Exco Resources ordered to stop Marcellus shale drilling

This is a reposting of a timely article.

Jan 13, 2010
Eric Watkins
OGJ Oil Diplomacy Editor

" LOS ANGELES, Jan. 13 -- Exco Resources Inc., Dallas—the first company permitted in an eastern Pennsylvania county to drill for natural gas on the Marcellus shale formation—has been ordered to cease operations.

According to Greenfield Township in Lackawanna County, Exco violated a local zoning ordinance. State regulators last summer gave the company a permit to drill near the Skyline Public Golf Course, which is zoned for commercial recreation.

But Township supervisor Joseph Slebodnik has since said drilling for gas is not allowed in that area. Exco has 30 days to appeal the violation notice to the township's zoning hearing board.

Exco Chief Operating Officer Hal Hickey said the company will continue working with the township and will ensure the firm is in full compliance with "all governing jurisdictions."

Last July, Exco said it received the permit from state regulators to drill two sites near the Skyline Public Golf Course in Greenfield Township.

According to reports, the golf course was part of a collectively negotiated gas lease of 25,000 acres that Exco bought for $2,100/acre and an 18% production royalty.

The award came after Pennsylvania’s Department of Environmental Protection issued a statement in April in support of drilling for gas in the Marcellus shale, noting that “the Commonwealth fully supports these activities and the development of the Marcellus play.”

Since then, however, environmental activists have been stepping up pressure on Pennsylvania officials to discontinue drilling for gas in the state’s Marcellus shale areas.

In December, the activist PennEnvironment organization pressured public officials with a report outlining what it called “the most urgent and widespread” environmental and public health concerns associated with Marcellus Shale gas drilling in the state.

“Our elected officials are going to have to make a decision: are they going to protect the public’s health, or are they going to put polluter profits ahead of the health of the Commonwealth’s citizens and environment?” said said Erika Staaf, Clean Water Advocate with PennEnvironment.

Contact Eric Watkins at hippalus@yahoo.com."

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