GAS RUSH SPARKS ENVIRONMENTAL CONCERNS

Pennsylvania has issued a record number of gas-drilling permits for each of the past three years and will likely set a new record this year. u

Officials in the northcentral Pennsylvania counties are bracing for the natural gas boom, counting on the state's permit system to protect land and water resources as companies rush to cash in on the underground bounty.

Some aren't so sure that the proper safeguards are in place.

Signs of trouble that surfaced last month near Williamsport prompted DEP Secretary Kathleen McGinty to pull together

some of the more active companies last week to discuss environmental issues and warn of enforcement action.

"Developing our energy resources cannot come at the expense of our water, our land and our ecosystems," the secretary said. "Rules are in place to protect our natural treasures and we will not compromise on them."

Much of the new drilling activity is targeted at reaching the natural gas found in the Marcellus shale formation, McGinty pointed out.

"Up until recently those natural gas deposits were either inaccessible, or reaching them was cost-prohibitive because the Marcellus shale is much deeper than formations where traditional gas fields are located," she said.

"However, new drilling techniques, extraction methods and higher energy costs have brought drilling activities to areas of the state unaccustomed to such operations."

The extraction process is also something new, and a major source of concern.

Developing the Marcellus Shale formation requires significant amounts of fresh water. Drilling rigs each require one to three million gallons of water and produce a similar amount of waste.

Companies are exempt from federal laws requiring disclosure about additives to water, called "frac' fluid," injected into wells to fracture the Marcellus and release natural gas.

It also is hard to know what comes out of the ground -- salt, metals and radioactive particles -- that may differ from site to site.

The state can demand a chemical analysis before frac' water is accepted by treatment plants. With that in mind, DEP officials recently sent a letter to sewage treatment plants warning wastewater from Marcellus drilling operations "may cause operational problems that will make it difficult to meet your .... permit effluent limits and may require changes."

Frac'ing (short for fracturing) the Marcellus involves drilling horizontally through the bedrock for up to a mile and cracking it open with high-pressure blasts of treated water.

Recent inspections have uncovered poorly constructed and dangerous water impoundments, inadequate erosion and sediment controls, improper waste and fluid disposal, and improper and unregistered withdrawals of water from streams.

"We acted quickly to stop this harmful activity," Mc- Ginty said.

On May 30, DEP ordered the partial shutdown of two drilling operations in Lycoming County and stepped up inspections of drilling operations statewide.

Meanwhile, the state legislature is considering a bill introduced by Rep. Sandra Major, R-Montrose, that would extend the Pa. Oil and Gas Conservation Law to development within the Marcellus shale deposit; define a lease under the act; exclude production costs from being deducted from royalty payments, and ensure that horizontal drilling is not conducted under any lands where a lease between a landowner and a well operator does not exist.

"As currently written, the Oil and Gas Conservation Law protections do not extend to the Marcellus shale deposits, which are located deeper than current natural gas deposits," Major said.

The Marcellus shale is a large natural gas-bearing shale formation in the Appalachian Basin. It is estimated the deposit contains recoverable natural gas reserves of between 50 trillion and 200 trillion cubic feet.

Prospectors are already paying hundreds of millions of dollars to landowners to stake out access to the Marcellus Shale. Some property owners are being offered $1,500 per acre - offers were about $100 per acre a year ago when the potential of the Marcellus was unknown.