HARRISBURG – State Rep. Camille “Bud” George, D-74 of Clearfield County, said that state Senate President Pro Tempore Joseph Scarnati’s proposed “local impact fee” on Marcellus shale gas drillers is a welcome first step toward fairness for Pennsylvania taxpayers.
“Acknowledgement by Senate GOP leadership that the Marcellus industry must step to the plate to address its gas-extraction responsibilities is an overdue but needed step in the process,” said George, Democratic chair of the House Environmental Resources and Energy Committee. “At least now we can move past the boilerplate refusal to consider fair fees.
“What we see today from Sen. Scarnati contains promising aspects,” George said. “However, I have deep concerns with the funding levels, potential intrusion on local control and the mechanisms that would be employed to implement the policies.”
Scarnati’s plan provides a base $10,000 fee per Marcellus well, with mechanisms in place for the fee to be raised depending on the life of the well and the price of natural gas. An estimated $121.2 million in fees would be collected by March 1, 2012, including a retroactive $45 million generated from wells drilled in 2010.
Most of the revenues would be distributed to local governments through a Local Services Fund, with smaller portions of the fee distributed to county conservation districts and statewide environmental and infrastructure impacts.
“Several key parts of this bill are very similar to my severance tax proposal,” George said. “My House Bill 833, the Natural Gas Severance Tax Act, allocates a majority of the funding to local governments, with the rest being distributed to infrastructure and environmental programs and efforts.
“Both of our measures do not send money to the General Fund,” George said. “Unfortunately, most similarities end there.”
George questioned the ability and suitability of the Pennsylvania Public Utility Commission crafting a model zoning ordinance that local governments could not exceed and still receive local impact fees. The proposal also calls on the PUC to collect and distribute the revenues.
“This could be outright scary, and I’ve yet to deduce what qualifies the PUC to write local zoning ordinances for drilling,” George said. “The Oil and Gas Act already outlines to what extent local governments can regulate gas drilling.”
George said funding for environmental cleanups falls short of what is needed, and funneling it through the Commonwealth Financing Authority seemingly could expose it to political wheeling and dealing.
“When the bill is introduced and I can see the actual language, I will provide more information,” George said. “I hope to provide a comprehensive comparison of Sen. Scarnati’s impact fee versus my House Bill 833 severance tax.
“Overall, I think this could be a positive beginning to the end of Pennsylvania taxpayers bearing the brunt of the risks and costs of Marcellus shale gas extraction.”
