Numbers in House Republican budget proposal on gas leasing on state forestlands don’t add up, DCNR secretary says

NEWS RELEASE

COMMONWEALTH OF PENNSYLVANIA
Department of Conservation
and Natural Resources
Commonwealth News Bureau
Room 308, Main Capitol
Harrisburg, PA 17120

FOR IMMEDIATE RELEASE

CONTACT: Christina Novak
DCNR Press Secretary
(717) 772-9101

NUMBERS IN HOUSE REPUBLICAN BUDGET PROPOSAL ON GAS LEASING ON STATE FORESTLANDS DON’T ADD UP, DCNR SECRETARY SAYS

HARRISBURG (July 10, 2009) — The House Republican budget proposal outlined today misses the mark on the amount of state forest land available for natural gas development, and the amount of revenues that could be generated through a lease sale, Department of Conservation and Natural Resources Acting Secretary John Quigley said.

“The first error is that there are 2.1 million acres of state forest land available for lease,” Quigley said. “While that is the total number of acres of state forest land that we Pennsylvanians own, only 1.5 million acres are in the Marcellus Shale geologic formation that contains deep natural gas reservoirs, and 660,000 of those acres are already under lease.

“It is simply disingenuous for the House Republicans to suggest that leasing an additional 390,000 acres of forest lands for gas development leaves 80 percent of the land intact,” Quigley said. “House Republicans completely and intentionally ignore the environmental, economic, recreational and cultural uses of the state forest.”

Quigley noted:

One hundred eighty thousand acres of state forest land in the Marcellus play are wild and natural areas.
Two hundred thousand acres of are old growth forests or areas identified to protect the diversity of our plants and animals.
An additional 87,500 acres are located in the Poconos and 20,000 acres are in the Laurel Highlands ecotourism region – drilling there would be devastating to the local economy.
Lastly, 127,500 acres of state forest land in the Marcellus play are areas of significant environmental/recreational value (including lease camps, riparian areas, wetlands, view sheds, vistas, steep slopes, threatened and endangered species, unique habitats, and special recreation zones.

“We believe a maximum of 225,000 acres of state forest land could conceptually be leased, well short of the 390,000 acres proposed,” Quigley said. “However, leasing all of that acreage will irrevocably change the character of state forest land with the necessary roads, wells and other infrastructure. We also know that lessees will consider accessibility to roads and gas line infrastructure before they lease. Not all remaining land has sufficient access.”

“We also question why we would put out a lease sale when the market is so depressed,” Quigley said. He noted that House Republicans revenue assumptions are not supported by current market rates.

“Market price for Marcellus Shale acreage in Pennsylvania has fallen dramatically since DCNR’s sale of leasing rights last fall. At that time, gas was $14 per thousand cubic feet; now it’s $3.50 per thousand cubic feet. Today, land is leasing for $200 to $500 per acre, not the $1,500 minimum assumed by the revenue projections in question.

“We also should not forget the other landowners in the Marcellus play are competing in this marketplace—state forest lands comprise only about 22 percent of the land in the Marcellus play,” Quigley said.

DCNR strives to maintain its certified, sustainable management of the Pennsylvania state forest system.

“Rampant, unplanned leasing of forest lands would severely jeopardize DCNR’s ability to retain its third-party certification and, perhaps more importantly, maintain ecologically sound forest management, jeopardizing the future health of our forests.”

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2009