On January 20, 2015, Democrat Tom Wolf was sworn in as Pennsylvania’s 47th governor, replacing Republican Tom Corbett. Governor Wolf’s inauguration ceremony was interrupted with chants of “ban fracking now.” On Thursday, January 29, 2015, Governor Wolf responded to those chants by issuing an executive order reinstating a moratorium on oil and gas drilling in state parks and forests.
Executive Order No. 2015-03 bans new oil and gas leases from being issued for lands managed by the state’s Department of Conservation and Natural Resources. The order rescinded Executive Order No. 2014-03, issued by Governor Wolf’s predecessor, which allowed the rights to oil and minerals below state forest land to be leased to drilling companies that maintained surface wellheads on adjacent private property.
The now banned leases were projected by former Governor Corbett to generate $95 million for the state budget. This has led natural gas industry trade groups to criticize the governor’s action due to its impact on the state’s revenue and economic development needs.
Prior to this ban, Governor Wolf has spoken of plans to issue a new tax on the oil and gas industry. Louis D’Amico, president of the Pennsylvania Independent Oil and Gas Association, pointed out the irony of the new administration preventing drilling for a resource that they are also seeking to tax. According to Mr. D’Amico, the order is “a lose-lose for Pennsylvania’s taxpayers and energy consumers.”
This order comes only weeks after Governor Wolf nominated John Quigley to be secretary of the Department of Environmental Protection. Mr. Quigley led the Department of Conservation and Natural Resources from 2009 to 2011 under Democratic Governor Ed Rendell. In recent years, Mr. Quigley has worked for Harrisburg-based environmental group PennFuture. In a recent blog post, Mr. Quigley commented on New York’s decision to ban high-volume hydraulic fracturing, stating that the report on it “should add great weight to the already self-evident case for tougher, more comprehensive regulation.” In addition, Mr. Quigley stated that there was an urgent need to study hydraulic fracturing’s impact on public health and the environment.
Understandably, many in the oil and gas industry are watching the early moves of the newly appointed governor with concern.
This article was authored by Matthew S. Tyree, Jackson Kelly PLLC. For more information on the author, see here.