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Corbett unveils plan for gas fees

By Fritz Mayer
October 5, 2011

Tom Corbett has always been clear that he would not accept a tax on the soaring number of gas wells in Pennsylvania tapping into the Marcellus Shale. But he has now announced a plan that would allow counties to impose significant impact fees on gas wells.

Under a plan unveiled on October 3 at an event in Pittsburg, Corbett said that he would support an arrangement that would allow counties to impose a fee of $40,000 on each well; the fee would diminish each year with a total amount not to exceed $160,000 over 10 years.

Corbett’s plan would have the revenue from the fee split, with 75% being retained to be divided between the county and its municipalities, and 25% being divided among three agencies, with PennDOT getting the lion’s share of it, and smaller amounts going to the Pennsylvania Emergency Management Agency and the Office of State Fire Commissioner.

Corbett’s plan also called for a number of measures that would tighten safety and environmental protections, such as increasing the setback for gas wells from private water wells from 200 to 500 feet, and enabling the Department of Environmental Protection to take quicker action to revoke permits for operators who consistently violate the rules.

There will almost certainly be changes to the plan as it works its way through the Senate and House, and reaction to it was predictably mixed.

Senate President Pro Tempore Republican Joe Scarnati, who has been pushing for the imposition of a fee, said in a statement, that he is “pleased” that Corbett has weighed in with a plan, and that he “believes the final package must include a reasonable fee, increased environmental safety measures and incentives to use natural gas. Also, there will be ongoing discussions with local officials and industry representatives to ensure that there is a balanced approach to zoning so that both sides do not continue to spend resources on legal costs.”

Republican Senator Lisa Baker said, “Governor Corbett’s proposals should help push agreement and action on impact fees that will provide for better levels of community and environmental protection. Between what he presented today and what the Senate has developed over many months, there are the necessary elements for a responsible package of regulatory improvements and revenue generation.”