Maryland Natural Gas Bill

Will Maryland Impose Fees on Natural Gas Producers?

Written by Green Chip Stocks
Posted March 22, 2012 at 4:39PM

Maryland could become the first state in the union to charge a fee to energy companies drilling for natural gas.

The Maryland House of Delegates voted 94-41 to pass the bill, which imposes a $15-per-acre fee. The proceeds go towards financing studies on how best to extract natural gas from Marcellus Shale. Supporters of the bill claim that upwards of $1.8 million could be raised from these fees.

Some lawmakers worry about the potential environmental burdens that could come with opening up the state to new fracking operations. Democrat Delegate Maggie McIntosh raised concerns over possible water contamination and earthquakes, similar to those that happened as a result of fracking in Youngstown, OH.

“It is important that when we eventually—probably—drill in Maryland that it is done in a safe way,” McIntosh said.

Opponents of the bill questioned why companies that could help create jobs in Maryland should have to pay for a study to see if they can do business. Furthermore, critics have said that this fee simply adds another needless hurdle for the economic development of western Maryland, the location of most of the state’s Marcellus Shale.

“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 say there’s a big sign at our border saying: ‘Gas companies not welcome,” Republican Delegate Wendell Beitzel said.

The real test comes in the senate. A similar bill failed in the senate last year and supporters are afraid their bill could befall the same fate.

Gas drilling has been a much-ballyhooed topic on both sides of the aisle in Maryland over the past few years. Last year, Governor Martin O’Malley signed an executive order putting drilling on hold until further environmental studies are carried out.

These studies are being conducted in part by Maryland’s Environment and Natural Resources departments. Each department would have a say in any future drilling. Maryland state law dictates the Department of the Environment has authority to impose conditions on permits to protect the environment and the safety of the public.

The outcome of these studies are due on August 1, 2014.