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New Jersey Assembly Committee Votes to Ban Marcellus Waste

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An article in the Harrisburg Patriot News this morning noted that the Environment Committee of the New Jersey State Assembly voted 5-1 to prohibit any facility in the state from receiving Marcellus waste material, including frac water and drill cuttings.  While I suppose that is good news for the companies in Pennsylvania that handle frac water and drill cuttings, since it eliminates competition from facilities in New Jersey, one has to wonder what this means in the bigger picture of economic relations between the states.  If NJ can ban the importation of frac water and drill cuttings from PA, one would assume that PA could ban the importation of different kinds of waste material from NJ.  For example, New Jersey has a lot of power plants that produce fly ash.  Some of that fly ash no doubt makes it way into impoundments in PA or is beneficially re-used in PA, I would assume.  Could PA just tell NJ that it can’t send any more fly ash to PA facilities?  I’m sure there are other types of waste materials you could use to fill in the blanks.

I remember back when I was at PADEP and New York City decided it was going to shut down the Fresh Kills landfill in Staten Island.   They convened a stakeholder group within New York to decide where all that garbage should go once Fresh Kills was shut down.  Of course, no one invited Pennsylvania to participate in the stakeholders group.  So when that group decided that NY would just send its garbage to PA, who on the stakeholder group was going to argue with that?  When the news hit PA, Secretary Seif told me to go tell Governor Pataki that they needed to come up with another plan.  I got on the Governor’s plane with Senators Dave Argall and Ray Musto and we flew to Albany and met with Governor Pataki’s staff.   That trip didn’t get us very far, since NY had already decided what they were going to do.  We then went to DC and with Jim Greenwood’s help tried to get federal legislation to allow PA to put some reasonable controls on out of state garbage.  That didn’t get us anywhere either, because it turned out that the largest exporters of waste had a lot of friends in Congress.   

So what am I trying to say here.  It just seems wrong to me that NJ can tell waste generators in PA that they can’t send that waste to NJ.  I don’t care what kind of waste it is.  As best I can tell, the Supreme Court considers waste to be commerce, so unless NJ has some authorization from Congress, I am not sure they can get away with banning waste from PA, whether it is frac water, drill cuttings, or any other kind of waste material. 

Now let’s think about how this plays out in the context of our friendly multi-state compact known as the Delaware River Basin Commission.  Properties overlying the Marcellus area of PA, which are subject to the jurisdiction of the Delaware River Basin Commission (mostly Pike and Wayne counties), can’t get at the gas without approvals from the DRBC.  The DRBC, therefore, controls the economic destiny of many landowners in northeast PA.  One of the DRBC’s member states may now move to ban the importation of Marcellus frac water and drill cuttings.  So, essentially, you have a member state that not only has no Marcellus Shale resources, but wants to put up a big wall at its borders to any residuals generated by the development of Marcellus Shale wells in PA, and that member state has an equal voice in how the DRBC regulates the development of this resource.  I’m not sure how that plays with anyone else, but in my mind, the signals coming from the NJ state assembly are very troublesome on so many different levels.   It seems like their Commissioners, who arguably would reflect the will of their state Assembly,  would have to be biased against anything having to do with Marcellus Shale. 

The development of Marcellus Shale is the largest growth area of the PA economy.  It is probably the reason why PA’s unemployment rate has remained below the national average for so long.   Maybe PA doesn’t want businesses in NJ benefiting in any way from the Marcellus Shale.   Maybe PA businesses are perfectly happy keeping all the revenues from the Marcellus in PA.  On the other hand, has anyone in the NJ Assembly given any thought to the message this sends to their counterparts in PA?  Have any of them considered whether prohibiting the importation of frac water and drill cuttings is constitutional?  Have any of them considered whether there are any broader implications for economic relations between the two states?  Where does this lead?  Should PA pass a law saying that PA property owners who receive lease payments and royalties from Marcellus shale development can’t deposit those checks in banks in NJ?  That couldn’t possibly be legal.  Could PA simply declare that oil and gas companies developing Marcellus shale wells in PA can not  use drilling equipment manufactured in NJ on those wells because of their supposedly inferior quality?  Again, could they really do that?  Could PA pass a law saying that environmental engineers working on Marcellus Shale projects must work out of offices in PA and that engineers licensed only in NJ can’t work on any aspect of a Marcellus project in PA?   I don’t know but that could lock a lot of people out of the Marcellus marketplace. 

Are the states supposed to build big bubbles around their borders and make decisions on what can come in and what can go out?   They mostly haven’t up until now.  Is Marcellus the place to start?  It just doesn’t seem right to me.