Hydraulic Fracturing's Next State: Maryland May be Next

Now that Pennsylvania has enacted an environmental impact fee for every natural gas well drilled, neighboring Maryland could soon follow.

The Maryland General Assembly will soon consider a bill mandating oil and natural gas companies to pay $10 for every acre leased for natural gas drilling for the purpose of funding a hydraulic fracturing (fracking) economic feasibility and environmental impact study.

Maryland, like Pennsylvania, New York and other eastern states, sits atop the lucrative Marcellus Shale basin, thought to harbor 410 trillion cubic feet of technically recoverable natural gas. Fracking activity has skyrocketed since 2008.

Gov. Tom Corbett, a Republican, this week signed Pennsylvania's new fracking fee law passed this month by Harrisburg's Republican-controlled General Assembly.

Maryland, by contrast, is controlled by the Democrats, who control the General Assembly in Annapolis and include Gov. Martin O'Malley, who started the ball rolling last June for the impact study.

Maryland legislators are also debating whether to, and by how much, tax the revenue potentially generated by natural gas companies if drilling is allowed to take place in the state.

A Maryland environmental impact study is expected by 2014, but has yet to pass either legislative chamber, said Moira Moynihan the legislative aide to Delegate Heather Mizeur, a member of the state commission looking into the potential impact of fracking.

Mizeur, a Democrat, represents affluent Montgomery County, which wouldn't have any fracking.

Moynihan said 150,000 acres have been leased to companies in the western Maryland, close to the West Virginia border. A bill, circulating in the State Senate would have companies pay a retroactive $10 per acre leased.

If passed, the bill could generate $1.5 million for the state's impact study.

The State Senate is expected to consider the bill first, followed by the House of Delegates.

Moynihan expressed confidence the bill will pass the Senate, where it was bottled up in committee last year. The House of Delegates passed it, though.

I think it's looking good, she said.

While Maryland has allowed natural gas companies to lease land, drilling hasn't started yet because the impact study hasn't been finished.

Charlotte Davis, policy aide to Sen. Brian Frosh, a Montgomery County Democrat who authored the bill, said Maryland essentially has a de facto moratorium on fracking.

In its final form, the 2014 study will stipulate regulations on how best to mitigate the effects of natural gas drilling, and how best the state can govern the industry.

Natural gas prices Wednesday fell by a dime, or 3 percent, trading at $2.72 per 1,000 cubic feet.