"This new industry has brought economic growth and jobs, but it has also brought new challenges," Sen. Scarnati said. "The most important issue in this whole conversation is the protection of our natural resources and the communities where drilling takes place. I believe we can have the jobs that this new industry brings, and we can still protect our environment in a balanced way."
House Bill 1950, which must receive House approval before it goes to the governor for his signature, was approved after months of negotiation and compromise on a number of areas, including local zoning issues and how funding would be allocated.
"This legislation will help communities in the Marcellus Shale region provide for reasonable local zoning parameters and implement strong environmental protections," Sen. Scarnati said. "Drillers will pay their fair share, and that revenue will help our state and its citizens as this industry continues to grow."
The "local impact fee," would fluctuate depending on the price of natural gas and, beginning in 2013, on the rate of inflation. The bill enables counties where drilling occurs to decide whether to impose a fee. If a county declines to impose a fee, half its municipalities would have the option to force it to do so.
Under the proposal, 60 percent of the revenue raised from the fee would go to local governments impacted by drilling. Of that share, 37 percent would go to host municipalities, 36 percent to host counties and 27 percent to other municipalities in host counties. The money would be used to pay for a number of local services, from emergency preparedness to road, bridge and infrastructure projects.
The remaining 40 percent of the revenue would be for statewide environmental projects, including acid mine drainage remediation, water projects, flood control, statewide highway and bridge improvements, projects for open space, recreational trails and "beautification" projects, and hazardous sites cleanup.
The legislation also provides for standardized but flexible zoning standards which would allow communities to retain reasonable control over zoning power and encourage consistency in regulating the gas industry.
"Local governments will retain their traditional powers to provide for local zoning and regulation, and we can, at the same time provide for the development of natural gas and the jobs and opportunities that this industry brings," Sen. Scarnati said.
Environmental safeguards included in the measure would increase well-bonding amounts, boost penalties for violations, and require the disclosure of chemicals used in hydraulic fracturing as well as call for the posting of inspection reports.
The bill increases setbacks – requiring shale gas wells to be 500 feet from occupied structures and water wells, and 1,000 feet from public drinking water sources. It also increases the setback distance from a shale gas well to a spring or body of water to 300 feet.
"The Marcellus Shale industry is here to stay in Pennsylvania – bringing us jobs, huge economic benefits and the potential for energy independence," Sen. Scarnati said. "It makes sense to impose a reasonable impact fee on the industry to provide the funding necessary to further protect our natural resources, particularly at a time when our state is being forced to stretch our tax dollars."