh for the Penneco Oil Co.

With natural gas prices soaring to record levels, wildcatters are drilling new wells throughout the Appalachian region. But the boom is bypassing Maryland, in part because of its strict environmental regulations and a difficult permitting process, according to industry representatives and state officials.

Pennsylvania and West Virginia have the same natural-gas-bearing geological formation as Western Maryland. But Pennsylvania and West Virginia have nearly 100,000 active gas wells, and drilling permits are up 40 percent over the past two years in both states.

Maryland has eight natural gas wells and no drilling in a decade, according to the Maryland Department of the Environment.

One reason drilling companies stay out of Maryland is that many of the potential natural gas deposits lie beneath state lands, which are de facto no-drill zones.

"Most companies wouldn't spend the time and money trying to drill in Maryland because the permitting process there is so long and arduous," said Terry Jacobs, Hill's boss and owner of Penneco.

Maryland officials do not dispute his assessment - although they describe their approach as environmentally protective rather than obstructionist. And some environmentalists are happy that crews aren't tearing up Maryland's scenic western mountains with bulldozers and drilling rigs.

"Instead of being hostile to business, we are hostile to environmental degradation, and this is a good thing," said Betsy Johnson, chairman of the Sierra Club's Maryland chapter. "This is one of the reasons that Maryland is the beautiful state that it is. We care about the environment here."

Numbers tell the tale of the drilling industry's avoidance of Maryland. The last of the eight natural gas wells in the state was drilled on a farm in Allegany County in 1995.

To the north, Pennsylvania has 45,000 natural gas wells and approved 3,428 new drilling permits last year, a 40 percent rise over 2002. To the south, West Virginia has about 50,000 gas wells, with 2,305 new drilling permits last year, also a 40 percent increase from 2002.

Ohio has 33,828 wells; New York has 6,587; Kentucky has 17,779 wells, and Virginia has at least 3,870, with all these states experiencing rising numbers, state agencies report.

"We've seen an ungodly increase in drilling," said Al Blankenship, manager of permitting for the West Virginia Department of Environmental Protection. "It's the rising price of gas, which is based on rising demand.

"As the price of gas goes up," he said, "the drillers are willing to take more risks and try digging in areas they wouldn't consider in the past."

In Pennsylvania, gas companies are gambling on deeper, less-productive sandstone deposits on the outskirts of Philadelphia and in areas south of Pittsburgh because the high price of gas makes even modest production lucrative, said Tom Rathbun, a spokesman for the Pennsylvania Department of Environmental Protection.

Nationally, the price of natural gas has doubled over the past year to more than $11 per thousand cubic feet. Further increases are expected this winter as a result of Hurricanes Katrina and Rita. Since the first storm struck, 156 billion cubic feet of natural gas production in the Gulf of Mexico was lost, the U.S. Minerals Management Service said Sunday.

Drilling for natural gas is at a 19-year high across the United States, with the Rocky Mountain states the busiest area, said Mark Stultz, spokesman for the Natural Gas Supply Association, a trade group. "We are running out of gas that we can access easily," said Stultz, "so we are having to kick harder to get the gas we need."

The energy bill signed into law last month by President Bush encourages more drilling. The legislation exempts from the Safe Drinking Water Act companies that inject water, sand, liquid nitrogen and chemical compounds at high pressure into the earth to crack the rock and release natural gas.

Republicans in Congress, led by Rep. Richard W. Pombo of California, chairman of the House Resources Committee, are proposing legislation that would allow states such as Maryland to repeal federal moratoriums on offshore drilling along the Atlantic and California coasts.

Ed Larrimore, administrator of the mining program at the Maryland Department of the Environment, said he has heard the complaints that the state is hostile to the industry. There is less drilling here, in part, because much of the gas lies under state forests and wildlife management areas in Western Maryland, he said.

"Maryland has been more protective of its public lands than other states," said Larrimore. "Pennsylvania and West Virginia have thousands of wells, and they are more used to them."

Maryland's approval process is more involved than Pennsylvania's or West Virginia's, requiring three permits for each well, approval from the governor to drill on public land, a 1,000-foot setback from most adjacent properties and the consent of property owners who can block access to drillers with mineral rights underneath their land.

In response to exploration by oil and gas companies around the Chesapeake Bay, Maryland passed a ban in 1988 on drilling in the bay, its coastal areas or wetlands. The law also required regulations to be issued before any leasing of state land for drilling, but in the 17 years since, the state has never approved such rules, said Arnold "Butch" Norden, a planner for state Department of Natural Resources.

"It made things a bit difficult" for drilling, said Norden. "The state meant to protect natural resources."

Another reason there is less drilling in Maryland, said Chris Swezey, research geologist with the U.S. Geological Survey, is that parts of the Oriskany sandstone formation, which contains natural gas, were heavily drilled in the 1950s and 1960s in Garrett County, then abandoned because they were largely tapped out. But, Swezey said, "There are several [natural gas] fields through Western Maryland, and there could be more gas there still to find."

The Oriskany sandstone formation is named after the village in upstate New York where it was first identified, and it extends through much of the Appalachian Mountains region south to eastern Kentucky. In the pores between the grains of sand is natural gas, which started to form about 380 million years ago when algae and aquatic plants died and were buried in mud. The gas produced by the decay of this vegetable matter is trapped in pockets by a layer of dense shale about 7,000 to 10,000 feet underground.

The last well drilled through this formation in Maryland was 10 years ago, not far from Cumberland. The company that owns that well, now called Oil & Gas Management of Pennsylvania, has fought a decade-long, fruitless battle to drill a second well in the state-owned Dans Mountain Wildlife Management Area, said Vice President Cathy A. Kirsch.

Kirsch's failed struggle to obtain a lease from the state has attracted the sympathy of the House minority leader, Del. George C. Edwards, a Garrett County Republican.

"Gov. [Parris N.] Glendening's administration was against harvesting our energy resources, either by mining coal or drilling gas," said Edwards. "But in my opinion, we need to produce our energy here in America, and if we can drill gas here in Western Maryland, that would be good for the country and the state."

But neither Edwards nor the Ehrlich administration has proposed changes to make it easier to drill in Maryland, according to state officials. This frustrates Kirsch.

"Maryland is always so afraid of the environment and public opinion, they just can't move forward to allow drilling," she said.

tom.pelton@baltsun.com