On Thursday, July 22, the Governor’s Marcellus Shale Advisory Commission made its recommendations official by making them public and sending the findings to the Governor. As expected, the report calls for the imposition of local impact fees, and the pooling of land that will allow drillers to extract natural gas from land without lease agreements if it’s contiguous to land that does have an agreement with a driller. Both recommendations require approval by the General Assembly.

In all, the Commission sent 96 recommendations to the governor. Some of the other highlights include the following:

  • Increasing the distance between gas well sites and streams, private wells and public water systems.
  • Posting more information online for the public.
  • Tougher civil and criminal penalties for violators.
  • Assisting PA companies to do business with natural gas industry.
  • Training Pennsylvanians to work in the industry.
  • Developing “Green Corridors” for vehicles powered by natural gas.

Allowing land to be pooled is one of the most controversial recommendations. Under it, the landowner without a lease agreement with a driller would be reimbursed the same amount as the landowner with an agreement. But Governor Tom Corbett and Senate President Joe Scranati,R-Jefferson say they oppose pooling, citing property rights. The drillers favor it, and according to sources, are likely to lobby for it when lawmakers begin debating impact fees and the other recommendations in the report when they return in September.

One House member, Matt Baker, R-Bradford, is already developing legislation that reflects some of the recommendations in the report. Baker’s district lies in the heart of the shale drilling.

"When the Oil and Gas Act was signed into law back in 1984, accessing areas such as the Marcellus Shale formation were not necessarily contemplated and neither were the technologies that are now available," Baker said. "That being said, I think now is the time to engage in legislation that updates the Oil and Gas Act to reflect today's industry methodology."

Proposed changes to the Pennsylvania Oil and Gas Act contained in Baker's legislation include:

  • Extending the operator's presumptive liability from 1,000 to 2,500 feet and extending the timeframe for when the damage was to have occurred from six months to 12 months.
  • Requiring operators to provide notice and a copy of the plat plan to the property owner, the host municipality or any municipality within 2,500 feet of the proposed well.
  • Requiring the operator to indicate on its plat plan the location of the well, well site and access roads.
  • Increasing the mandatory distance restriction between a natural gas well and private water wells; public water supply; and streams, ponds and other bodies of water.
  • Requiring comprehensive tracking of hydraulic fracturing waste from water withdrawal to disposal at high-volume wells.
  • Increasing penalties for violations by well operators.
  • Increasing the civil and criminal penalties currently in the Oil and Gas Act.
  • Providing the Department of Environmental Protection (DEP) with the authority to enter into contracts with well control specialists to provide proper response in the event of a well control emergency.
  • Holding harmless well control specialists from damages arising from their emergency well control actions, unless proven the action was due to negligence.
  • Requiring DEP to post and provide regular updates of well inspection reports through an Internetbased reporting system.

Both the committee and floor debate on Baker’s and other legislative proposals will be long, and at times bitter, caucus sources predict. Regarding the impact fee alone, members must decide the amount of the fee per well; whether the fee declines as the well ages; if the local governments receive all the funds; or the funds are split between local governments and environmental programs. Moreover, some members are still not sold on approving a fee.

“We still have plenty of members in our caucus who oppose any kind of fee,” said one House Republican staffer. “They look at the jobs being created, the corporate and personal taxes already being paid, and the work a lot of the drillers are already doing on infrastructure and feel that’s more than enough.”

Along the lines, the House Republican Caucus is likely to call for hearings on the impact of shale drilling when members return to Harrisburg in September. Those hearings along could eat up a chunk of time that lawmakers plan to be in in the Fall. As of this writing, lawmakers are scheduled to be in session 26 days, starting September 26 and ending December 14.