A Pennsylvania Senate Republican “impact fee” on natural gas drilling in the Marcellus Shale is now out in the open, weeks after its outline was first introduced.
The bill distributes money from the $10,000-per-well fee to counties and municipalities based on the number of drilling sites they’re hosting. That means counties such as Bradford, with 131 Marcellus Shale wells, would reap much more revenue than Elk, which hosts five. Of the money designated for local governments, 36 percent goes to counties, 37 percent to municipalities hosting wells, and–here’s a mouthful–municipalities located within drilling counties but don’t have any wells themselves would see 27 percent.
About 60 cents of every dollar would go to counties and municipalities. The rest would be deposited into a grant program administered by the Commonwealth Financing Authority, and used for environmental cleanup and infrastructure repair projects across Pennsylvania. Relatively small amounts of the fee’s revenue would also be designated for county conversation projects, the Motor License Fund, and the Hazardous Sites Cleanup Fund.
Senate President Pro Tem Joe Scarnati’s bill requires local governments to use the money for infrastructure repairs, environmental efforts, and to fund their emergency response units and water treatment systems. Counties and municipalities could also, however, direct the money toward property tax rebates. The Republican’s chief of staff, Drew Crompton, said that’s a concession to the fact that drilling is changing the culture of rural communities.
“We see most of that impact as a positive thing. But there is a negative side for those individuals that live in those districts. They are constantly behind water trucks and different deliveries. Noise is different. In some cases, even dust,” he said. “It has impacted their way of life. And therefore, to account for that, we thought it was reasonable to try to incorporate a different approach, to some degree. And that is to allow counties and municipalities, if they so choose, to lower property taxes.”
Drilling executives who don’t pay a fee to the Public Utilities Commission, or who falsify their annual reports, would be subject to crimes and civil penalties. Initial slip-ups could lead to summary offenses. Repeat violators could be charged with misdemeanors, and face up to a year in prison.
“I don’t believe that they’re going to be needed, in probably most, if not all cases,” said Crompton. “But if there’s a rare bad actor, they’ll be subject to misdemeanors in the bill. I think more likely it will be civil enforcements.”
Crompton said Scarnati is hoping for a Senate vote on the measure “within a couple weeks,” and maintains his insistence that a fee be part of next month’s final budget package. The Republicans are hoping the legislation gains support of Democrats and environmentalists, now that it’s in the open. “There are still too many people, in our opinion, who are clinging on to this idea of a Marcellus tax. It’s time, in our opinion, to give up that ghost,” he said. “The governor’s not going to sign it. [I’m] not even sure it will pass either body.”
“It’s either this, or four years of waiting,” he added.