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Battle Lines Forming on Corbett Marcellus Proposal

By Natalka Karaman, Contributing Writer

Scenes from a Marcellus rally in Philadelphia, Sept. 2011

Governor Tom Corbett announced his proposal for Marcellus shale gas drilling legislation yesterday, and reactions have been strong.

Some congratulated Corbett’s resistance to impose a statewide severance tax on gas extraction. Others warned of necessary improvements that should be made to the plan.  Democrats and environmental groups lamented that the plan fell short of their policy goals, while Republicans and those in the gas industry applauded the effort.

The legislative outlook for the plan is about as difficult to figure out as the long-term impacts of drilling.

Perhaps the most interesting news is that Corbett’s proposal may not face an easy path among PA House Republicans. The PA Independent reported that about 30 PA Reps, mostly from southeast PA, are threatening to oppose the measure on the grounds that the statewide portion of revenue is insufficient.

“A GOP source tells us there are several members of the House caucus who oppose Corbett’s #Marcellus plan, but don’t want to go public yet,” PA Independent tweeted. “Those members are waiting to see if leadership (perhaps Adolph or Vereb) publicly oppose the bill. If so, about 30 members will join them.”

Supportive reactions:

PA Senate Pro Tempore Joe Scarnati (R-Jefferson):

“It was vital that the Governor weighed in on his recommendations for regulating and overseeing the Marcellus Shale industry,” Scarnati stated.  “There seems to be general agreement among all parties involved that there needs to be an impact fee that will not only assist local communities affected by drilling activities, but fund important related statewide environmental programs as well.”

Commonwealth Foundation President and CEO, Matthew J. Brouillette:

“By making it optional for counties to impose any additional fees on natural gas job creators, Gov. Corbett keeps his pledge not to raise taxes while ensuring the natural gas industry continues to pay for its impacts on local government.”

While there is room for improvement within the proposal, the free-market think tank applauded the plan for providing appropriate parameters for the legislative discussion over the coming weeks.

Marcellus Shale Coalition President and Executive Director, Kathryn Z. Klaber:

“Pennsylvanians are realizing the countless benefits – more affordable energy costs, environmental advantages of increased natural gas use, economic revival of so many communities – tied to responsible natural gas development, and Governor Corbett’s plan announced today should build upon this momentum, in all corners of the Commonwealth, for years to come.”

“The governor’s plan – and its foundation that ‘energy equals jobs’ – reminds us that the most significant and long-term benefits of clean-burning natural gas will be achieved only through competitive policies that allow the industry to flourish in the Commonwealth and relentlessly protect our shared environment.”

Critical reactions:

State Senate Democratic Leader, Jay Costa (D-Allegheny):

“I am very concerned by the way money is being allocated for transportation. As I have said repeatedly in the past, road repairs have been and should remain the responsibility of the drilling companies. Imposing an impact fee shouldn’t relieve them of this responsibility.”

“The utter lack of funds going toward environmental protection is also a concern. This meager amount — layered on budget reductions which have already been imposed on the agency tasked with protecting Pennsylvania while this industry grows at breakneck pace — is severely lacking. We only get one shot at this – and if we don’t protect our water and our land, then we have learned nothing from our history.”

Senate Democratic Appropriations Chairman, Vincent Hughes (D-Philadelphia/Montgomery):

“While I respect the governor for finally recognizing that job creation must be our top priority and for bringing job training into the public discussion, we need to be clear on one thing: all Pennsylvanians must benefit.”

“That doesn’t happen under the governor’s proposed plan. There was entirely too much focus on the industry, and what the industry needs to create jobs. The governor said today that Pennsylvania is sitting on the second largest energy reserve in the country. The gas companies aren’t going anywhere.”

Senate Environmental Resource and Energy Committee Democratic Chairman John Yudichak (D-Luzerne/Carbon/Monroe):

“The governor’s county-assessed fee approach will create a fragmented patch work of ‘have and have-not’ communities across Pennsylvania.  It completely overlooks countless communities across Pennsylvania that have road, water system, and other infrastructure demands placed upon them.” said Yudichak.

“We do not apply this type of ‘point of origin’ revenue standard to any other industry whether its gaming, landfills or our corporate tax structure.  If the governor truly believes in this industry’s potential to create jobs and revitalize our economy, he must realize we need a strong statewide job’s policy — not a limited county-by-county jobs policy. How can you develop a secondary markets for natural gas in Pennsylvania like power generation and natural gas vehicles if the bulk of the money only goes to those counties that host a Marcellus Shale rig?”

State Rep. Greg Vitali, (D-Delaware):

“It’s an early Christmas present for the drilling industry and I will not be voting for this plan,” Vitali said.

“We need more revenue that is fairly distributed to scale back the cuts in basic education, higher education and health care.”

Vitali said Corbett’s plan is particularly unfair to southeastern Pennsylvania, which supplies huge amounts of money to the general fund through income and sales taxes and other revenue sources.

“Tax revenue from southeast Pennsylvania benefits the entire state,” Vitali said. “It’s only fair that revenue from a Marcellus impact fee be shared throughout the entire state.”

PennFuture’s president and CEO, Jan Jarrett:

“This plan is neither fair nor comprehensive, and is full of giveaways to the drillers,”

“The proposed impact fee is too small, full of loopholes, unwieldy to administer, and leaves too much money on the table,” continued Jarrett. “It also fails to address the serious needs our citizens and communities face in these hard economic times, and allows the drillers to pay very little in return for the massive profits they make from Pennsylvania’s resources.

“This plan shortchanges the environment by refusing to direct money to Growing Greener,” said Jarrett.

Renew Growing Greener Coalition, Executive Director Andrew Heath:

“The Coalition is pleased that the Governor has come to realize there should be an impact fee on Marcellus Shale drilling and that he will strengthen certain regulations to protect Pennsylvania’s environment from the dangers of natural gas drilling.”

“Unfortunately, however, the Governor’s proposal falls short of what is necessary to offset the conservation, recreation and environmental impacts that drilling will have throughout Pennsylvania. Though the Governor says all the revenue should be used for industry-related impacts, he ignores the fact that these impacts extend far beyond local communities.”

2 Responses

  1. this is most definitely NOT a plan-it merely passes the whole mess down to the county level where the local machines and their staffs have absolutely no expertise or ability to exercise oversight.And the bribes can probably be smaller, too.

  2. “the long-term impacts of drilling” are pollution and higher cancer rates. That wasn’t so difficult to figure out.

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