Senate/House Democrats Say Fee On Drillers Must Be Part Of Budget Agreement

Senate and House Democrats joined today to urge Republican leaders to “do the right thing” and pass a responsible severance fee on natural gas drilling in the Marcellus Shale. Lawmakers from both chambers have continuously called for a fee to be a part of the 2011-2012 fiscal year budget discussions.
Senate Democratic Leader Jay Costa (D-Allegheny), House Democratic Leader Frank Dermody (D-Allegheny), House Democratic Whip Mike Hanna (D-Clinton/Centre), and Senate Environmental Resources and Energy Committee Democratic Chairman John Yudichak (D-Luzerne) were joined by House and Senate colleagues and vowed to continue pushing for a fee to be passed before the legislature adjourns for its summer recess. Lawmakers were in Harrisburg for a Sunday session to begin moving budget bills for passage before the June 30th deadline.
As members of the legislature prepare to learn more about the budget drafted in secret by House and Senate Republicans and the governor, Democratic leaders expressed concern over the fact that Marcellus Shale drillers appear be absent from the shared pain and sacrifice demanded by Gov. Corbett as part of the austere budget framework which is close to becoming a reality.
“It is unconscionable that everybody is being asked to sacrifice and absorb some of the pain created by the Republicans’ budget plan except for an industry that is raking in profits at Pennsylvania’s expense,” said Sen. Costa. “Clearly, these companies are having an impact on the environment and local communities, yet some of our colleagues here in Harrisburg refuse to acknowledge the need to assist those communities in dealing with the after-effects.”
“The development of the natural gas resource in Marcellus Shale already brought many jobs to Pennsylvania, but it also creates many costs across the state,” Rep. Dermody said. “It is up to us to ensure that this booming industry pays its fair share and is properly regulated. Let’s do what’s right for Pennsylvania, not what’s most convenient for the big oil and gas corporations.”
“We must institute a responsible natural gas extraction fee and environmental safeguards to provide for our residents and to protect the environment. The time is now to do the responsible thing and implement a severance tax on the gas drillers here,” said Rep. Hanna.
“This is the third year in a row we have talked but not acted on the issue of Marcellus Shale. We can’t allow this to be one more year where drillers are let off the hook,” said Rep. Yudichak. “The majority of Pennsylvanians and legislators on both sides of the aisle support a reasonable fee. The industry expects to be asked to do their part, yet Pennsylvania remains the only state that year after year gives this multi-billion dollar industry a free pass.”
The amendment being proposed 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.
Lawmakers closed by warning that if a Marcellus Shale impact fee is not passed, Pennsylvania communities, already feeling the impact of unnecessary budget cuts, will struggle to address the serious infrastructure and environmental impacts which drilling is having statewide.