PA legislation could trade community control for drilling fees
PA House lawmakers have joined the Senate in approving their own version of legislation related to a natural gas tax and regulations. Reconciling the differences and developing a compromise bill to provide to Governor Corbett before the year ends comes next.
See an analysis of this outcome by PA Environment Digest's David Hess, who served as Secretary of the Pennsylvania Department of Environmental Protection from 2001 to 2003, as staff in the Pennsylvania Senate and in the former Department of Environmental Resources for over 30 years at http://paenvironmentdaily.blogspot.com/
A petition is being circulated by those who oppose the bill at signon.org/sign/petition-opposing-pa?source=s.em.cr&r_by=1548617&mailing_id=1157
PENNSYLVANIA — The state Senate on Tuesday, November 15, approved legislation to establish a statewide Marcellus Shale impact fee, and to hand over decisions related to local zoning ordinances and gas drilling to the state attorney general.
The Senate bill would levy a $50,000 per well fee in the first year that would decline to $10,000 during the 11th through 20th years. Approximately 55 percent of the revenue would go to local governments, with 45 percent allocated for statewide initiatives. Senate President Pro Tempore Joe Scarnati, R-Jefferson County, said the bill imposes an effective tax rate of 3 percent.
The House may vote today on legislation that would allow counties an optional fee.
PENNSYLVANIA — As a growing number of New York towns scramble to establish zoning protections against the industrialization that characterizes natural gas extraction in the Marcellus Shale, Pennsylvania residents may be seeing that opportunity traded away in exchange for a drilling impact fee as the PA legislature moves quickly on House Bill 1950.
At the Pike County Conservation District (PCCD) meeting on November 14, executive director Susan Beecher informed the PCCD board of directors of her concerns about House Bill 1950, which addresses Marcellus Shale impact fees and also includes changes to the PA Oil and Gas Act.
“There’s some pretty strong language in there about restrictions on municipalities’ abilities to in any way regulate Marcellus Shale drilling activities,” she said. “It’s a dual-edged sword because there’s a lot of funding in there for conservation districts, but I don’t think we should be supporting any legislation that ties the hands of our municipal officials to regulate this industry.”
Beecher expressed alarm at the swift pace and scant information available. “This legislation is moving pretty fast and we’ve had some trouble getting information about it,” she said. “It’s been very secretive. The places where we usually get information on legislation just don’t have much information on this.”
Beecher cited other issues. “There’s a lot of language relative to the PA Oil and Gas Act, including provisions such as setbacks for gas wells from drinking water sources and setbacks from water resources for drilling infrastructure; unfortunately, the definition of water resources is really problematic in that it refers to named streams and water courses on topographic maps and many many headwater streams are not shown on topographic maps.”
Beecher called it an example of how the legislation works around some of the natural resources protections the conservation district would like to see. “I don’t think we’re going to have a chance to comment on this before it gets voted on,” she added. “It’s kind of disheartening the way this is moving through the legislature without a lot of information being available to people that are interested in seeing the details.”
The new drilling fee proposal moved out of the Senate Appropriations Committee later that evening when the amendment offered by Senator Joe Scarnati (R-Jefferson) to Senate Bill 1100 proposing a uniform, statewide Marcellus Shale drilling fee starting at $50,000 per well, per year decreasing to $10,000 after 10 years was approved largely along party lines. Senate Democrats offered their own proposal starting at $75,000 per well, which was defeated along with their call for wider setbacks from waterways and more.
The Scarnati amendment includes a process that would allow drilling companies to request the Attorney General to review local ordinances to determine whether they allow for the reasonable development of oil and gas mineral rights, rather than the blanket exemption from regulating drilling by local governments as proposed by Governor Corbett.
In a letter to members of the General Assembly, Governor Corbett attempted to explain his reasons for the language he proposed, linking the need for consistent regulations to the need for jobs.
“Since 1984, Section 602 of the Oil and Gas Act has superseded local ordinances as they relate to oil and gas operations,” he wrote. “However, several recent court decisions have interpreted Section 602 to allow varying and inconsistent standards across the Commonwealth (Huntley & Huntley, Inc. v. Borough Council of Borough of Oakmont and Penneco Oil Company, Inc. v. County of Fayette). My proposed amendments to Section 602 of the Oil and Gas Act reaffirm and reinforce the original legislative intent of the law.
“The enactment of a reasonable, consistent and uniform set of rules across the Commonwealth as it relates to oil and gas drilling boils down to advancing our number one shared focus…jobs.
“There are job creators well down the supply chain in the Marcellus Shale industry who are waiting to see if Pennsylvania will enact predicable and uniform standards before making capital investments in the Commonwealth. I do not want to make these job creators, nor these potential capital investments, wait any longer.”
Meanwhile, as reported in “PA Environment Digest,” the PA State Association of Township Supervisors joined with the County Commissioners Association of PA, the PA State Association of Boroughs, the PA League of Cities and Municipalities, the PA Municipal Authorities Association, and the PA Association of Township Commissioners in detailing how the existing proposal would impact local governments and local communities.
In a joint memo to members of the House of Representatives, the groups made clear their opposition to the bill and also proposed revisions establishing uniform regulations while maintaining some decision-making ability at the local level.
As of this posting, the legislation was on the Senate Calendar and in position for a final vote. The House has begun considering more than 100 amendments to their version of the legislation.