By Steve McConnell (Staff Writer)
Published: September 10, 2010

Economic development organizations and landowner groups in Wayne County issued a stinging criticism Thursday against the Delaware River Basin Commission for enacting a moratorium on natural gas drilling and causing a deep negative economic impact by effectively halting development.

The pro-drilling groups, including landowners’ alliances that have secured more than 100,000 acres in Wayne County for gas development and the Wayne County Chamber of Commerce, also warned the commission not to develop stringent regulations that would exceed current state environmental regulations because it could deter companies from operating there.

“We want to get the debate started and put our position out,” said Peter Wynne, spokesman, Northern Wayne Property Owners Alliance. “We expect there is going to be a degree of severity that exceeds” the state Department of Environmental Protection.

The commission, which has regulated water resources in the four-state area that drains into the Delaware River since 1961, including a large swath of eastern Pennsylvania, has been developing its own environmental regulations over the industry in light of an increased interest in drilling for natural gas in the watershed.

While Marcellus Shale drilling is accelerating throughout the state and regionally in Susquehanna and Bradford counties, there are no producing wells in out the 13,539-square-mile Delaware River Basin, though Wayne County has lured multimillion-dollar land-leasing investments from several natural gas companies since 2007. The Northern Wayne Property Owners Alliance, encompassing 100,000 acres mostly north of Honesdale, finalized a land-lease agreement valued at a more than $100 million with New York City-based Hess Corp. and Houston-based Newfield Exploration Co. in late 2009.

Meanwhile, the commission enacted a drilling moratorium in May, in particular on production wells, but is allowing 10 exploratory wells to go forward in Wayne County while the regulations are developed.

The moratorium caused Newfield Exploration Co. and Hess Corp. to halt land-lease payments until the drilling ban is lifted. This could amount to the loss of $220 million in payments to leaseholders – not including royalties on producing natural gas wells – if Newfield and Hess Corp. decided to pull out of Wayne County, Mr. Wynne has said.

The pro-drilling groups’ 10-page letter, which was widely distributed to federal, state and local government officials Thursday and to the five-member commission board, urges the commission to consider the “unparalleled economic opportunities” gas drilling could yield while urging them to avoid the “infinite costs” associated with stiff environmental regulations. It also cites the poor state of the economy in Wayne County, a largely rural area with little to no economic growth in recent years, and how gas drilling could solve these “severe” challenges.

The letter also includes a series of recommendations the commission should take in its effort to regulate the industry. Efforts to reach Wayne County economic development officials were unsuccessful.

Nevertheless, the river basin commission believes it must protect the integrity of the Delaware River watershed – home to the Delaware Water Gap National Recreation Area and part of the National Wild and Scenic Rivers System – while allowing natural gas drilling to occur.

Commission spokesman Clarke Rupert said the agency is trying to ensure that water used by an estimated 15 million people in four states is not negatively impacted by the industry, and criticism of their efforts to ensure that is unfair.

“Do you want to do it quickly … or to get it right? Our approach is to get it right,” Mr. Rupert said. Mr. Rupert said that he does not know what the makeup of the regulations will be, in part because once draft regulations are published it will undergo a series of public comment and public hearing periods that may tweak its final form.

The commission hopes to adopt final regulations by the end of this year, although that is subject to change.

Contact the writer: smcconnell@timesshamrock.com

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Copyright:  The Scranton Times