Oct. 20--The timing appeared awful.

On Oct. 9, as the state Department of Environmental Protection dealt with highly publicized chemical spills in the booming Marcellus Shale gas-drilling region, Gov. Ed Rendell signed a state budget that cut more than $58 million from the agency's 2008-09 spending level of $217.5 million.

A neighbor of the site where the spills occurred, Jim Grimsley, said, "It just seemed a little odd to be cutting at this time."

But the cuts at the DEP -- while significant -- might have a minimal effect on the agency's ability to monitor the Marcellus Shale phenomenon.

DEP Oil and Gas Bureau staff are paid from a special fund, separate from the department's general fund, according to spokeswoman Teresa Candori. The special fund has been swollen by recent increases in oil and gas permit fees that allowed the DEP to hire 37 new Oil and Gas staffers, increasing the number to 98.

Patrick Henderson, the executive director of the state Senate Environmental Resources and Energy Committee, said the fee increases and other factors mean that "with regard to oil and gas specifically, there is more money, more staff, more enforcement and more inspection capabilities than ever before."

Nonetheless, the potential scope of the cuts at the DEP worries environmental groups.

The agency has 2,777 workers across the state. Candori said the agency was crafting a plan to deal with the budget cut that will likely be finished within weeks.

Don Welsh, the president and CEO of the Pennsylvania Environmental Council, said simple arithmetic applied to DEP salary and budget figures showed the agency might have to cut 300 staff positions.

Even if gas-drilling enforcement is left untouched, the budget will "probably leave other important environmental needs begging," he said.

Jeff Schmidt, the director of the Pennsylvania Chapter of the Sierra Club, said that the budget cut at the DEP "was only going to make a bad situation worse" and that the agency lacked the manpower to deal with burgeoning gas development in the Marcellus Shale region.

The September chemical spills near Grimsley's property in Susquehanna County occurred on a farm leased to Cabot Oil & Gas for gas exploration.

The agency ordered Cabot to halt its use of a process that involves highly pressurized, chemical-treated water at certain gas well sites. The use of the process, hydraulic fracturing, has been a major factor in the recent boom in Pennsylvania gas development.

On Friday, the DEP lifted the ban and allowed Cabot to resume hydraulic fracturing. The DEP said the company had submitted an updated and acceptable "preparedness, prevention and contingency plan."

Grimsley leased his property to Cabot, and a well has been drilled behind his house. He followed developments as DEP staffers repeatedly visited the neighbor's property and his own.

News of the budget cut made him wonder about the timing, he said.

"This is when I thought they would want the DEP watching these guys," he said.

Henderson said several factors have actually strengthened the DEP's ability to monitor oil and gas matters.

Permit fees were increased from $100 each to an average of $2,600, he said. The agency received $800,000 from oil and gas permit fees last year and this year will receive $10 million or more, he said.

Henderson said all the money goes to inspections, permit review and enforcement.

In addition, a "rulemaking" on erosion and sediment-control permit fees will lead to a tenfold increase in revenue in that area, from about $700,000 a year to $7 million.

Henderson said some specific portions of the DEP budget that were cut were $15 million for consumer energy rebates and $11 million for safe water.

"Neither of which affect oversight of Marcellus Shale at all," Henderson said.

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