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Marcellus Shale Report Released to Public


     The governor’s Marcellus Shale Advisory Commission released its final report to the public today. I have highlighted some of the recommendations of the commission below. I have also included a link to the report in its entirety.

     Over the next several months, I will continue our push in the legislature to impose a fair severance fee on Marcellus Shale drilling. It is my goal to ensure that this issue remains priority number one as we begin our legislative session in the fall.

Commission Report:

  • Authorization to impose a fee for the purpose of mitigating and offsetting the uncompensated portion of impacts from shale gas drilling
  • Lists several types of local impacts that commission members found during their review of the state's oversight and assistance to the natural gas industry. They include public safety and environmental remediation. The end of the report includes some cost estimates that the commission received from local officials, but it does not include any direction on how much should be charged or how it should be assessed over time.
  • States that "any fee should include a correlation between the amount of the fee and costs incurred; should recognize the ongoing nature of certain impacts; and should be done in a manner that does not discourage maintaining or expanding partnerships between well operators and local communities."
  • Suggests that Pennsylvania "modernize" its conservation law, which seeks to ensure that drilling is done in a way that most efficiently removes the gas. In order for that to happen, resources at a certain depth below the Marcellus Shale can be "pooled."
  • The Commonwealth should designate a state agency to create a “One-Stop” permitting process while expanding the use of General Permits to authorize routine development activities, as well as maintain jurisdiction over multi-county linear pipeline projects and ensure appropriate notifications have been made to local jurisdictions.
  • DEP should ensure that natural gas construction activities are required to meet the same standards as general construction activities.
  • Pennsylvania should pursue existing opportunities which seek to locate a gas safety inspector training facility within the Commonwealth.
  • Civil penalties for violations of the Oil and Gas Act should be increased from $25,000 to $50,000 and the daily penalty should be increased from $1000/day to $2,000/day.

     In all, the 100-plus-page-report contains 96 recommendations. I will be looking closely at the report and will take it into consideration when pursuing energy policy in the Senate, but I feel that there are many more specifics that need to be addressed.

Highmark and UPMC Need to Negotiate in the Interest of Those Who Rely on the Care and Services They Provide

Senate Democratic Leader Jay Costa talks with Becky Abrams, director of the Squirrel Hill Community Food Pantry, and state Rep. Dan Frankel

     Protecting access to good health care for residents is a top concern for regional lawmakers. This week leaders and members of the General Assembly urged Highmark and UPMC to get back to the bargaining table.

     House Democratic Leader Frank Dermody (D-Allegheny County), House Majority Leader Mike Turzai (R-Allegheny County), and I were joined by several other members in the Allegheny County Courthouse to discuss the dispute between the two health care agencies.

     We announced a formal letter we have sent to the two entities to sit down with legislators to discuss the status of negotiations. Hearings will be held by the Senate Banking and Insurance Committee to determine what, if any, legislative or regulatory remedy is available.
UPMC is the region’s largest hospital and doctor network. Highmark controls 65 percent of the region’s health insurance market in western Pennsylvania, extending from the Pittsburgh region up north to the Erie area.

     UPMC and Highmark are in the last year of a 10-year provider agreement, which allows Highmark members to see UPMC doctors and use UPMC hospitals; the contract ends June 30, 2012. Negotiations for a new contract broke off when Highmark began considering acquiring the financially troubled West Penn Allegheny Health System, a major UPMC competitor (West Penn Allegheny is the Pittsburgh region’s second largest hospital network).

     Highmark has since reached a preliminary agreement to buy West Penn Allegheny, which prompted UPMC to end talks and open its network to other commercial insurance carriers. If Highmark and UPMC do not reach an agreement, 2,700 UPMC doctors and affiliated hospitals will become out-of-network providers to approximately 3 million Highmark subscribers. Out-of-network fees are generally much higher than in-network doctors and hospitals, increasing out-of-pocket expenses for consumers.

     We want to make certain the public’s interest is being served by these two major players in delivering health care to Western Pennsylvania. The public clearly won’t be served if health care access is limited, restricted, or disrupted in any way. That must be avoided. No matter where people seek care — Hillman Cancer Center, West Penn Burn Center, Magee-Women’s Hospital or any of the other institutions that are so heavily relied upon – the public needs to be assured that the high level of care they have received in the past will not be impacted.

     I will continue to keep you posted on this continuously-evolving situation.

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