Marcellus Shale Drilling Moratorium Sparks Public Criticism

Published October 4, 2010

The decision by an obscure but powerful regulatory commission to impose a de facto moratorium on natural gas drilling in the Delaware River Basin has unleashed a wave of protest in the affected communities.

Regional Moratorium Imposed
In May the Delaware River Basin Commission (DRBC) enacted a moratorium on all production wells in its four-state jurisdiction, while allowing ten exploratory wells to go forward. DRBC argues the moratorium and lengthy regulation-drafting process are necessary to protect the water of the approximately 15 million people living within its jurisdiction.

The moratorium was originally expected to last until the end of the year, but that date may slip to sometime in 2011.

The moratorium has brought natural gas production in the 13,539-square-mile Delaware River Basin to a screeching halt, infuriating landowners who were counting on the drilling royalties to help see them through the recession.

In northeastern Pennsylvania, the Northern Wayne Property Owners Alliance (NWPOA) issued a blistering ten-page letter on September 9 excoriating the commission for the economic damage the moratorium has caused. 

“There is no conflict between the objectives of river protection and natural gas development, and none should be created or implied in DRBC regulations,” said the NWPOA letter.

Drilling Continues Nearby
Peter Wynne, a spokesman for NWPOA, says the moratorium has caused Newfield Exploration Co. and Hess Corp. to halt land-lease payments until the ban is lifted. He told the Scranton Times-Tribune this could amount to the loss of $220 million in payments to leaseholders—not including royalties paid to government—if Newfield and Hess decide to pull out of Wayne County altogether.

Landowners and businesses groups in eastern Pennsylvania are particularly bitter over the moratorium because drilling in the Marcellus Shale in counties to their west continues, as does the flow of royalties and tax revenues. 

Created in 1961 by an interstate compact, DRBC has jurisdiction in four states, including large swaths of eastern Pennsylvania, western New Jersey, upstate New York, and Delaware.  The commission’s 45-person staff includes seats for the governors of Delaware, Pennsylvania, New York, and New Jersey, plus the U.S. Army Corps of Engineers representing the federal government and the Obama administration. 

Economy Suffers under Ban
“Given the ongoing problems with the economy and job creation, we need to be very concerned about measures likely to do far more economic harm than environmental good,” said Ben Lieberman, an environmental fellow at the Competitive Enterprise Institute in Washington, DC.

“Drilling in the Marcellus Shale has created very few actual problems while serving as a genuine economic stimulus for many depressed areas in Pennsylvania and other states,” Lieberman explained. “The existing regulatory requirements applicable to natural gas producers have worked very well, and there is no good reason to add to them.”

Bonner R. Cohen, Ph. D ([email protected]) is a senior fellow at the National Center for Public Policy Research.