In response to a question by Sen. Gene Yaw (R-Lycoming), Majority Chair of the Senate Environmental Resources and Energy Committee, Acting DCNR Secretary Cindy Dunn said about $117 million of the expected $130 million in royalties coming from drilling on DCNR lands next fiscal year will be used by the agency to pay administrative costs.
However, she noted the proposed budget includes an additional nearly $20 million from the General Fund to help wean the agency off of using royalty monies for operational costs.
She was also asked a series of questions about the drilling moratorium Gov. Wolf issued in February.
Sen. Yaw noted the Governor issued an executive order imposing a moratorium on additional leasing on DCNR lands, but a recent court decision said only the Secretary DCNR could issue a moratorium on drilling and asked if Dunn had issued a moratorium.
Dunn said she has not issued a drilling moratorium, but agreed with the Governor’s action to give DCNR breathing space to better regulate drilling activities.
Sen. Mario Scavello (R-Monroe) asked about whether cuts have been made in response to additional natural gas leasing revenue-- $95 million-- anticipated, but not coming in this year as a result of the Governor’s moratorium.
Dunn said there has been no interest in additional gas leasing on State Forest land, so the revenues were not coming in anyway.
Click Here for a copy of Acting Secretary Dunn’s written testimony.
-- DCNR Land Disturbed By Drilling 1,600 Acres: In response to a question by Sen. Gene Yaw (R-Lycoming), Majority Chair of the Senate Environmental Resources and Energy Committee, Dan Devlin, DCNR Director of the Bureau of State Parks, said about about 1,600 acres of State Forest land are disturbed by current drilling out of a total of 2.2 million acres in DCNR land.
In answer to a follow up question from Sen. Randy Vulakovich (R-Allegheny), Dunn said there currently is no drilling under any State Park lands where DCNR owns only about 20 percent of the mineral rights. She said all the current drilling is conducted on State Forest land.
Sen. Vulakovich asked if there is any drilling in the Utica Shale formation, to which Devlin said the leases are for all depths.
-- Royalty Income: Sen. Yaw asked from an estimate of the current year and next year’s expected income from gas leasing royalties. Devlin said DCNR received about $120 million in the current year from gas well royalties and expects to receive $130 million next year. Dunn said $117 million of those funds will be used to pay administrative costs, but pointed out the proposed budget includes nearly $20 million from the General Fund to begin the process of weaning the agency off Oil and Gas Fund royalty monies.
Sen. Yaw commented later in the hearing he thought using one of DCNR’s resources-- drilling Marcellus Shale-- to fund the agency was a good idea.
-- DCNR Land Purchases: Sen. Yaw noted DCNR has purchased over 42,000 acres of land over the last few years and asked if the land was purchased with gas well royalties. Dunn replied very few of those dollars were used to purchased.
-- Drilling Moratorium: Sen. Yaw noted the Governor issued an executive order imposing a moratorium on additional natural gas leasing on DCNR lands, but a recent court decision said the DCNR Secretary is the only one who could issue a moratorium on drilling. Dunn said she has not issued a drilling moratorium, but agreed with the Governor’s action to give DCNR breathing space to better regulate drilling activities.
Sen. Yaw asked if the under-river leasing of Commonwealth-owned submerged land falls within the drilling moratorium. Dunn said it was not included.
-- $95 Million From Additional Drilling: Sen. Mario Scavello (R-Monroe) asked about whether cuts have been made in response to additional natural gas leasing revenue-- $95 million-- anticipated, but not coming in this year as a result of the Governor’s moratorium. Dunn said there has been no interest in additional gas leasing on State Forest land, so the revenues were not coming in anyway.
-- Value Of State-Owned Natural Gas Reserves: Sen. Pat Browne (R-Lehigh), Majority Chair of the Senate Appropriations Committee, asked if DCNR did any estimates of the value of natural gas mineral rights under state land. He commented the Governor’s drilling moratorium could hinder valuing this state asset on the Commonwealth’s balance sheet. Devlin said DCNR has not done an analysis of the volume of or natural gas value under DCNR lands.
-- Proposed Severance Tax: Sen. Browne noted on one hand there has been testimony before the Committee there is not much interest in new natural gas leasing, but the proposed natural gas severance tax is based on projections of future natural gas production which presents a problem in consideration of a severance tax. Dunn noted State Forest lands leased for drilling and natural gas storage are a unique circumstance confined to a specific geography and a small portion of the natural gas development going on in the state, but she offered to share information with the Committee on DCNR’s natural gas production.
-- Use Of State Parks: Sen. Yaw asked about public use of State Parks. Dunn said DCNR has seen an uptick in State Park users to a total of about 38.5 million visitors per year. She said the GetOutdoorsPA.org initiative developed with a variety of partners have promoted programs that encourage outdoor recreation, including in State Parks. She also noted the PA State Recreation Plan will be released shortly laying out additional strategies.
-- Updated Recreation Facilities For Seniors: Sen. Vogel (and later Sen. Sean Wiley (D-Erie)) said the public is getting older and don’t want to stay in tents any more and wondered if DCNR has plans for any more facilities like the Nature Inn in Bald Eagle State Park. Dunn said DCNR has been developing more drive-through facilities where visitors can hook up to utilities and wi-fi as a cost-effective recreation option. Dunn also noted DCNR is responding to the needs of other special groups including returning veterans with missing limbs, for example, developing kayak launching areas for people with disabilities.
-- Heritage Park Funding: Sen. John Blake (D-Lackawanna) said he was disappointed to see Heritage Park funding was zeroed out again in the budget proposal. Dunn agreed the program is valuable.
Sen. Lisa Baker (R-Luzerne) noted Heritage Park organizations can compete for other funding sources, but said it is difficult for the groups to obtain administrative funds. She also noted about the same amount of money cut from Heritage Parks was added to operate the new Washington Crossing State Park being transferred from the PA Historical and Museum Commission to DCNR this year.
In response to a question from Sen. Mario Scavello (R-Monroe), Dunn said Heritage Park funding was not proposed in the Governor’s budget in the last several years, but was added back in by the General Assembly.
Sen. Kim Ward (R-Westmoreland) asked if there are projects that will not be undertaken because Heritage Park funding is not there. Dunn said DCNR tries to make more strategic investments across all the grant and funding programs it has to fulfill the public’s needs, noting DCNR turns down about half the grant applications it receives due to funding limits.
-- Community Conservation Partnership Grants: Sen. Judy Schwank (D-Berks) asked about the status of Community Conservation Partnership Grant program. Dunn said DCNR focuses on connecting existing recreation resources and sets priorities, in part guided by public surveys done as part of the PA Outdoor Recreation Plan every five years.
-- Keystone Fund Performance Review: Sen. Browne asked if there has been a performance review of the Keystone Fund Program. Dunn said there is an annual report on the program, but noted the Center for Rural Pennsylvania did a review of recreation program funding several years ago and concluded it was a major factor in improving recreation opportunities.
-- Dirt And Gravel Roads Funding: Sen. John Rafferty (R-Montgomery) said additional funding was provided by the recent transportation funding for the Dirt and Gravel Roads Program and asked how DCNR is using the funding. Dunn said going from $1 million to $7 million in funding was very helpful. Devlin said the new funding enabled the agency to put together an organized maintenance program for State Forest roads and for the first time State Parks roads.
-- State Park User Fees: In response to a question from Sen. Blake about the consideration of new State Park fees, Dunn said the State Park system was based on the policy of being open to the public without fees, except for specific special services like pools, boating and other vendors.
-- State Park Beach Lifeguards: Sen. Rob Teplitz (D-Dauphin) (and later Sen. Wiley) expressed concern about DCNR’s swim at your own risk policy and the removal of lifeguards from State Park beaches which began in 2008 as a way to save the state $800,000 a year. Dunn said the policy is a trend across the country and pointed out that parents are in charge of their children at all times and that a mixed system with lifeguards can encourage inattention by parents. Having lifeguards also limits the swimming season when lifeguards cannot be found to be employed.
In response to a question from Sen. Scavello, Dunn said there have been three lives lost in DCNR swimming areas, two without lifeguards and one with lifeguards, in recent years. She noted it is a tragic day whenever anyone is hurt in State Parks.
-- Public Safety In State Parks: Sen. Wiley expressed concerns about public safety in State Parks which have equipment and personnel needs, noting Presque Isle State Park has the highest usage of any State Parks. Dunn said weather affects usage greatly, but DCNR’s staff does great work in managing big crowds. She said anyone you’d ask would say they need more staff, but she believes the agency is doing a good job.
-- Park Closures Without The Budget: Sen. Scott Wagner (R-York) said he hoped, if there is a budget stalemate, State Parks will not close as a political response after July 1. Dunn said she hopes the parks do not close, noting DCNR employees can work, but they depend on supplies-- fuel even toilet paper-- that have to be purchased to operate the parks.
-- Cooperation On Economic Development: Sen. Wiley asked if DCNR is working closely with DCED on tourism and economic development issues. Dunn said cross-promoting recreational and tourism opportunities is being done through initiatives like Pennsylvania Wilds.
-- Green Buildings: Sen. Blake asked about DCNR’s initiative to construct green buildings. Dunn said the last 10 buildings constructed by DCNR were LEED certified green building as an example to the public. DCNR has about 5,000 buildings.
-- Timber Harvest Revenue: Sen. Elder Vogel (R-Beaver), Majority Chair of the Senate Agriculture and Rural Affairs Committee, asked why DCNR’s timber sales revenue was down about $1.5 million for next year. Devlin said DCNR is cutting the same amount of timber, but the timber market is depressed as well as the homebuilding industry.
-- Gypsy Moth Spraying/Wooly Adelgid: Sen. Schwank asked about the status of the gypsy moth spraying program. Delvin said DCNR will be spraying about 26,000 acres around the state, noting the program depends on the weather and gypsy moth populations. Devlin said DCNR put out a plan for dealing with the hemlock conservation and the wooly adelgid last year.
-- Endangered/Threatened Species: Sen. Vogel asked if DCNR should have control over all endangered and threatened species, rather than having the responsibilities spread between three agencies-- DCNR, the Game and Fish and Boat Commission. Dunn said DCNR plans to roll out a new version of the PA Natural Diversity Inventory Environmental Review Tool to help developers, pipeline companies and others conduct reviews of projects for impacts in sensitive species. Devlin said the new tool should be available to key stakeholders for review in the Spring with the goal of releasing it publicly later in the year.
-- Wind Farms/Solar Farms On DCNR Lands: In response to a question from Sen. Yaw, Dunn said there are no wind farms or commercial solar farms on DCNR land. She said they do have some demonstration wind mills and solar panels related to some DCNR facilities.
Sen. Browne announced at the end of the DCNR hearing the Appropriations Committee will be holding additional hearings on agency budgets, although he did not elaborate on which agencies would be involved.
Click Here for a copy of Acting Secretary Dunn’s written testimony. Click Here for a summary of DCNR’s House budget hearing. Click Here for a summary of the Governor’s proposed environmental budget.
Written testimony and a video of each House hearing will be posted on the Republican House Appropriations Committee webpage. Information about Senate budget hearings are posted on the Senate Republican Caucus website.
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