Group demands more Pennsylvania natgas regulation

By Jon Hurdle

PHILADELPHIA, Sept 9 (Reuters) - Environmentalists accused Pennsylvania regulators of failing to protect public lands from damage by energy companies drilling for natural gas in the massive Marcellus Shale formation.

It is the latest potential environmental obstacle to the development of the Marcellus Shale, a reserve estimated to contain enough natural gas to meet total U.S. needs for at least a decade.

The Chesapeake Bay Foundation filed an appeal on Wednesday with the state's Environmental Hearing Board, claiming that the state Department of Environmental Protection did not properly assess the impact of erosion caused by Fortuna Energy Inc drilling in state forests in Tioga County, northern Pennsylvania.

Representatives of Fortuna and its parent company -- Talisman Energy Inc (TLM.TO) of Calgary, Canada -- were not immediately available to comment.

The DEP issued a permit in March for the project under a new expedited applications process that failed to meet legal requirements for a study of the effect of drilling on erosion and sediment control, the foundation said.

The appeal, filed on Tuesday, is the first legal challenge to the DEP's regulation of the Marcellus Shale, and is likely to set a precedent, whatever the outcome, said Matt Royer, an attorney for the Chesapeake Bay Foundation.

The move follows criticism by drilling opponents the DEP is failing to adequately protect public and private lands from suspected water contamination and other environmental damage by energy companies developing the Marcellus Shale.

Some rural communities have also accused natural gas companies of polluting ground water during the process of drilling into the shale. The industry argues that its safeguards prevent any escape of toxic chemicals into water supplies.

"The DEP is rubber-stamping permit applications without any formal review whatsoever," Royer told a conference call with reporters. "Our state environmental protection agency is not doing what it should do to protect our environment."

Tom Rathbun, a DEP spokesman, said the department does not comment on pending litigation.

The foundation argues that restraints on drilling companies were weakened when the DEP told county conservation districts in March that they no longer had authority to review permit applications for erosion and sediment control. They are urging the agency to restore the local oversight of drilling applications.

The DEP's new policies violate environmental laws including the federal Clean Water Act, the appeal alleges. (Editing by Daniel Trotta and Philip Barbara)