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Tuesday, June 14, 2011

Pennsylvania Approves Revised Drilling Fees

State Senate panel approves revised drilling fees
Tuesday, June 14, 2011
HARRISBURG -- A state Senate panel this morning unanimously approved a drilling impact fee, amid changes to the amount of that levy and comments from legislators that there are still more adjustments that they'd like to see.

Under the revised version, drillers would be assessed an initial per-well fee of $40,000, which would drop annually to a $10,000 fee in years four through 10. Most of the funding still would be reserved for local governments, though $1 million would be set aside for training emergency responders.

Sen. Mary Jo White, who chairs the Environmental Resources and Energy Committee that approved the measure, said her amendment was intended to change what she viewed as a severance tax into a fee to mitigate drilling impacts. The original proposal from Senate President Pro Tem Joe Scarnati, R-Jefferson, would have assessed a $10,000 base fee, which would change based on natural gas prices and production levels.

Gov. Tom Corbett has pledged not to sign off on any new tax or levy hikes, and opposes a gas severance tax. He has said he would consider a drilling impact fee that does not go to the state's general operating budget, but that he wants a recommendation from his Marcellus Shale Advisory Commission on the need for such a fee.

(blogger note: This advisory commission is made up of many energy insiders, and pro-MS industry heavy hitters. The governor should be speaking to the very community leaders who are heavily impacted by this industry and not those who have money to be made by it.)

After the committee vote, Mr. Scarnati said he supports the panel moving the measure forward. He has pushed for approving a fee with the state budget this month, and noted that such a plan could be included in any of the budget measures.

More changes will be needed to gain support by that June 30 deadline. Though this morning's vote was unanimous, many on the panel expressed concerns about parts of the legislation.

Lawmakers from both parties said they do not support a provision to create a model ordinance, which local government could not "exceed" without forfeiting any fees it might be eligible to receive. Others said the final measure should take into account impacts on the southeastern part of the state, through which pipelines must pass to transport gas to market.

The measure now awaits consideration by the full Senate.

Laura Olson: lolson@post-gazette.com or 717-787-4254.

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