Natural gas drillers looking to engage in Marcellus Shale exploration and development in northeastern Pennsylvania (mostly Wayne and Pike counties) are going to have to wait a little longer before they can start putting in their applications with the Delaware River Basin Commission.  That's because the DRBC announced in a press release that it is rescheduling its previously announced special meeting to consider the Commission's draft Marcellus regulations.  The meeting had been scheduled for October 21, 2011 but will now take place on November 21, 2011.  The Commission's press release says the additional time is needed to complete the ongoing process and allow for an opportunity to publish the modified draft regulations on the DRBC website two weeks in advance of the expected vote by the commissioners.  The web posting is planned for November 7 and will be for informational purposes only, since comments will not be accepted.   

What's really going on here?  Behind the scenes there is a significant states' rights issue that directly impacts the Commonwealth's sovereignty and its authority to authorize and regulate natural gas drilling.  Fifty years ago, the Commonwealth entered into a Compact with other states and the federal government to protect the water resources of the Delaware River Basin.  Since that time there has been a division of authority in which the DRBC regulates water withdrawals and the Commonwealth regulates just about everything else, including environmental and local land use decisions.  The adoption of the DRBC's proposed regulations could move the Commission into enter areas traditionally left to Pennsylvania, such as regulating well pad site development.   The big question for everyone to ponder is whether that's the appropriate role for DRBC.  Do we really need a second agency of government stepping into areas that have traditionally been handled by the state?   

In his written comments on the draft regulations, PADEP Secretary Krancer asserted that Pennsylvania has the regulatory capacity to protect Pennsylvania's surface waters and groundwater from the risks posed by Marcellus drilling and that the DRBC needs to avoid adopting duplicative and unnecessary regulations.   The problem Pennsylvania faces is it clearly does not control its own economic destiny at DRBC.  Other states that have no Marcellus Shale gas to develop have an equal voice and can vote to place regulatory roadblocks in front of natural gas companies whose activities are limited to Pennsylvania, even if Pennsylvania is firmly opposed to that.  Is that fair?  Landowners in Wayne and Pike County may not think so.  Gas companies paid Pennsylvania landowners over $1.5 billion in 2009 for leasing rights and gas royalties.  Many landowners in Wayne and Pike County have already entered into leases, but DRBC's lack of regulations has effectively placed a moratorium on their ability to derive any benefits from those leases.

Marcellus Shale development represents the most significant economic opportunity in Pennsylvania in decades.  It has created tens of thousands of new jobs during a time of economic recession.  If the regulations that DRBC adopts prevent or hinder that development, there will continue to be controversy, and possibly litigation brought by those who are adversely impacted.   

And where does it stop?  If the effect of the DRBC's regulations is to place restrictions on natural gas development in Pennsylvania, does that mean that Pennsylvania should be able to propose, through DRBC, restrictions on new housing developments in NJ or Delaware?   Is it okay for DRBC to regulate local land use decisions in Pennsylvania but not okay to do so in these other states that don't have any Marcellus Shale gas, but whose land use decisions also impact the basin?   

One would hope that the states would work cooperatively to ensure that the water resources of the basin are protected, doing so mindful of the regulatory capabilities of each state.  If Pennsylvania was incapable of protecting the waters of the basin, then I could understand the need for a second layer of regulatory oversight.  That does not appear to be the case.  Pennsylvania has acted responsibly to development new regulations, including well-casing regulations.  It has anti-degradation regulations to protect  special protection waters.  It has adopted new well fees that have allowed it to hire more well inspectors.  Rather than being driven by emotion, Pennsylvania has approached Marcellus Shale regulation in a thoughtful manner, based on sound science, which balances the rights of landowners and the gas industry against the right that each citizen has to clean air and clean water.   

The Governor, his cabinet, and the members of the General Assembly have to answer to the citizens of the Commonwealth every election.   For Marcellus Shale development and for every other matter that impacts the environment in Pennsylvania, those people are the ones who swear an oath to protect and defend the Pennsylvania Constitution, which includes the right to clean air and clean water, and they are the ones whose decisions are judged by the voters every election.  When those people act to regulate the development of Marcellus Shale, they do so mindful of that oath and that the actions they take must protect the health and environment of Pennsylvania's citizens.  That is the essential states' rights issue here.  I challenge anyone who thinks that Pennsylvania is incapable of protecting its own citizens and its water resources to spend a day at the Rachel Carson Building in Harrisburg and then travel to each of PADEP's regional offices.  The Department's staff is well trained, highly capable and professional.  They spend each and every day protecting Pennsylvania's environment, and they are fully capable of regulating Marcellus Shale development. 

That's not to say that the DRBC's staff isn't equally capable, professional and diligent.   I know many DRBC personnel from having worked with them when I was at PADEP.  There's no question they are equal to PADEP in terms of training, knowledge and their desire to protect the environment.  My point is that the DRBC's staff has traditionally regulated water withdrawals.  They have not, up until now, been looked to for expertise in the area of local land use.  There is no reason why DRBC and PADEP can't work together to protect the citizens of Pennsylvania and the entire basin.  There shouldn't be any friction between the two entities.  One would hope that they'd  work together to ensure that there are no gaps in regulatory coverage.  One would also hope that DRBC is taking this additional time to try to work things out with Pennsylvania, since it is the state in the Compact that is impacted the greatest by DRBC's proposed regulations. 

No disrespect to the other states in the Compact, but at the moment, the center of the universe for Marcellus Shale exploration and development is Pennsylvania.  It is imperative, therefore, that DRBC and its member states work with Pennsylvania as the Commission moves toward finalizing this important regulatory package.   Maybe the best strategy would be to seize any and all common ground and postpone action in areas where full consensus is lacking.   That would be a major step toward fairness and greater regulatory certainty for everyone.