A blog post from Michael Wood, originally published on Third and State.
Pennsylvania state Senator Joe Scarnati’s legislation to enact a Marcellus Shale gas drilling fee was amended and voted out of the Senate Environmental Resources and Energy Committee by unanimous votes Tuesday.
Unfortunately, the amendment offered by committee chair, state Senator Mary Jo White (R-Venango), makes an already weak bill a lot weaker.
The revised bill significantly reduces the fee paid by wells from what was proposed by Senator Scarnati (R-Jefferson) and limits the assessments to the first 10 years of well production.
Our initial analysis indicates the bill would set the effective rate of the fee over the 40-year life of a well to about 1%. This is significantly lower than any other drilling tax or fee plans in the General Assembly. Senator Scarnati’s original fee structure carried an effective rate of 3.1%.
The bill lets the drillers off the hook, with a tiny tax that provides no funding for schools, colleges, health care or human services. It provides little to no funding for the state to finance responsible oversight of well drilling, let alone funding for clean air and water.
Meanwhile, the General Assembly is poised to adopt a budget that will make large cuts to education, continue underfunding human services, raise college tuition costs and reduce services for people who are vulnerable.
The revised bill narrowly defines the types of environmental and conservation investments that can be made. Senator White’s amendment specifically prohibits local governments from using fee revenue for environmental programs, trails, parks, open space, flood plain management, conservation districts, and agricultural preservation.
A drilling tax should help to compensate local governments for drilling-related costs, but the revised bill keeps a provision in the original plan permitting funds to be used for property tax reductions in drilling counties, including communities that don’t have a single active well. The revised bill also keeps a provision that holds local governments hostage by requiring them to adopt a standard zoning ordinance in order to access funding.
The good news is that the bill will now move to the floor of the Senate, where it can be improved with further amendments. As Jan Jarrett writes at the PennFuture blog, several Environmental Resources and Energy Committee members, including state Senators Ted Erickson (R-Delaware), Lisa Baker (R-Luzerne), John Yudichak (D-Luzerne) and Andy Dinniman (D-Chester), voted to move the bill forward but had serious concerns about it and promised to introduce amendments on the Senate floor.
“Their concerns covered the amount of revenue that would be raised, the lack of support for Growing Greener, restrictive model ordinance language and the failure to address statewide impacts of drilling,” Jan wrote. “The floor debate should be interesting.”
With little benefit from this fee going to parts of the state outside the Marcellus Shale, it will be particularly interesting to see what position senators in non-drilling communities take. Stay tuned.