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Maryland Gas Drilling Studies Fee Approved By House

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ANNAPOLIS, Md. (AP) — Maryland would become the first state in the nation to charge energy companies a fee to finance studies on best practices for extracting natural gas from Marcellus Shale, under a bill approved Tuesday by the state's House of Delegates.

The House voted 94-41 to impose a $15-per-acre fee that supporters say would raise roughly $1.8 million to pay for the studies.

Supporters cite health and environmental concerns about the drilling process as reasons to be careful, but opponents questioned why businesses that could help create jobs should have to pay for a study to determine whether they can do business in western Maryland, where the Marcellus Shale is located.

Delegate Maggie McIntosh, D-Baltimore, pointed to water contamination, earthquakes and environmental damage from the drilling process in other states.

"It is important that when we eventually — probably — drill in Maryland that it is done in a safe way," McIntosh, who chairs the House Environmental Matters Committee, said during debate.

But opponents of the measure say the state is putting up roadblocks to economic development that could boost western Maryland.

"I'm fearful that what we're going to see is the companies that would even think about coming to Maryland to drill a well will say there's a big sign at our border saying: 'Gas companies not welcome,'" said Delegate Wendell Beitzel, R-Garrett.

The measure now goes to the state Senate, where a similar bill stalled last year after clearing the House. Supporters acknowledge the bill could be a challenging sell in the Senate again.

"I think that we're going to have challenges ahead, but we're showing more and more momentum every year on this," said Delegate Heather Mizeur, D-Montgomery, who sponsored the bill. "Last year, we weren't able to get it passed in part because it was a new topic."

Gov. Martin O'Malley signed an executive order last year that has effectively put drilling on hold until further review. The order requires a three-part study and a report on finding and recommendations.

The state's Environment and Natural Resources departments each have a role in evaluating natural gas projects. Each would be involved in any future permitting decisions for drilling. Maryland received its first application for a permit to produce gas from the Marcellus Shale using horizontal drilling and high-volume hydraulic fracturing in 2009.

Maryland officials have not determined whether drilling can be accomplished without unacceptable risk.

Under state law, the Maryland Department of the Environment has broad authority to impose conditions on permits to protect natural resources and provide public safety. The department may deny a permit based on a substantial threat to public safety or a risk of significant adverse environmental impact.

A final report with recommendations relating to the impact of drilling is due Aug. 1, 2014.

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