Environmentalists fight natural-gas leasing in Pa. forests

A buried treasure of natural gas under Pennsylvania's forests and hills has a lot of people hoping for a big payoff: rural landowners, big energy companies and, now, the state's politicians.

The state's fragile budget deal rests in part on a plan to raise more than $200 million over two years by opening up more state forest land to gas drilling.

Now, environmental groups and some Democratic lawmakers are furiously trying to roll back the agreement, saying it would open up too much public land for drilling far too quickly - squandering resources and potentially harming the environment.

"It's wrong to rape the state forest system to provide for one or two years' worth of revenue to fund the budget," said Rep. David K. Levdansky (D., Allegheny), who is trying to rally Democratic opposition to the gas leases in the House.

Gov. Rendell, acknowledging that the fight was threatening the budget deal, said yesterday that he was sending his top two environmental officials to lobby lawmakers.

He said the new leases would not damage the state forests. The Department of Conservation and Natural Resources will be careful to steer drilling companies to the areas with the biggest gas reserves, he said, producing the most revenue for the least environmental impact.

"Potential leaders will understand it's not exploration," he said at a news briefing. "They will know what's under there."

A giant reserve of natural gas is trapped inside the Marcellus Shale rock formation - a layer of rock 365 million years old stretching underneath 54 of the state's 67 counties. Worth $1 trillion, just 10 percent of it could supply the entire United States for two years, by some estimates.

Pennsylvania has long had natural gas wells, but recent advances in drilling technology have unlocked the potential of the Marcellus Shale reserves and drawn a rush of drilling companies to the state.

The state's politicians are scrapping over how best to grab some of that revenue in a brutally tough budget year.

Last year, the department leased 74,000 acres of state land in Lycoming and Tioga Counties - collecting a surprising $166 million.

Earlier this year, Rendell was pushing for a tax on gas extracted from wells, but then abandoned it in the face of opposition from the industry and Senate Republicans. Rendell said he came to agree with the argument that it would be wrong to impose a tax now, while Pennsylvania's natural gas industry is still young.

The industry spent more than $1 million on lobbying the legislature in just the first half of this year, state records show.

"That's a lot of shrimp cocktails and dinners," Levdansky said. "This is like full employment for the lobbying community."

Yesterday afternoon in the Democratic-controlled House, a committee approved a tax package that would establish an extraction tax on natural gas.

The plan bucks a bipartisan agreement struck two weeks ago by legislative leaders and Rendell. The House is expected to vote on the measure today.

But Senate Majority Leader Dominic Pileggi (R., Delaware) yesterday said that it had no chance of passing the Senate.

Instead of the tax, Rendell proposes to expand leases on state-owned forests.

Budget projections call for $60 million next year and $180 million the year after that.

That's far too aggressive, opponents say. They worry that the state might be forced to compromise its environmental protections to meet the revenue goals.

"They should not be chasing the dollars, they should be doing what they have always done - managing the forests for multiple uses, in the public interest," said Jan Jarrett, president of PennFuture, an environmental advocacy group.

She and other advocates also oppose a plan to move the oil and gas revenues into the general budget. Until now, that money has been set aside for state parks and conservation projects.

Inside the natural resources department, staffers are unhappy with the expanded drilling plans, said one former high-ranking department official.

"If left to their own devices, I seriously doubt they would lease another acre of new land until they see how the existing ones are playing out and what problems they are creating," said Rick Carlson, the former policy director.

Chris Novak, the department's communications director, said the state would not abandon its safeguards to increase revenues. The state does not permit drilling in wilderness areas or other sensitive sites.

"It's a balance," she said.

Stephen Rhoads, the industry's chief lobbyist in Harrisburg, said the idea that the new leases will somehow ruin the forests is "nonsense." The department has been leasing land in state forests since the Depression.

The department has not decided where or how many acres to lease next year, but the best estimates are around 80,000, he said - not a huge amount.

"It isn't as if they are going into this willy-nilly," said Rhoads, president of the Pennsylvania Oil and Gas Association.

When it comes to natural gas operations, state forests are far from virgin territory.

Natural gas leases cover more than half of the 1.5 million acres of state forest land in the Marcellus Shale area. Thus far, the natural resources department has approved 147 well sites; 12 are being drilled and two are completed.

The natural gas is extracted from the shale by a process called fracking. Under high pressure, a mixture of water, sand, and chemicals is pumped deep underground to break apart the rock formation and release the gas.

Last week, the state Department of Environmental Protection charged Cabot Oil & Gas with five violations after nearly 8,000 gallons of the fracking solution spilled in Susquehanna County. Some entered a nearby creek.

Rhoads said the Cabot problems were caused by "some bad housekeeping" on the site, not with any problems in the technology.

"We've been fracking wells in Pennsylvania since the 1940s," he said. "We have a very very fine track record."