Pennsylvania Governor Tom Corbett

The Pennsylvania Legislature passed a bill today to institute an impact fee on Marcellus gas wells and limit the ability of municipalities to restrict gas drilling.  The House passed the bill by a vote of 101-90, mostly along party lines.  The Wall Street Journal reports:

Gov. Tom Corbett, who pushed for the legislation, praised its passage by the Republican-led House on Wednesday after a debate that stretched over two days as Democrats often angrily opposed the bill.

House Democrats argued the bill sets drilling fees too low compared with other states, goes too far in limiting the ability of local governments to zone for gas development and is too weak on environmental protections.

The gas industry’s investment in Pennsylvania politicians is paying dividends now.   From a June 2011 post on Protecting Our Waters blog:

Philadelphia Daily News reporter Will Bunch, in  “How a Natural-gas Tycoon Tapped into Corbett,” has helped reveal the tragic impact of massive gas industry campaign contributions on Pennsylvania politics (for the big picture see MarcellusMoney.org, meticulously researched up to the minute by Common Cause).   Chesapeake Energy CEO Aubrey McClendon has been bankrolling Pennsylvania’s current gas-loving governor as far back as 2004.

According to to MarcellusMoney.org, the natural gas industry gave $7,175,234 to Pennsylvania candidates and Political Action Committees (PACs) from 2000 through the end of 2010.  $3,442,212 was donated to elected officials in office as of June 2011.  Corbett raised $1,083,315 of that total in 2009-2010 from 216 donations.

Pennsylvania, Ohio and West Virginia are actively courting a steam cracker plant.   It looks like a competition between WV and PA to see which state can make the most concessions at the expense of the citizens of the state.  The impact of the US Supreme Court’s landmark Citizens United  decision which opened the door for corporate spending on political campaigns is apparent in the enthusiasm shown toward the gas industry by elected representatives in the face of severe environmental issues, and reticence on the part of  lawmakers to enact legislation protective of the citizens in shale states.

Pennsylvania Governor Tom Corbett

On Monday Governor Tom Corbett announced his proposal for new laws for the Marcellus shale industry in Pennsylvania. The complete text of the 4-page outline form proposal can be viewed here.

The proposal has already come under fire from some enviro/public health groups for being weak.  The Delaware RiverKeeper Network believes that the costs of fracking on water quality, public health and communities is too high at this time.  That group advocates for a moratorium according to a story at CBS Philly.com.

A key element of the proposal is an impact fee on gas wells starting at $40,000 per well the first year, $30,000 the second year, $20,000 the third year and $10,000 for years 4 through year 10.  That fee structure creates a ceiling of $160,000 per well.   The majority of the impact fees (75%) would be distributed at a local level.  The greatest portion of the remaining 25% would go to Penn DOT.   A small percentage is earmarked for public health work.  The proposal recommends that roughly 1% of the total impact fees go to Dept. of Health for collecting and disseminating information, preparing and conducting health care and citizen provider outreach andeducation, investigating health complaints and other activities associated with shale development (Cap at $2 million).

The proposal contains a section entitled “World Class Standards for Drilling”. Those provisions are itemized below:

• Increase well bonding from $2,000 up to $10,000
• Increase blanket bonds from $25,000 up to $250,000
• Triple well setback distance from 100 feet to 300 feet for streams, rivers, ponds andother water bodies
• Increase well setback distance from private water wells from 200 feet to 500 feet andto 1,000 feet for public drinking water systems
• Expand a gas operator’s “presumed liability” for impairing water quality from 1,000feet to 2,500 feet from a gas well, and extend the duration of presumed liability from6 months after well completion to 12 months
• Enable DEP to take action against bad actors in a more efficient manner
• Uniform and consistent statewide standards

In addition the proposal suggests that a well permit be conditioned based upon its impact on public resources like parks, wildlife areas, natural landmarks, special plant and species habitat and other resources.

Towards securing energy independence the proposal recommends development of green corridors in Pennsylvania for natural gas-fueled vehicles with convienent refueling stations.

I recommend the well-written The River Reporter story on this announcement for more details, or simply review the short proposal for complete information.   It is encouraging to see the Pennsylvania leadership recognizing that regulation is desperately needed.  Time will tell whether or not the the decision to allow the industry to work in a regulated environment will be a good decision or a risky gamble that fails in terminally polluted water supplies.  But for now, certainly, a regulated industry is far better than an unregulated industry.  Capitalism has its strengths and weaknesses;  one of the principle functions of government is to protect its citizens from the excesses of the greed of capitalism.