On July 2, Pennsylvania Governor Corbett signed Act 87 of 2012 into law imposing a moratorium on issuance of new natural gas well drilling permits for wells targeting the South Newark Basin, a formation that underlies parts of Southeastern Pennsylvania.

As has been reported in the press, legislators reacted to a report issued by the United States Geological Survey dated June 2012 suggesting that the South Newark Basin probably contains between 363 and 1698 billion cubic feet of natural gas.  The legislators inserted the appended language in a bill addressing largely unrelated matters.

The amendment will prohibit new well drilling permits until the Department of Conservation and Natural Resources completes a study on the “resource recovery implications” and “fiscal implications” of natural gas development in consultation with the municipal governments.  In addition, the moratorium continues until counties in the South Newark Basin can elect to impose an impact fee under the recent amendments to the Oil and Gas Act known as “Act 13.”

The affected area lies in the Delaware River Basin.  The Delaware River Basin Commission has imposed its own moratorium on natural gas development in the basin until it adopts regulations.  The Pennsylvania Administration has been vocal about lifting that moratorium by having the DRBC adopt regulations.  Accordingly, the Governor’s signature on Act 87 is not obviously consistent.Continue Reading Moratorium on Development of South Newark Basin Gas in PA