Maryland Marcellus Shale Advisory Commission Holds First Meeting – Sparks Fly

sparks flyingThe kick-off meeting for Maryland Gov. Martin O’Malley’s recently appointed Marcellus Shale Advisory Commission happened yesterday at Rocky Gap State Park in western Maryland. It was the first meeting in what will be a three year process—a final report from the Commission is due in August of 2014. Such a long delay puts Maryland at the back of the pack for Marcellus shale drilling (see MDN’s comments here)—a fact that rankles landowners and energy companies interested in moving forward.

The first meeting saw a few sparks as issues of timing and taxation came to the forefront:

Energy industry representatives and skeptics clashed Thursday over taxation issues and a three-year timeline for studying the risks and benefits of natural-gas drilling in Maryland’s section of the Marcellus Shale.

With lucrative production from Marcellus wells under way in Pennsylvania and West Virginia, Maryland should expedite its rule-making, said Drew Cobbs, executive director of the Maryland Petroleum Council.

“We don’t think it needs to be as drawn-out as laid out in the executive order,” Cobbs told The Associated Press.

He and a Chevron Corp. official spoke to a reporter outside the first meeting of a panel appointed by Gov. Martin O’Malley to recommend drilling regulations. The committee met at Rocky Gap State Park in Maryland’s mountainous western panhandle, where the shale gas reserves are concentrated. The group’s final report is due in August 2014.

Chevron government affairs adviser Jeffrey Kupfer, who sits on the panel, concurred with Cobbs: “I think we can answer a lot of these questions much earlier than that, especially in light of all the other work going on around the country.”

Cobbs said the industry would consider funding an environmental baseline study in return for an accelerated timeline. Committee Chairman David Vanko, a Towson University geologist, said such a study is “imperative” to provide a benchmark against which any environmental consequences of drilling could be measured.

Panel member state Delegate Heather Mizeur, D-Montgomery, who led a failed effort in this year’s General Assembly to restrict Marcellus drilling, proposed an extraction tax of up to 10 percent. That would put Maryland second only to Alaska in taxes levied on gas production.

Kupfer asked what other taxes already in place would apply to natural gas extraction.

“I think we need to concentrate on what’s an appropriate extraction tax,” he told the committee.

Cobbs said later that too high an extraction tax could drive drilling companies to other states and deprive Maryland of the economic benefits of drilling.

*Baltimore The Daily Record/AP (Aug 4, 2011) – Gas drillers, skeptics clash as Maryland board meets