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New governor, legal delays might imperil plans to drill on public lands

The election of a new governor combined with delays caused by a legal settlement might imperil plans by Gov. Tom Corbett and the legislature to raise $95 million by signing new natural gas leases on public lands this fiscal year.

Gov.-elect Tom Wolf, a Democrat, campaigned on a pledge to reinstate the ban on new oil and gas leases in state parks and forests that was in place from October 2010 through this May. His inauguration is Jan. 20.

That leaves little time for the Department of Conservation and Natural Resources to evaluate proposals by drilling companies, especially since the state agreed not to sign any leases while the Commonwealth Court considers an environmental group’s legal challenge to the way the state raises and spends revenue from oil and gas wells on public lands.

The judges heard oral arguments in early October but did not indicate when they will rule. DCNR’s deputy secretary for parks and forestry, Dan Devlin, told an advisory board in October that “it will probably be several months before we hear anything back from the courts.”

Mr. Corbett’s top energy adviser, Patrick Henderson, said he won’t speculate on whether leases could be signed before Mr. Wolf takes office, but he wrote in an email that “executing leases is not something that is done quickly, and myriad reviews are necessary internally.”

Instead of opening specific blocks of land for lease, DCNR is taking nominations from drilling companies that want to extract natural gas from below state lands that border properties they are already developing. DCNR committed to publicly listing any areas nominated by drilling companies once they are received and reviewed, Mr. Henderson said, “but that has not occurred since interest was predicated on the outcome of the Commonwealth Court case.”

Related: Wolf likely will face difficult dealings with GOP

Mr. Corbett lifted the leasing ban in May and replaced it with a restricted leasing plan that allows gas below parks and forests to be tapped by wells drilled horizontally from adjacent properties as long as the activity doesn’t create new long-term surface disturbances on conservation lands.

DCNR has interpreted that directive to mean that companies would not be allowed to build or expand roads, pipelines, compressor stations and wells on new leases, but could perform operations like seismic surveys that cause short-term surface impacts.

The state budget counts on generating $95 million from bonus payments on new leases this fiscal year. Under the state’s current contract terms, nearly 32,000 acres would need to be leased to meet that goal.

Mr. Wolf is unlikely to approve even non-surface disturbance leases if his campaign language is any indication.

The Wolf campaign sponsored an online petition this spring to “keep gas drilling out of Pennsylvania state parks and forests.” It said that by lifting the moratorium, Mr. Corbett showed “he’s willing to give away our state’s natural resources to big oil and gas companies at the expense of the environment, our state constitution and the people of Pennsylvania.”

Wolf campaign spokesman Jeffrey Sheridan said in a statement that Mr. Wolf “has always said” he supports a drilling moratorium on public lands.

Mr. Wolf can restore the moratorium once he takes office through executive order without the approval of the Republican-controlled legislature.

Mr. Henderson said that Mr. Corbett continues to believe his leasing policy is a sound one. Choosing not to follow through on the leasing plan, he said, “has the potential for significant budgetary impacts.”

“It is obviously up to the new administration to make its own determination,” he said.

About 700,000 acres of state forests are already available for Marcellus Shale gas extraction, including about 385,000 acres where the gas resources are controlled and leased by the state.

As of October, DCNR had approved more than 1,000 Marcellus wells on state forests and nearly 600 of them — clustered on about 230 well pads — had been drilled.