In the fall session, state lawmakers are almost certain to consider legislation that imposes a fee on natural gas drillers. But two key issues are still up in the air: the amount of the fee and who receives the funds.
“We knew when we amended and approved our version of the fee structure it was only a first step,” said Adam Pankake, executive director of the Senate Environmental Resources & Energy Committee. “I’m sure the plan will be to work on the proposal this summer and have something ready for the fall.”
Fueling the summer discussions will be a study, scheduled for release on July 22, that will outline the impact the shale drilling has on local roads, water systems and other infrastructure.
Governor Corbett has said he would consider no legislation until the study from his Marcellus Shale Advisory Commission is released.
“The bottom line is that we knew it was senseless to send the Governor anything until he was at the table in the negotiations,” said one House staffer. “And he wasn’t going to be there until he had a chance to review the studies of his own commission.”
The Senate legislation, SB 1100, would place a flat fee on each well, a fee that would decrease as the well ages. The host local governments and state-level environmental funds would receive the funds. The bill awaits action in the Senate Appropriations Committee.
On the House side, a proposal gaining some early traction would send all the money raised through the fees – $50,000 per well the first year and decreasing after that – to the host counties, townships and boroughs. State-level environment programs would receive additional funding from the Oil and Gas Lease Fund, which is in turn is funded by lease and royalty money from wells on state land.
“The balance in the Oil and Gas fund will explode as more and more wells are drilled,” said a staffer with state Rep. Dave Reed, R-Indiana, who sponsored the legislation. “There will be more than enough there to fund the environmental programs.”
One industry lobbyist said that by directing all the impact fee money to local governments you avoid criticism that you’re raising taxes to benefit state programs.
The same lobbyist said that they are “okay” with a fee provided it lessens as a well ages.
“The local impact falls off as the well ages because you just don’t have the same level of activity,” said the lobbyist who did not want to be identified. “If the impact falls off, the fee should as well.