DCNR Leases 32,896 Acres Of State Forest For Drilling, Rendell Now Supports Moratorium
The Department of Conservation and Natural Resources this week announced it has leased 32,896 more acres of State Forest land for Marcellus Shale drilling in a sole source negotiation without competitive bidding netting $120 million in revenue.
As a result, Gov. Rendell announced his support for House Bill 2235 (Vitali-D-Delaware), passed by the House last week, to impose a three year moratorium on new Marcellus Shale leases on State Forest land.
Under the new lease agreement, Anadarko Petroleum Corp. has paid the Commonwealth $120 million to access 32,896 acres that are surrounded by tracts of land for which drilling companies already hold lease agreements.
The newly leased acres cover 11 tracts in the Moshannon, Sproul and Tiadaghton state forests where Centre, Clinton and Lycoming counties meet.
Because these newly leased tracts can largely be accessed by gas operations on the adjacent tracts, the amount of new state forest surface area that must be disturbed is minimized.
As a result of the new lease, Gov. Rendell said the Commonwealth will not have to make any additional state forest land available to reach its revenue $180 million goal for natural gas drilling in the 2010-11 fiscal year.
"This is a responsible approach that meets our revenue targets and limits the impact of additional natural gas exploration in our state forests," said Gov. Rendell.
"We do not need to expand our drilling footprint in state forest lands to meet our revenue goals, because these parcels are already surrounded by other leased acres," Gov. Rendell said. "They also are within areas leased in the 1970s and 1980s by DCNR, but not all the acreage was drilled because technology wasn't available to exploit Marcellus Shale deposits.
"In order to develop the acreage, DCNR and Anadarko have agreed to certain provisions to make certain there is minimal impact on the surface. Horizontal drilling technologies allow Anadarko access to most of this acreage from already disturbed areas on their adjoining leased lands."
For 27,185 acres on ten tracts, Anadarko agreed to pay $4,000 per acre, consistent with the average price paid during DCNR's January 2010 competitive lease sale. For the remaining 5,711 acres on one tract, the commonwealth will receive $2,000 per acre because the geology underneath is not as promising for gas production.
The lease of the 11 tracts totals about $120 million. DCNR's January 2010 lease sale generated $128 million -- $60 million of that went toward this year's General Fund budget and the additional $68 million will be applied to a target of $180 million to help balance the state budget for the fiscal year that begins July 1, 2010.
"With this agreement negotiated and the money in the bank, we can safely be on board with the moratorium which passed the House and is now in the Senate. If the Senate passes the legislation and it comes to my desk, I will sign it," Gov. Rendell said.
This lease ensures the citizens of Pennsylvania will benefit in a positive way from the development of the Marcellus Shale on public lands. Gov. Rendell believes it is vital for the General Assembly to pass a severance tax to further protect the interests of the citizens of Pennsylvania.
For more information, visit the DCNR Natural Gas Exploration on State Forest Land webpage.
NewsClips: Governor Supports Moratorium On Gas Drilling On State Land
State Leases Land Under Susquehanna River For Drilling
|Go To Next Article|