Pennsylvania Governor Approves Senate Bill 297 Establishing Marcellus Shale Production Reporting Requirements

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After more than a year in the General Assembly of Pennsylvania, Senate Bill 297 was approved by Governor Rendell on March 22, 2010, which will become effective 60 days after the Governor's approval. This is the first regulatory legislation in Pennsylvania relating to Marcellus shale.

Senate Bill 297, sponsored by Senator Gene Yaw, amends Section 212 of the Oil and Gas Act requiring Marcellus Shale formation gas operators to provide well production information to the Pennsylvania Department of Environmental Protection (DEP). Operators will be required to file initial reports with DEP on or before August 15, 2010 that include the status of each well and production data for the preceding calendar year. After the initial report, subsequent semi-annual reports must be filed with DEP on or before February 15th and August 15th of each year, which will include the status of each well (only if the status has changed) and production data for the preceding six months.

The current law required DEP to keep these reports confidential for five years, while the new amendment will require DEP to make these reports available to the public on its internet website after only six months. Thus, the production data of a gas operator - which might have created a competitive advantage with a divulgence lag time of five years - will become available to the public, including regulation agencies, competing gas producers and potential market entrants, after only six months. The data may also be used by the Commonwealth of Pennsylvania in enforcement proceedings and for statistical purposes.

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