Marcellus shale report released

BY ROBERT SWIFT, Times-Shamrock Writer

Recommendations to levy a local impact fee on natural gas drillers and encourage gas drilling pooling highlight a report released July 22 by a special state commission to guide development of the deep gas reserves in the Marcellus Shale formation.

The governor’s Marcellus Shale Advisory Commission completed four months of work by posting a 137-page report online that offers nearly 100 recommendations in areas covering economic development, impact on local communities, environmental protection, public health and safety and infrastructure.

Whether the recommendations will be carried out or not is in the hands of Gov. Tom Corbett, state regulatory agencies and lawmakers. Mr. Corbett created the commission in March to outline a comprehensive strategy to develop Marcellus Shale as an “economic cornerstone,” but he scheduled no public appearance Friday to discuss the report on its due date.

One of the report’s most closely watched recommendations is for a generic impact fee on drillers to cover the uncompensated costs that local governments face due to drilling operations. The commission left key details such as a fee structure to others. Enacting impact fee legislation is one of the top legislative priorities this fall.

“The imposition of any fee should be accompanied by appropriate statutory changes to ensure fair and consistent municipal regulation, which does not unreasonably impede the development of natural gas. Any fee should include a correlation between the amount of the fee and costs incurred,” the report said.

The report suggests 13 areas that impact fee revenue should be directed toward, including police and fire protection, public water and sewer extensions, community projects to protect land, water resources, wildlife and outdoor recreation; increased demand on social services such as housing, domestic relations, drug and alcohol assistance and education; public health evaluation, state natural resource agency oversight, permit review and enforcement and environmental remediation. Not mentioned is the state Growing Greener program, an umbrella for environmental initiatives that is running out of money.

Other key recommendations include:

*Update a long-standing state energy conservation law that encourages pooling of neighboring gas deposits for shallow gas drilling to include several deep gas formations.

*Include natural gas as a Tier 2 alternative fuel source under the state Alternative Energy Portfolio Standards Act. This law requires utilities to purchase 18 percent of their power from cleaner or alternative fuel sources by 2020.

*Enact a law to establish construction standards for new private water wells. Pennsylvania remains one of a handful of states without statewide private well construction standards, the report said.

*Encourage use of non-freshwater sources in drilling operations by passing legislation to give drillers immunity from environmental liability for use of acid mine drainage water from abandoned coal mines.

The report contains some recommendations adopted by a majority of commission members after alternatives were rejected.

For example, the report said future leasing of state forest land for drilling should “result in no or minimal surface impact to commonwealth-owned land, and prohibits surface disturbance in high conservation value forests and other ecologically important areas.”

The commission voted down an amendment to halt future drilling on forest land.

Also in the report are recommendations to increase the distance between gas wells and private water wells, streams and public water systems.

“These recommendations contain tough, new measures aimed at protecting the commonwealth’s environment and conserving our precious natural resources,” said Lt. Gov. Jim Cawley, the commission chairman. “We also detail ways to promote the use of natural gas and its by-products to help maximize the economic potential of this resource.”

Four representatives of environmental groups on the commission said recommendations to improve protection of endangered species and ecological areas and improve siting of gas pipelines are welcome. Yet, they voiced concern about making natural gas a Tier 2 alternative energy source and not tying environmental standards to the gas pooling recommendation.

The groups are the Chesapeake Bay Foundation, Pennsylvania Environmental Council, the Nature Conservancy and Western Pennsylvania Conservancy.

During a final commission meeting a week ago, many members observed their recommendations would undoubtedly be altered during the legislative process.

Lawmakers were quick to respond to the report.

“I’m very disappointed in the commission suggesting the impact fee be only local,” said Sen. John Yudichak, D-14, Nanticoke, ranking Democrat on the Senate Environmental Resources and Energy Committee, after being briefed on the report. He has sponsored an impact fee bill that provides some revenue for state environmental programs.

Both  Mr. Yudichak and Senate President Pro Tempore Joseph Scarnati, R-25, Jefferson County, said including a pooling provision would be a deal-breaker for efforts to pass impact fee legislation.

House Minority Leader Frank Dermody, D-33, Pittsburgh, touted a new caucus proposal to levy a state severance tax on natural gas production with revenue going to local governments in drilling areas, water plants that treat drilling wastewater, a road and bridge fund and to support Growing Greener.

“The governor’s Marcellus Shale Advisory Commission seems to have left a lot of loose ends,” said Mr. Dermody.