Gov. Wolf bans new leases for drilling on state lands

Gov. Tom Wolf banned new oil and gas leases in state parks and forests on Thursday, officially ending plans by the Legislature and the previous administration to raise millions of dollars for the budget this fiscal year through new drilling deals.

In signing the executive order at a ceremony at Benjamin Rush State Park in Philadelphia, Mr. Wolf said natural gas development is a vital element of the state’s economy, but he made an economic case for preserving the state’s public natural resources as well.

“This is about striking the right balance,” he said. “Our state parks and forests are unique assets that should be preserved, protected and utilized by our residents for recreational purposes.”

Mr. Wolf’s order is similar to a ban on new oil and gas leases in state parks and forests that Democratic former Gov. Ed Rendell put in place in October 2010 after the Department of Conservation and Natural Resources issued leases for Marcellus Shale gas development on nearly 140,000 acres of state forests during his tenure.

Former Republican Gov. Tom Corbett replaced that order in 2014 with one that allowed companies to extract gas beneath parks and forests from wells drilled on adjacent properties as long as the activity didn’t create new long-term surface disturbances on conservation lands.

The current state budget anticipates raising $95 million through such leases, but an environmental group’s legal challenge to the way the state spends its drilling revenue held up new leases and none were signed before Mr. Wolf took office this month.

Mr. Wolf’s action will not halt development that is already taking place on state lands. Roughly 700,000 acres of state forests are available for natural gas development, either through state leases or private leases where the state does not own the oil and gas rights below the surface.

DCNR has approved more than 1,000 Marcellus Shale gas wells on forest lands, and about 600 of them have been drilled on 230 well pads. In a monitoring report last year, the agency said it expects roughly 3,000 gas wells will be drilled to develop the acreage the state has already leased.

The deals have been lucrative, and the state has relied on them in recent years to balance the budget and fund DCNR’s operations. Pennsylvania collected $690 million through leases and royalties from wells on state lands between 2008 and 2013.

Natural gas industry trade groups criticized the governor’s action on Thursday, saying the state will miss out on revenue and economic development it needs.

Louis D’Amico, executive director of the Pennsylvania Independent Oil & Gas Association, called the order “a lose-lose for Pennsylvania’s taxpayers and energy consumers.”

“This decision will eliminate a long-term financial windfall for the Commonwealth that has already returned more than $700 million in the past seven years at a time when Pennsylvania is desperate for new sources of revenue,” he said.

Environmental advocates said they are happy with the executive order and encouraged that Mr. Wolf made it a priority in his new administration.

“It sends a very strong signal that the things Gov. Wolf talked about during his campaign, he’s following through with them,” said John Norbeck, acting president and CEO of the environmental organization PennFuture.

Environmental advocates also said the order is an accurate expression of DCNR’s reservations about further leasing.

The Commonwealth Court ruled this month that DCNR, not the governor, has the ultimate authority for deciding whether to issue oil and gas leases. The executive order Mr. Wolf signed Thursday seems designed to accommodate that ruling: it says the ban is “consistent with recommendations” made by the acting DCNR secretary and is “subject to future advice and recommendations made by DCNR.”

Jordan Yeager, a Doylestown attorney who is representing the Delaware Riverkeeper Network in a challenge to the leasing plan proposed by Mr. Corbett, said the case that inspired the recent Commonwealth Court ruling also revealed the pressure that the executive and legislative branches have put on DCNR to sign leases in the recent past.

“There is a difference between what DCNR recommends and what DCNR feels like it has no choice but to go along with,” he said. “I think the Wolf administration is apparently following what DCNR recommends.”

Mr. Norbeck, a former director of the state park system at DCNR, agreed, saying that recent monitoring reports have indicated that DCNR’s professional staff “have great concerns about doing any additional leasing on public lands.”

“I think the staff in general is going to be pretty darned pleased with the executive order,” he said.

Acting DCNR Secretary Cindy Dunn has encouraged Mr. Wolf’s view that conservation can promote economic development.

Hours before the executive order was announced on Wednesday, she told an advisory council in Harrisburg that the state’s natural lands can help create new jobs, and she focused on the job-creation potential of the forest products and tourism industries.

She did not mention oil and gas development.

“It’s becoming increasingly clear that the outdoor product in Pennsylvania is the product to market,” she said.

“We have states that surround us with miles and miles of sameness and suburbia and development. What we have to offer is mountains, rivers, parks, forests, trails.”

Laura Legere:

First Published January 29, 2015 12:34 PM

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