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Tuesday, October 4, 2011

PA Governor Tom Corbett Fails on Impact Fees For Marcellus Shale

From the Pittsburgh Post Gazette:

Environmentalists say Corbett's shale proposal falls short
Tuesday, October 04, 2011
Environmental groups were deeply critical of Gov. Tom Corbett's proposed Marcellus Shale gas impact fee and new gas drilling regulations, saying the fee is much too low and the regulations fall well short of protecting the commonwealth's water and air resources.

Many of those groups said the governor's Marcellus Shale gas regulatory package announced Monday amounts to a giveaway of the state's resources to a gas industry making fat profits and provides no funding for critical environmental programs with statewide benefits.

Jan Jarrett, president and chief executive officer of Citizens for Pennsylvania's Future, an organization active on Marcellus issues, said the governor's proposal allows drilling companies to "pay very little for the massive profits they make from Pennsylvania's resources."

She said the impact fee "is full of loopholes, unwieldy to administer and leaves too much money on the table." One of those loopholes "lets the drillers off the hook" for repairing damages to roads and bridges caused by heavy drilling and water-hauling trucks, she said.

The governor's proposal would collect about $120 million the first year and $200 million in its sixth year.
Other legislative proposals would raise more revenue but are unlikely to gain approval because they do not have the governor's backing.

One proposal by state Rep. Thomas Murt, R-Montgomery, and state Rep. Gene DiGirolamo, R-Bucks, would raise almost a half-billion dollars in fiscal year 2014-15.

According to a news release by PennFuture, which supports the bill, it would dedicate 40 percent of that revenue to social service programs, drug and alcohol programs, economic development, workforce housing and other programs.

"Gas drilling poses a serious threat to the health of Pennsylvania's air, its water and its families, but Governor Corbett's Marcellus Shale tax proposal seems designed not to limit this threat, but to limit the state's ability to handle it," said Josh McNeil, executive director of Conservation Voters of Pennsylvania. He added that more money from drilling fees should be channeled into the state Department of Environmental Protection for enforcement.

"It's a big disappointment," said Jeff Schmidt, director of the Sierra Club Pennsylvania Chapter, of the governor's plan. "He's proposed a low-ball fee that's not going to generate nearly as much revenue as some of the other proposals under consideration by the Legislature."

The governor's proposal also falls far short, Mr. Schmidt said, because it does not include any funding for statewide environmental programs, like stream restoration, that received funding support from the state's now depleted Growing Greener program.

From 1999 through 2008, that program invested more than $190 million to create and restore wetlands and stream buffer zones, eliminate sources of non-point pollution, plug abandoned oil and gas wells, reclaim abandoned mine lands and restore mine drainage polluted streams.

The Renew Growing Greener Coalition said the governor's proposal, while helpful in strengthening some drilling regulations, falls short in offsetting the "conservation, recreation and environmental impacts that drilling will have throughout Pennsylvania."

Andrew Heath, the Growing Greener Coalition's executive director, said the governor's fee proposal too narrowly targets industry-related damages to local roadways and bridges caused by drilling trucks but ignores and doesn't provide funding for more widespread impacts to the environment.

"Consider that Marcellus development threatens our water quality by causing erosion and sedimentation of our wetlands, creeks and rivers. Moreover, pollution from spills, overflows or illegal dumping could be felt in downstream communities all the way to the Chesapeake Bay and other critical waterways," Mr. Heath said.

"Also consider that loss of access to hundreds of thousands of acres of state gamelands, forests and parks -- which are some of our most important areas for outdoor recreation including hunting, fishing, camping and hiking -- threatens our tourism industry as well as the quality of life for all Pennsylvanians."
PennEnvironment pointed out that the proposal is based in large part on the recommendations in the final report of the Governor's Marcellus Shale Advisory Commission, a panel dominated by industry interests.

"Regarding the impact fee proposal, Governor Corbett appears to be out of step with his own party, whose House and Senate members have supported proposals that include funding for critical Growing Greener-style environmental programs," said PennFuture Clean Water Advocate Erika Staaf.
She said the regulatory proposals will not adequately protect critical natural resources, noting that some have recommended a 5,000-foot buffer between wells and homes, drinking water sources and other water bodies.

"With 300, 500, and 1,000-foot setback requirements for various water bodies, the Governor's plan does not go nearly far enough," Ms. Staaf said.

Paul King, president of the Pennsylvania Environmental Council, called the governor's proposal "a good start," but said the council will push state lawmakers to provide a share of the impact fee revenue for "cumulative impacts and management of Marcellus Shale activity."
Don Hopey: dhopey@post-gazette.com or 412-263-1983.

Corbett releases Marcellus Shale oversight plan, fees
Monday, October 03, 2011
Gov. Tom Corbett unveiled his long-awaited proposal for Marcellus Shale oversight this morning, calling for a county-assessed impact fee, stronger regulatory standards, and incentives for converting vehicles to use natural gas.

Many of those policy proposals are directly from his Marcellus Shale Advisory Commission report, which that panel sent him in late July. As lawmakers and others mull the policy announcement's details, much of the attention is expected to be on the details of that fee, which the governor's office estimated would generate about $120 million the first year and as much as $200 million annually by the sixth year.

Mr. Corbett, during his visit to the Carpenters Training Center in Collier, instead preferred to focus on how he hopes the plan will encourage natural gas drillers to continue to create jobs in Pennsylvania.
"Energy equals jobs, and we sit on top of energy," he told the crowd of reporters and carpentry apprentices here.

He said those jobs will come from balancing safe gas development with assistance to an industry he described as "beyond a newborn but not yet crawling."

The safety portion includes increasing well setbacks from private water wells and public water systems; boosting bond payments and fines for those who violate operating rules; expanding the distance from a well for which a driller can be liable for environmental damage; and broadening the Department of Environmental Protection's authority to withhold or revoke permits.

While those provisions are reminiscent of the shale commission's report, his draft impact fee -- which that panel also recommended creating, though without providing specifics -- is similar to the fee proposal released this spring by Senate President Pro Tem Joe Scarnati, R-Jefferson.

Both plans would initially assess all wells within a county at a $40,000 annual fee, which would decrease each year. The governor's proposal would allow each county to set that rate, as long as it does not exceed $40,000 in year one and provided that it is not charged on a well for more than 10 years.
Unlike Mr. Scarnati's plan, it does not address differences in zoning laws or prohibit those with certain ordinances from assessing a fee.

However, counties that bans drilling would not receive any funds unless wells are drilled there, the governor noted.

Counties would retain 75 percent of those funds, splitting them among county government and municipalities. The remainder would be divided with 70 percent going to the state Department of Transportation for infrastructure projects in gas-producing counties, as well as to the Pennsylvania Emergency Management Agency, Office of State Fire Commissioner, Department of Health, Public Utility Commission, and Department of Environmental Protection.

In response to questions about his no-tax pledge, Mr. Corbett repeatedly said the proposal is a fee, not a tax, and is directed at the costs associated with drilling.

"This is a creation for a new industry that is having a clear impact on Pennsylvania, to get resources to localities, municipalities, and of course 25 percent to the state to help make that industry grow," he said.
The final plank of his plan would be to develop "green corridors" of natural gas fueling stations, with one aim that there be stations along those roadways every 50 miles. The proposal also would provide incentives to schools and mass transit systems for converting to natural gas use.

Mr. Corbett said he had not yet shown his proposal to drilling industry leaders, though one company was quick to express its support of the governor's outline.

"His proposed model is competitive and makes sense for jobs and communities," said Range Resources spokesman Matt Pitzarella in a statement. "The most important element right now is ensuring the growth remains in Pennsylvania. We're witnessing a very healthy competition for jobs between Ohio and Pennsylvania and while the gas isn't going anywhere, some of the rigs are."
Laura Olson: lolson@post-gazette.com or 717-787-4254.
Another study? It's time the governor acted on past reports
Monday, October 03, 2011
We're starting to wonder if the Corbett administration is suffering from the paralysis of analysis.

We've got nothing against careful study and a comprehensive approach to some of Pennsylvania's biggest challenges, but it seems there's a lot of waiting around going on in Harrisburg right now.
Major initiatives are on hold while Gov. Tom Corbett puts the finishing touches on his legislative agenda for transportation funding and fleshes out a proposed fee on Marcellus Shale drilling. And last week he announced the appointment of another commission, this one tasked with studying which functions now performed by state government might be better handled by the private sector.

Action on all three fronts should be further along by now, and Republicans who control both houses of the Legislature are waiting for the governor to speak first before they start moving legislation forward.
In July, the governor's Marcellus Shale Advisory Commission released a 137-page report, loaded with 98 recommendations. On the regulatory front, the state Department of Environmental Protection last month outlined structural changes to its operations, but the governor has not yet provided details on what sort of an impact fee on drilling companies he would support.

Just days before the shale report came out, the governor's Transportation Funding Advisory Commission made $2.7 billion worth of suggestions to pay for roads, bridges and mass transit by uncapping the tax on wholesale fuel and raising various vehicle and registration fees. In its final report on Aug. 1, the panel added a section warning that waiting will only make the problem more difficult to solve. Mr. Corbett has not yet said which of the panel's many recommendations he will support.
And now the governor has named another commission, to study privatization. He promised it back in March, but he promised to privatize the state liquor system long before that. There may be other functions that should be performed by private firms instead of government, but that broader look at privatization must not become a means for delay on abolishing the Liquor Control Board.

The time for studies has passed. It's time for action.

(Governor Tom Corrupt-bett has claimed that Marcellus Shale will help Pennsylvania become energy independent. Tom has his head buried somewhere where he cannot see reality. The fact is that natural gas is sold to the highest bidder. It is traded on an exchange. There is absolutely no Tom Corbett plan or PA legislative plan to keep any of this natural gas here in the state for powering our own electric grid. Tom Corbett is a bull-shitter, and fake. He does what many politicians do, which is to fabricate a false reality from frayed cloth.)


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