Monday, October 3, 2011

Rep. George: Corbett Marcellus Plan Is A Flawed Sweetheart Deal

Rep. Camille “Bud” George (D-Clearfield) today said Gov. Tom Corbett’s proposal for an impact fee on Marcellus wells comes up woefully inadequate in addressing the impacts or protecting the waters of the Commonwealth or the people affected by industrial gas drilling.
“The governor has made it perfectly clear that he is a friend to the gas industry,” said Rep. George, Minority Chair of the House Environmental Resources and Energy Committee. “I join the governor in wanting to create jobs. However my top priority and responsibility is clean water and not coddling an industry.”
Rep. George said the taxes and environmental regulations proposed by Gov. Corbett were “inadequate and inefficient at best” compared to his House Bill 1800, the “ProtectPA” legislation.
“As I compare House Bill 1800 to the governor’s, I can’t help but feel that mine is based upon the desire to preserve our environment, and Gov. Corbett’s is based upon rewarding an industry that donated $1.6 million to his gubernatorial campaign.”
Rep. George pointed out glaring differences to his House Bill1800 and the governor’s proposal:
-- Increased setbacks from private water wells: Corbett, 500 feet vs. House Bill 1800, 1,500 feet;
-- Increased setbacks from public water supplies: Corbett, 1,000 feet vs. House Bill 1800, 2,500 feet;
-- Increased bonding for wells: Corbett, maximum $10,000 vs. House Bill 1800, starting amount $12,500;
-- Civil penalties for violations: Corbett, maximum $50,000 plus $2,000 daily fines vs. House Bill 1800, maximum $100,000 plus $10,500 daily fines.
Rep. George said other problems with the Corbett proposal were not only what was in the package, but what was omitted.
“My ProtectPA bill calls for a two-year moratorium on the additional leasing of state forest lands for Marcellus drilling,” Rep. George said. “Former DCNR Secretary John Quigley has said that any remaining unleased forest land is of a pristine nature that should not be compromised, and I join Secretary Quigley in that assessment. Unfortunately, the governor fails to do the same.”
Rep. George also said that the governor’s “county option” impact fee would fail to properly address the areas affected by industrial gas drilling.
“His proposal leaves many environmental programs unfunded or underfunded, and takes the wrong approach at repairing our deteriorating roads and bridges,” Rep. George said.
Gov. Corbett’s impact fee, based on a flat per-well assessment, would generate a maximum of $160,000 per well over 10 years. Rep. George’s severance tax is based on the market value of the gas at the wellhead and would produce revenue as long as the well is producing substantive quantities of gas.
“A volume-based tax is the way to go,” Rep. George said. “The per-well fee – with a 30 percent discount offered to drillers setting up natural gas fueling stations – is the epitome of a sweetheart deal and is yet another tax loophole for industrial gas drillers.”
Under the governor’s projections, $120 million in revenue would be generated the first year and $200 million within six years, and most would be sent to local governments by letting the counties collect the fees. Rep. George’s proposal would generate $343 million the first year and $483 million the year after and revenues would be distributed among the counties and municipalities by the state.
“As many as 54 different counties could opt to collect the paltry fees sought by the governor,” Rep. George said. “The gas industry already has filed lawsuits against at least two counties. While the governor sees wisdom in offering concerted or coordinated safety-training programs through PEMA, he wants an impact fee that could be collected by 54 different entities.”
Like Gov. Corbett’s proposal, House Bill 1800 gives the largest allocation of revenue generated to local governments, with no unrestricted revenue to the General Fund. Unlike the ProtectPA bill, Governor Corbett gives no money to important environmental programs, such as Growing Greener.
“Under my proposal, Growing Greener would receive over $50 million the first year and more than $70 million after that,” Rep. George said. “Under the governor, the already hemorrhaged Environmental Stewardship Fund – Growing Greener – would get nothing.”
Rep. George noted that the Commonwealth must fund projects to fix the deteriorating roads and bridges across the state, but not through additional leasing of forest lands. House Bill 1800 provides money to PennDOT specifically for road repairs related to Marcellus gas drilling.
“The impacts of industrial drilling are felt statewide,” Rep. George said. “If we don’t examine this issue at the macro level as much as the micro level, I fear we may fail to see the forest for the trees.”

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