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Texaco's bid for exploratory well nears final hurdle Public hearing scheduled. Bay exploration is still opposed by environmentalists.

THE BALTIMORE EVENING SUN

Texaco Inc.'s bid to drill for gas or oil in Southern Maryland is nearing its final hurdle, though environmentalists still warn that the state should not open the door to energy exploration anywhere near Chesapeake Bay.

The oil company's application for a permit to sink a 10,000-foot exploratory well near Faulkner in Charles County is "reasonably complete," said C. Edmon Larrimore, chief of minerals, oil and gas for Maryland's Department of Natural Resources.

A public hearing on the application will be scheduled in the next couple of weeks, Larrimore said, and DNR expects to decide within two to three months whether to issue the permit.

Texaco spokeswoman Deborah Alford says the company hopes to begin drilling by late fall or winter. She said company officials do not want to have to wait until late winter or early spring to "spud" or start the well, since heavy rains then could make work more difficult.

The $4 million project already has won a special zoning exception from Charles County, as well as various other local, state and federal approvals. The drilling permit "will be the last step for us," said Alford.

Meanwhile, the company wants to drill three more wells across the Potomac River in Virginia, not far from where the company drilled and capped a well in 1989. Texaco has applied for permits to drill in King George and Westmoreland counties, Alford said, and intends to apply for a third site in Essex County.

The Chesapeake Bay Foundation argues that both states should reject Texaco's applications. The Annapolis-based environmental group, which claims 63,000 members in Maryland and Virginia, warns that the multimillion-dollar interstate effort to restore the bay could be undermined should the drillers strike oil or gas.

"We've come too far to risk all that we've done for a very short-term gain for a very small segment of the population," said William C. Baker, the foundation's president.

Texaco says its proposed well in Maryland poses no threat to the bay or the rest of the state's natural resources.

Company officials say they expect to find gas, if anything at all, in the deep underground rock formation known as the Taylorsville basin, which has been the focus of oil company interest since 1988. The basin stretches northeast from central Virginia through Southern Maryland and under the bay to the Eastern Shore.

The four-acre Charles County well site, in a farm field just west of U.S. 301, is about 1 1/2 miles from the Potomac River and at least 1,000 feet from one of its tributaries, Popes Creek.

Texaco says in its application that it would use non-toxic drilling "muds" to lubricate the well, and that all liquids would be stored in steel tanks and trucked off site for disposal in a licensed landfill. A levee would be built around the drilling site to catch rainfall runoff and any possible spills.

Similar precautions were taken with Texaco's exploratory well sunk two years ago just across the Potomac in Westmoreland County, Va.

Bay foundation officials acknowledge that the Virginia well was drilled without incident, and they say that gas poses fewer environmental threats than does oil, with its risk of spillage into streams and the bay.

But Baker questioned why Texaco will not promise to cap its wells if oil is found.

"If the industry was serious, if as they say everything . . . points to natural gas, they ought to be willing to say they wouldn't develop an oil well if it did come up with oil," he said.

"We don't want them to have the opportunity to find out [if] there really is oil under there," explained Michael Hirshfield, the bTC foundation's senior science adviser, "because we think if there is significant oil brought up by this well, they'll drill it, they'll develop it. They'll be back, and the next round of production wells will be producing a heckuva lot more waste and producing significant risks of spillage."

Texaco spokeswoman Alford says such fears are unfounded. Chances of any given well finding anything marketable are only 1 in 25, she said, and the results of the company's first well in Virginia indicate that the basin holds gas, not oil.

"That's our best scientific judgment at this moment," she said. But she refused to pledge that Texaco would not seek to exploit any oil that might be found, saying, "I think it would be foolish to make a statement that closed out any possibility."

Should oil be found, Alford noted, the company has promised not to transport it by tanker, in recognition of environmentalists' concerns about the threat of oil spills on the bay.

Texaco has pledged to abide by or exceed new Maryland drilling regulations, which have been proposed but not yet finalized.

The company has submitted a $100,000 bond to cover the cost of capping the well and reclaiming the site should Texaco fail to do so properly.

State regulations also require applicants to prepare contingency plans for dealing with well blowouts and fires, and they must have insurance against an accident, with coverage of up to $1 million for personal injury and $5 million for property damage.

Texaco spokeswoman Alford said Maryland's proposed rules are stiffer in some respects than Virginia's, but she said there were no requirements that would preclude drilling. The company has asked for relaxation of a rule requiring abandoned well shafts to be filled with cement, she said.

Virginia, meanwhile, has imposed a two-year ban on "slant" drilling -- that is, drilling on land formations that slant under the bay or its tributaries -- while it studies regulations restricting energy exploration near the shoreline.

The bay foundation contends that Maryland's regulations are not tough enough. The proposed drilling rules only say that DNR has the option to deny a permit if it determines that a well poses a serious threat to public safety or the environment. DNR should be required to deny permits in such cases, Hirshfield contends.

Maryland also has yet to finalize regulations restricting drilling within the 1,000-foot "critical areas" around the bay, CBF's Baker said. He argued that the state should bar any oil or gas exploration in the area.

But while environmentalists say energy exploration is incompatible with protecting the bay, state law does not forbid drilling on land in the bay drainage area. It does bar drilling over the bay and restricts it in the 1,000-foot "critical area" along the shoreline.

"The General Assembly has recognized that these are important resources that should be capable of being developed," said Robert D. Miller, DNR's deputy water resources director. "The law says it's in the public interest . . . to promote the development of natural resources and oil and gas."

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