DCNR Does Not Expect Another Marcellus Shale Windfall

Department of Conservation and Natural Resources Secretary Michael DiBerardinis told the House Appropriations Committee today not to expect another windfall from leasing state forest lands for drilling Marcellus Shale natural gas wells.
Appearing with the Secretary at the House heairng were Linda McKenna Boxx, president of the Allegheny Trail Alliance and the McKenna Foundation and Bob Griffith from the PA Recreation and Parks Society.
Secretary DiBerardinis said leasing rates have declined from $2,500 per acre to $1,000 or less. He said the $190 million DCNR received from leasing 74,000 acres of state forest land last year hit the peak of the natural gas market.
Gov. Rendell proposed to transfer $174 million in these revenues from DCNR's Oil and Gas Lease Fund to help plug the hole in the General Fund budget. Secretary DiBerardinis said, contrary to earlier reports, legislative authority is needed to transfer the funds as part of the state budget bill.
Secretary DiBerardinis said he was not happy about having the funding transfer, but he understands the need to help balance the state's budget.
DCNR is preparing another lease offering for Marcellus Shale for this year.
The Secretary also said the agency has lost significant revenues from leasing timber from state lands due to the collapse of the timber market. Even though the agency is offering the same amount of timber for sale, the revenue from the sales has declined by two-thirds.
Other issues arising at the hearings include:
-- Federal Stimulus: DCNR expects to receive some funding from the federal economic stimulus package, but the amounts are not yet clearly known. The areas of funding may include: support from the U.S. Forest Service, funding for floodplain land easement purchases from N.R.C.S. and funding from the U.S. Corps of Engineers for jointly owned/operated facilities.
-- Cuts In Service: DCNR said the public will notice cuts in services at State Parks as a result of budget cuts, but no park closures. Cleaning restrooms, closing some park services and reducing some environmental education programs were examples pointed to by DCNR, but no final decisions have been made yet.
-- Heritage Area Grants: DCNR said even though these grants have been zeroed out, they have encouraged Heritage Areas to apply for funding in other remaining DCNR grant programs.
-- Lifeguards: DCNR said the decision to not provide lifeguards through its Open Swim Program at many State Parks is not a budget decision, but the result of the lack of success the agency has had in hiring a sufficient number of lifeguards. They said it was an issue faced by every recreation agency across the country.
-- User Fees: DCNR expects to propose fee increases and reap the benefits of fees it raised last year to generate an additional $1 million in income for the agency.
-- PNDI Permit Reviews: In response to questions, DCNR said it has added staff to the Pennsylvania Natural Diversity Inventory program that identifies threatened and endangered species during permit reviews.
-- Hiring Dan Surra: Secretary DiBerardinis said hiring former House member Dan Surra for $95,000 during a time he expects to lay off 68 people has given him a resource he needed and asked for over the last three years to help administer the Pennsylvania Wilds Program that he called one of the most complex recreation, tourism and economic development projects in the country.
Secretary DiBerardinis did not submit a written statement for the hearings.