Jay Costa's Pennsylvania Matters

This week Governor Corbett unveiled his Marcellus Shale Impact Fee proposal. While I am pleased that the governor has begun talking about the importance of creating jobs for Pennsylvania workers, I am concerned that the plan falls short.

The money that would be spent on environmental protection and oversight is lacking. Layered on budget reductions which have already been imposed on the agency tasked with protecting Pennsylvania's environment, the share allocated for environmental enforcement, protection and clean-up is woefully inadequate. In addition to creating jobs, we must protect our drinking water and our land.

Twenty-five percent of fee revenue would be allocated statewide under the governor's plan. Of that, the governor seeks to channel just over ten percent of that to the Department of Environmental Protection. Corbett’s proposal would direct the money to the restricted account for plugging of abandoned and orphaned oil and gas legacy wells and administration of enforcement of oil and gas program and other permits related to natural gas development.

There are also potentially negative consequences of the governor’s proposal to allow counties to determine the fee rate and distribute the revenue. I, along with many of my colleagues, fear it will result in a fragmented and inconsistent swath of communities with different tax rates. That translates into a patchwork of 'have and have-not' communities across Pennsylvania.

His plan also overlooks countless communities that have road, water system, and other infrastructure demands placed upon them. We can’t easily develop 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.

The way money would be allocated for transportation also lets the natural gas companies off the hook for road repairs and maintenance – a commitment they are currently making in the communities where they drill. The governor’s impact fee proposal would send 75% of fee revenue to local municipalities where drilling occurs and 25% to the state. PennDOT would receive 70% of the state’s 25% to assist in road maintenance in host and surrounding communities only. 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. We can’t let these multi-million dollar companies forego their obligation to repair the wear-and-tear on roads and infrastructure just because an impact fee has been imposed.

      Pennsylvanians is sitting on one of the largest energy reserves in the country, and all citizens should benefit from the sale of natural gas extracted from the Marcellus Shale. Right now, we are the only major natural gas producing state that does not impose some kind of severance tax. (To see a comparison, click here.) The natural gas companies are making lucrative profits, and they must not be given a free pass.

      I was pleased that the governor singled out community colleges and other state-related and state-system universities for their vital role in developing the industry and preparing Pennsylvania’s workforce. I hope when all is said and done, we do indeed see a very active role from these institutions. They took a significant hit in this year's budget, but their potential impact on our economy is greater than ever. As the natural gas industry grows, they should grow and benefit as well.

Click here to see an overview of the governor’s Marcellus Shale Impact Fee Plan.

Click here to see a comparison between the governor's Marcellus Shale plan and one proposed by the Senate Democrats.

Former DEP Secretary Dave Hess also weighed in with an informative piece about the Corbett proposal. Click here to read

In the News: Gov. Corbett's Marcellus Shale Plan

Don't forget that the first of my upcoming Town Hall Meetings will take place this coming Monday, October 10th at 6:30 p.m. I hope you can make it. Another Town Hall Meeting has been scheduled for Thursday, November 3 (click here for more information).

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Corbett Shale Policy Fails to Adequately Address Needs of Citizens, Communities, & Environment

In the News: Gov. Corbett's Marcellus Shale Plan

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