Tuesday, February 19, 2019

House Environmental Committee Meeting On DEP Budget Covers Climate Change, Permit Fees, Fund Transfers

On February 19, the  House Environmental Resources and Energy Committee held an informational meeting on the Department of Environmental Protection’s budget that covered lots of ground from whether climate change was real, proposed Oil and Gas Program fee increases, whether public hearings on pipeline permits were necessary and more.
DEP Secretary Patrick McDonnell was joined at the meeting by Ramez Ziadeh, P.E. Executive Deputy Secretary for Programs and Scott Perry, Deputy Secretary for Oil and Gas Management.
Rep. Daryl Metcalfe (R-Butler), Majority Chair of the Committee, and Kathy Rapp (R-Warren), questioned the statement in the written budget overview DEP provided that said, “the most serious environmental threat facing Pennsylvania is climate change.”
Rep. Metcalfe said he thought most people believe issues like [Binghamton] New York dumping 50 million gallons of wastewater into our river is a more serious problem.  In a way, he said, DEP’s statement is good because it means issues like fracking are not a serious threat.  He said he believes fracking is not a threat, not having energy independence is.
Rep. Metcalfe added he thought climate change is just an excuse for government to tax CO2 (carbon dioxide), adding the government would tax oxygen if they could. He said he looks forward to continuing the climate debate.
Rep. Rapp asked if DEP is advocating a severance tax on wind or solar energy, like the Administration is for natural gas.
Rep. Greg Vitali (D-Delaware), Minority Chair of the Committee, and Rep.
Carolyn Comitta (D-Chester) said they believe climate change is a real threat and needs to be dealt with.
DEP Secretary Patrick McDonnell said Pennsylvania is already seeing the impacts of climate change in increased precipitation events, flooding and stormwater issues that need to be addressed.  He added DEP is not advocating a severance tax on wind or solar energy.
Rep. Comitta followed up by asking DEP what impact the forthcoming Climate Change Action Plan recommendations will have on DEP’s budget and how the Restore Pennsylvania proposal could address climate change issues.  
McDonnell said DEP has been addressing issues like controlling methane emissions from oil and gas operations in its General Permit 5 update and is developing new regulations to cover existing facilities.
In addition, he said Gov. Wolf’s recent Executive Order sets a greenhouse emissions reduction goal for the state and tasks the GreenGov Council to take steps to implement the Order.
McDonnell added as you look at adaptation and mitigation strategies to deal with issues like more frequent stormwater and flooding impacts, those could be addressed by the Restore Pennsylvania proposal.
Here’s a quick rundown on other issues raised at the meeting, some of which were also addressed in last week’s House hearing on DEP’s budget request--
-- Unnecessary Hearings On Pipeline Permits: Rep. Timothy O’Neal (R-Washington) asked if  DEP looking at eliminating doing certain things that are not necessary, like holding hearings on pipeline permit applications when they are not required.  He pointed to the example of the Shell Falcon ethane pipeline in his district. McDonnell said generally the agency is looking at doing more with general permits that simplify the permit process and taking other steps to improve efficiencies.  On pipeline permits, McDonnell said the challenge is issuing a permit that will withstand appeals. He added he believes DEP has had a defensible record on issuing pipeline permits in particular. He also said DEP received a number of requests for hearings on the Shell Falcon pipeline and other projects they have to respond to.
-- Special Fund Transfers: Rep. Greg Vitali (D-Delaware) expressed concern about proposed transfers from Environmental Stewardship (Growing Greener), Oil and Gas Lease Fund, Keystone Recreation, Parks and Conservation Fund and Recycling Fund to pay operating costs and generally about significant reductions in funding and staff in the agency over the last decade or more.
-- Recycling Fund: Rep. Chris Dush (R-Jefferson) asked why the balance in the Recycling Fund does not go down and whether grants were going out the door. McDonnell said when the $2 Recycling Fee was in danger of sunsetting  in 2017, DEP slowed down giving out grants because DEP wanted to meet all existing commitments without creating new ones. He also explained revenue and outflow from the Recycling Fund tends to come in and go out in larger chunks.
-- Fee Supported Programs: Rep. Metcalfe asked which programs are solely supported by fees.  McDonnell said it varies, the Oil and Gas Program is funded entirely by fees and a $6 million transfer from the Marcellus Legacy Fund financed by Act 13 impact fees.  The Air Quality and Radiation Protection Programs are supported by a combination of fees and federal funds. The Safe Drinking Water Program is funded by federal, state and permit fees.
Rep. Metcalfe asked specifically about the “huge” proposed increase in oil and gas permit fees. McDonnell said the program is losing up to $800,000 a month to support the program and as a result things are not getting done, like some inspections.  He noted permit fees are the only tool the agency has to raise funds to support its programs. Deputy Scott Perry said the previous fee was predicated on DEP receiving a larger number of permits applications to review-- 2,600 when the actual number has been about 2,000.  He explained permit reviews are only a small part of what the Oil and Gas Program does saying about 8 people handle permit reviews out of the 190 now in the program. The fee is, by statute, required to cover the costs of the entire program, not just permit review. While there have been a smaller number of permits coming in the door, Perry said DEP’s overall workload grows because they have to assure compliance with requirements cover all the wells that have already been drilled.
-- Calculation Of Permit Fee Amounts: Rep. Lee James (R-Venango) asked about how DEP calculates its permit fees (following up on question he asked at the budget hearing last week) and what happens if an applicant does not pay a fee.  McDonnell said a workload and cost analysis is done on each program. DEP also looks at opportunities for efficiencies and reducing costs before it arrives at a proposed fee increase.  He noted adopting permits fees is the only means the agency has under state law to address funding gaps. He added the agency does not count on fines and penalties to pay for programs.  He explained DEP follows the Regulatory Review Act in adopting its fees which calls for review by the House and Senate and the Independent Regulatory Review Commission and the public. Advisory committees are also typically involved inside DEP as well in developing fee proposals. He explained if someone doesn’t pay a permit fee, that’s a violation of DEP’s regulations.
-- Business Process Improvement: Rep. Chris Dush (R-Jefferson) asked if McDonnell was familiar with the 6-sigma business improvement process and what steps DEP has taken to change its processes.   McDonnell said as of today [February 19] DEP has a new Director of Business Transformation on board that is looking at making its business practices more efficient and effective.  He noted, however, he personally was familiar with “lean” transformative process like six-sigma and ISO 14,000 certifications. McDonnell explained the agency has already improved its permitting processes by switching to epermitting which started with the mining program.  The results there, he said, were encouraging because it reduced the application by about 25 percent.
-- Emergency Permits For Stream Work: Rep. David Zimmerman (R-Lancaster) asked with all the rain a lot of sandbars developed, roads have been damaged and there has been erosion in fields.  He asked if DEP’s emergency stream work permit can be changed to allow more area beyond 50 feet for stream clearance and asked about an increase in permit fees.  McDonnell said DEP recently put out handbook on emergency stream work permits that explains what is covered and not covered by these permits.  Executive Deputy Ziadeh added under emergency permits areas can be extended beyond the 50 feet.  He added that emergency permits are free. McDonnell said last summer with all the flooding the DEP Northcentral Office reviewed over 200 emergency permits and turned them around in 24 to 48 hours.
-- MS4 Stormwater Pollution Reduction Program: Rep. Metcalfe said he has heard complaints about the potential costs about the MS4 Program for reducing pollution from stormwater and asked what can be done to reduce this burden.  McDonnell said the MS4 stormwater program was expanded by EPA to do more to reduce water pollution from stormwater. He noted Pennsylvania has the large number of MS4 communities involved in this program compared to other states in the region.   He said DEP has been encouraging municipalities to join together to reduce costs, which in some cases could reduce the cost of compliance by 50 percent. He added DEP has no role in setting any local stormwater fees to implement the program. A big focus of the Restore Pennsylvania Initiative, he added, is helping communities meet MS4 stormwater obligations.
Click Here for an overview chart of DEP’s budget.   Click Here for narrative overview of DEP’s budget.
Rep. Daryl Metcalfe (R-Butler) serves as Majority Chair of the House Environmental Committee and can be contacted by calling 717-783-1707 or sending email to: dmetcalf@pahousegop.com. Rep. Greg Vitali (D-Delaware) serves as Minority Chair and can be contacted by calling 717-787-7647 or sending email to: gvitali@pahouse.net.
(Photo: Rep. Metcalfe, Rep. Vitali, Secretary McDonnell.)
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