Maryland’s energy policy in the balance

Daily Record Business Writer//January 10, 2013

Maryland’s energy policy in the balance

By Alexander Pyles

//Daily Record Business Writer

//January 10, 2013

ANNAPOLIS — Unpopular tax increases, sensitive social issues and the tremendously divisive bomb of gambling expansion all found their way through an often tense General Assembly in 2012.

But those issues have combined to divert attention from Maryland’s evolving energy policy, which now includes

plans to offer tax incentives and a guaranteed market for producers of offshore wind energy, as well a debate over the controversial natural gas drilling technique known as hydraulic fracturing, or fracking.

Gov. Martin O’Malley has had a hand in both aspects of the policy. In 2011, he signed an executive order placing a moratorium on drilling in Western Maryland pending best practice and safety studies by an appointed commission. And for the last two years he’s sponsored legislation that would have benefited offshore wind farm developers.

The wind bill seems likely to receive serious consideration this session, after back-to-back years in which it died in the Senate Finance Committee. This year, Senate President Thomas V. Mike Miller Jr., D-Calvert and Prince George’s, rearranged the committee to secure the number of votes needed to get the bill to the floor of the full Senate.

But the fracking moratorium expires in 2014, and some task force members say there still is no money to conduct the studies O’Malley mandated. Garrett and Allegany counties are both believed to sit atop a mile-deep deposit of rock-encased natural gas, called Marcellus Shale. Energy companies extract that gas by drilling down to the rock and fracturing it using a blast of water and chemicals.

Del. Heather R. Mizeur, a Montgomery County Democrat, said this week that without money, the studies could not answer the 18 points O’Malley asked the Marcellus Shale Safe Drilling Initiative Advisory Commission to address in a report that is due in a year’s time.

She’s proposed a bill that will give force of law to O’Malley’s executive order and keep the moratorium in effect until money is raised for the safety studies to be completed. Del. A. Shane Robinson, D-Montgomery, has gone a step further, announcing plans to sponsor a bill that would permanently ban fracking.

“We have more questions than answers,” said Mizeur, a member of the commission. “We have to have these answers before we make a decision.

“The oil and gas industry’s trying to wait us out.”

That may not be the case. The Daily Record reported in September that a number of natural gas companies have allowed leases signed with Western Maryland landowners to lapse. Industry advocates say companies aren’t in any hurry to do business in Maryland because of the regulatory uncertainty.

But fracking could generate thousands of jobs in Western Maryland, an area hit particularly hard by the slowdown of the coal mining industry and the recession’s impact on tourism.

Miller said he recognized the economic value of fracking, and said he’d like to see money raised for studies.

“I’m for fracking; we’ve got to find a way to move forward on that measure,” Miller said. “But we’re not going to be able to do it until a study is in place. … It’s a resource, people in Western Maryland need to be able to benefit from the resource, the state taxpayers need to be able to benefit.”

Miller said he thought the Senate could agree on the moratorium legislation, which could also allow state agencies to charge a fee to fund the safety study. But if that bill fails, he said, the legislature will not outlaw drilling.

“A ban on fracking is not going to pass, in my opinion,” Miller said. “That’s ludicrous. If they can’t study the issue, then we’re certainly not going to ban it.”

More jobs, more cost

Wind, however, appears to be the more pressing issue. If the bill does not pass this year, O’Malley could have difficulty garnering the necessary support in 2014, an election year.

Like fracking, developing an offshore wind farm is projected by some to create thousands of jobs in the state; however, it could necessitate slightly higher electricity rates for customers who use power generated by the turbines, which would be built 10 miles off the coast of Ocean City.

O’Malley has not yet revealed what wind energy legislation might look like this year. Maryland Energy Administration officials declined to comment until the governor’s bill is introduced, but the agency successfully presented a plan to the Board of Public Works last week that will allow a private contractor to begin surveying the ocean floor in advance of development.

Senate Minority Leader E.J. Pipkin, an Upper Shore Republican, promised there would be opposition to the wind bill from his party this year, in part due to its expense.

“Wind is an amazing proposal,” Pipkin said. “Each year, it comes back, and each year, the economics get worse and worse and worse.

“The real question is, why does he keep bringing this back? … I don’t think the citizens of Maryland should be paying for wind power.”

Despite the House of Delegates passing bills the last two years regarding both energy issues, neither fracking nor wind have been discussed by the full Senate in those sessions.

Miller, though, said that won’t be the case this year.

“I think we could do something on wind power this year, and we can make a start on fracking,” he said.


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