Senate Democrats Plan To Offer Marcellus Shale Impact Fee Amendment

Sen. John Yudichak (D-Luzerne) joined with Senate Democratic Leader Jay Costa (D-Allegheny) and state Senators Andy Dinniman (D-Chester) and Tim Solobay (D-Washington) today to announce their plan to offer an amendment to implement a fair and responsible severance fee on natural gas drilling.

“I do not want another budget season to pass without getting this issue done,” Sen. Yudichak said. “There is a bipartisan consensus building on the Marcellus Shale issue in the House and the Senate.”

The Senate Democrats’ amendment would:

-- Increase the base impact fee from $10,000 to $17,000 and restore the price and volume adjustment factors for natural gas;

-- Raise the effective tax rate to 5 percent. Based on a price of gas of $4.50 per mcf, this would raise an estimated $200 million in 2011-2012 and $260 million in 2012-2013;

-- Provide $2 million to support training programs and equipment purchases to areas where there is shale drilling and areas that are involved in the transportation and distribution of natural gas;

-- Restore the Growing Greener type projects as an eligible use of funds; and

-- Add weatherization, energy efficiency and energy conservation measures to the list of projects that are eligible for funding under statewide environmental initiatives.

“The Senate Democrats have developed an appropriate response to the Marcellus Shale issue,” Sen. Costa said. “This is the third budget season that we have discussed a fee on natural gas drilling. This is the budget year that it must get done.”

The senators agreed that the impact fee needs to be a part of the budget process and warned that if it is not passed, there will be serious impacts on Pennsylvania’s already strained infrastructure and environment.

“The impact of Marcellus Shale is all over Pennsylvania, not only the Marcellus Shale region,” Sen. Dinniman said. “We must protect the open space and environment in Pennsylvania.”

Sen. Solobay added that he is encouraged by the involvement of Senate President Pro Tempore Joseph Scarnati (R-Jefferson) and wholeheartedly supports moving forward on the issue. He said he is hopeful that the governor will also embrace the idea of an impact fee on Marcellus Shale drilling.