Lease for drilling of natural gas in Allegany County hits snag

Schaefer had sought expedited award for Pennsylvania company

March 08, 2001|By Michael Dresser | Michael Dresser,SUN STAFF

The state Board of Public Works turned down a proposal by Comptroller William Donald Schaefer yesterday that could have led to the award of a lease to a Pennsylvania natural gas company to drill in Allegany County.

The comptroller's motion to require the Department of Natural Resources to complete the work necessary to give the lease to Fox Oil and Gas was blocked by Gov. Parris N. Glendening and Treasurer Richard N. Dixon. Glendening said state law requires public comments and hearings before rules can be proposed to regulate drilling leases.

Schaefer's proposal follows news reports that the state has been dragging its feet in giving an answer to the Washington, Pa.-based company on whether it can drill on a tract adjacent to the Dans Mountain Wildlife Management Area.

In a recent legislative briefing, Secretary of Natural Resources Sarah Taylor-Rogers admitted that her department and others had failed to bring regulations to the Board of Public Works as required in a 1988 law.

Schaefer scolded Glendening for the failure to propose regulations.

"You had eight years to do something. You did nothing," he said. In fact, Glendening has been in office just more than six years, while Schaefer was governor from the time the law was passed until 1995.

Glendening said the department is moving forward with the preparation of regulations. He said it would be a "corruption of the process" to issue a lease for one company before rules were in place. He noted that any decision the state made on the Fox lease could set a precedent for future drilling decisions involving state lands.

"It should have public input," Glendening said. "It would be incorrect to move forward without bringing the regulations through the normal process."

The governor moved to begin the 94-day process under which the regulations go to public hearing and are reviewed by a legislative committee, using rules drafted by the department but not yet submitted to the board.

When Schaefer urged that the process be cut to 30 days, he was told the law doesn't allow such an action.

Fox has complained to key legislators that the state's lack of a natural gas policy has impeded its ability to develop such resources in Maryland at a time when the fuel is in short supply worldwide.

Glendening spokesman Michael Morrill said the department has only a few issues to resolve before it can move forward with the regulations.

He said one issue outstanding involves a federal rule governing grants the state has received for land preservation and wildlife management. For instance, the terms of a grant for the Dans Mountain area prohibits activities "for the purpose of producing revenue."

Morrill said state lawyers are working to determine how that might affect the regulations.

Sun staff writer Howard Libit contributed to this article.

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