Like many Eastern states, historically Maryland has not been a large producer of oil and gas. But that could change in the not so distant future. In the West, proponents of “fracking” are anxiously eying the new Hogan government to see what it will do while offshore, the Department of the Interior has announced that it will publish for public comment a draft proposed Five-Year Program for oil and gas leasing in the Mid-Atlantic. Development in either or both sectors could have a large impact on Maryland’s economy.
Out West, Maryland has had a de facto ban on “fracking,” a process that allows for the development of natural gas that otherwise cannot economically be removed from the ground, since the O’Malley administration began assessing the risks associated with fracking in 2011. Three long years later, the group doing the study published a report with proposed regulations that would allow for drilling but which set the “gold standard” for how to do so. But that report now has a new administration at the helm, that of Republican Governor Larry Hogan, who has endorsed fracking so long as it can be done safely. All eyes are on Governor Hogan to see if he moves forward with the proposed regulations in their current form.
Turning to offshore leasing, while the Deepwater Horizon incident made most Americans aware of the fact that oil and gas development takes place in the Gulf of Mexico, such development has been off-limits for decades off the West and East Coasts of the United States. While California continues to remain off-limits, for the first time in decades, the United States is laying the groundwork for development off the shores of Maryland, Virginia and the Carolinas. But the associated process is multi-phased and will take several years of independent reviews under the National Environmental Policy Act before leasing would actually occur. For the initial phase, comments on the proposed Five-Year Program are due March 28, 2015.
For further information, please contact Bill Sinclair at bsinclair@silvermanthompson.com or at (410) 385-9116. Prior to becoming a partner at STSW, Mr. Sinclair practiced natural resources law in Washington D.C. at the oldest firm in the country to focus exclusively on environmental issues. In addition, he is an adjunct professor at the University of Maryland School of Law where for the past five years he has taught a natural resources class.