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.”
Senate Democratic Leader Jay Costa, on the other hand, said, “The utter lack of funds going toward environmental protection is also a concern. This meager amount, layered on budget reductions, which have already been imposed on the agency tasked with protecting Pennsylvania while this industry grows at breakneck pace, is severely lacking. We only get one shot at this—and if we don’t protect our water and our land, then we have learned nothing from our history.”
That concern was echoed by Jan Jarrett, the president of the environmental group PennFuture, who found additional faults with the plan. She said, “This plan is neither fair nor comprehensive, and is full of giveaways to the drillers. The proposed impact fee is too small, full of loopholes, unwieldy to administer, and leaves too much money on the table.”
Jarrett continued, “It also fails to address the serious needs our citizens and communities face in these hard economic times, and allows the drillers to pay very little in return for the massive profits they make from Pennsylvania’s resources.”