June 2, 2011 —
Since we’ve been arguing for some time in favor of natural gas severance taxes for New York and Pennsylvania, you’d think we’d be delighted with a new bill introduced in the Pennsylvania Senate, SB 1100 ( tinyurl.com/5rpzv2q  ), which would collect impact fees on production from unconventional gas wells.
Impact fees are not quite the same as a severance tax.In the latter case, the revenues go to the state, whereas impact fees go directly to conservation districts, towns and counties according to a formula spelled out in the legislation. If anything, you’d think that would be even better than a severance tax—and so it might be, as far as distribution goes. The purposes for which the funds could be used range from remediation of damage caused by drilling (e.g. preservation and reclamation of surface and subsurface waters and water supplies) to the totally unrelated (e.g. tax reductions—if you smell a bribe on this one, read on: you may be right.)
So what’s not to like?
The relief offered by the fee system comes as part of a devil’s bargain: towns will only be eligible to participate in the program if they adopt zoning ordinances that are no more stringent than a model ordinance specified by the legislation. SB 1100 sponsor Senator Joe Scarnati (R) omitted this caveat in his press release announcing the bill, and we don’t blame him, given the template ordinance’s principal provisions. It would authorize oil and gas development as a permitted use by right in all zoning districts except residential districts; allow oil and gas development in residential zoning districts by conditional use or special exception; allow compressor stations by right in all agricultural, industrial and commercial districts and as a conditional use in all other districts. Yup, that’s right, you could have your very own neighborhood compressor station. The model ordinance would also limit the towns’ abilities to impose restrictions on noise, lights, hours of operation, security fencing and the like.
Anyone care to make any bets on how many lobbyists spent how many hours helping to draft this bill?
Remember that in Pennsylvania, townships do not have the option to ban natural gas drilling in all zones. That means that any township that wants to have more protection than the model ordinance provides may still be forced to have drilling, and its effects, within its borders. And given the nature of the activity, the water, air and roads all over the township can be affected by operations that take place in only one or two zones. In the same way, if such a township lies adjacent to another that has adopted the model ordinance, it would suffer environmental and infrastructure consequences created by its neighbor, while being unable to get any compensation.
In short, in this bill the state and its industry cronies are asking townships to give up their right to control land use in exchange for money.
So what’s wrong with that, if the money is adequate to remediate any damage done by the drilling? First, it’s not clear how much money will actually be available. At a minimum, anyone even thinking of passing this bill would need to do an analysis to show how much revenue is likely to be raised and compare it to some projection of the cost of damages.
But more importantly, there is a lot of damage that can’t be fixed by money, especially if drilling were allowed indiscriminately all over the landscape as the model ordinance would allow. As we have noted in previous editorials, aquifers once damaged can generally not be restored. The resulting impact on property values in the long term would be devastating. Air pollution from substances such as benzene is linked to a high incidence of diseases like cancer; what amount of money could compensate for that, even if the bill specified that the fees could be used for such a purpose? (It doesn’t.) And what value—or system of compensation—can you put on the destruction of neighborhood character, or the elimination of biodiversity, or the devastation of tourist-related businesses?
This bill is a strong-arm tactic to elbow local input aside and see to it that the guiding principle of land-use decisions in Pennsylvania becomes making the biggest profits for the gas companies—all under the guise of a generous giveaway to the people. Don’t fall for it.
The impact fee idea is probably a good one; the extortion tactic of the model ordinance is unconscionable. SB 1100 has been referred to the Environmental Resources and Energy Committee, on which Senator Lisa Baker (R-20) sits. You might want to get in touch with her (570/675-3931) and tell her that this one needs to be strangled in its cradle.