Wednesday, May 4, 2011

DEP Secretary Corrects The Record At House Environmental Committee Hearing

The House Environmental Resources and Energy Committee this week gave Department of Environmental Protection Secretary Michael Krancer the opportunity to correct the record on a number of issues facing the agency and to outline his priorities.
In an opening statement, Krancer said DEP "must be on the forefront of protecting the public and the environment and must be open and transparent involving public and stakeholder participation while doing so. We owe it to the citizens of Pennsylvania to strive all the time for consistency in decision-making which leads to strong enforcement of the law."
He said his priorities for the agency include:
1. A back to basics approach to management, focusing on getting the basic program administered by the department running effectively;
2. Priorities within DEP will be: regulating the natural gas industry, protecting the Chesapeake Bay Watershed and revitalizing brownfield and grayfield properties; and
3. The budget.
Krancer also said he thinks environmental education needs to be a priority again, along with compliance assistance and pollution prevention. He said he hopes to bring more of a cross-media approach to environmental protection, not separating programs into silos for air, water and the other programs.
Krancer outlined a number of instances where he said the agency and staff were unfairly attacked since taking office in January. He also gave two examples of where opponents have used "bad science" to criticize agency policies.

Back To Basics: Krancer said his agency's staff is anxious to get back to working on its main mission-- protecting the environment. He related a story of a geologist he met in one regional office who said she spends half her time some weeks being an funding administrator for a solar energy project. "If she wanted to be a loan officer, she would have gone to work for a bank, but that's not what she came to DEP for," Krancer said.
Over 100 DEP Air, Waste and Water Quality field staff use all or part of their time to act as managers for federal stimulus projects, projects funded by the Energy Harvest and PA Energy Development Authority programs taking time away from permit reviews, inspections and compliance activities.
Maybe once these projects end, Krancer said, "I'll get fewer calls about permits stuck in the review process."

Marcellus Permit "Rubber Stamp:" Krancer said a recent news article attacked four DEP staff by name for what it said was rubber stamping Marcellus Shale permit reviews, when in fact it was a lawyer attempting to try an appeal of a DEP action taken by the previous Administration in the press.
The reporter just took the quotes from the lawyer at face value and did not know the Marcellus gas permit is not only reviewed by a geologist, but for meeting well casing requirements, water quality, erosion and sedimentation and other requirements.
Krancer said it's his job to take on attacks like that, not his employees. He said he told his employees if they do their job, he will "have their backs."
He also said he inherited a "balkanized" Oil and Gas Program where three different regions and Central Office each have pieces of the program. "I'm not happy with that, we need more focus and need to be coordinated," Krancer said. "Any ideas I'm delighted to have (for changing the program)."

Marcellus Shale Enforcement: Krancer said it was never his order to review all notices of violation before they were issued in the Oil and Gas Program as reported in news articles.
"I'm here to tell you inspectors were never under an order or directive or anything else to clear through Mike Krancer or anybody else in Central Office to write notices of violation. That story was blown way out of proportion; it was never the case," said Krancer.
He said what he is doing is focusing on consistency and making sure notice of violations and enforcement actions stand up when they are challenged in court.
He noted the state Oil and Gas Act requires the DEP Secretary to approve well shutdown orders and his agency has already taken a number of actions this year to shutdown operations not complying with the law.
Krancer read a letter to the Committee from the Galeton Water Authority thanking DEP staff for taking prompt action in one recent case to shutdown an operation.
He also pointed to the recent call to Marcellus Shale drillers to stop taking their wastewater to public treatment plants exempted from complying with the new Total Dissolved Solids water quality standards by the previous Administration. "We got compliance in 28 hours, not 28 days" using the approach we did, Krancer said.
Krancer objected to assertions by some that Pennsylvania's Marcellus regulations are inadequate and said the Commonwealth now compares well with other states.
He said his main job in regulating Marcellus Shale drilling is to protect the water. "At the end of the day, my job is to make sure gas is done and gas is done right," said Krancer.

General Approach To Enforcement: As another example of his general attitude on enforcement, Krancer pointed to an opinon he wrote as an Environmental Hearing Board judge-- DEP v. Leeward Construction (2001 EHB 870)-- where he asked the question about whether the penalty imposed in the case was high enough given the flagrant and deliberate nature of the violations by the defendant.
In particular, he said, he encouraged DEP staff throughout his career as a judge to bring him evidence of any economic benefits a violator gained by not complying with the law.
The opinion says in part, "Allowing Leeward in these circumstances to have profited at all from this transaction is not only wrong, but also it puts at a competitive disadvantage companies that take the steps and incur the costs to perform their activities in a law abiding fashion. This latter situation creates a synergy of adverse effect by simultaneously promoting the degradation of the environment and undermining the competitive free market system."
"I want to leave a legacy as a good enforcer," said Krancer.

Oil and Gas Act Penalties: Krancer said in response to a question Gov. Corbett supports an increase in penalties under the Oil and Gas Act.

Adequacy Of Oil and Gas Enforcement Staff: When asked if DEP had enough staff to enforce Oil and Gas Act requirements, Krancer said the agency is constantly looking at enforcement and permitting capabilities and will adjust its staff accordingly. He noted well permit fees make the Oil and Gas Program self-funding and natural gas severance tax proposals typically do not help fund DEP staff.

Reuse Of Water: Several members of the Committee suggested there may be barriers to reusing public wastewater treatment effluent, treated acid mine drainage and treated drilling wastewater as fracking water and for other industrial process waters. Krancer said he would look into the issues because reusing water would be a win for everyone.

Chesapeake Energy Well Blowout: Krancer told the Committee the agency needs answers to hard questions about how the Chesapeake Energy Marcellus well in Bradford County got out of control, spilling thousands of gallons of fracking water. He said he wants to know the answers to questions like, "Why did it take so long get a well capper out there."
He noted all of Chesapeake Energy wells in Pennsylvania are now shut down pending the investigation of the blowout, which was verified by DEP staff.

Working the Federal Government: Krancer said it has been difficult, at times, to work with the U.S. Environmental Protection Agency and the federal Office of Surface Mining when they suddenly, it seems, came to the conclusion that Pennsylvania is doing things wrong in regulating Marcellus gas wells and in issuing NPDES water quality permits.
He said officials, like Steve Heare, head of EPA's Drinking Water Protection Division, said just a year ago that DEP was doing a good job. He also pointed to the non-profit review group STRONGER which also concluded Pennsylvania was doing a good job regulating Marcellus Shale.
He said the day-to-day working environment with EPA is being made more difficult when staff level discussion "transcripts" on issues related to Marcellus Shale suddenly end up in articles published in the New York Times out of context.
Krancer said House Resolution 87 (Pyle-R-Armstrong) which urges EPA to stop its oversight of state NPDES water quality permits and restore the federal-state relationship of past years is a good message for the state to send. (The resolution was adopted by the House this week.)
He also noted EPA's approach to cleaning up the Chesapeake Bay does not recognize the fact that Pennsylvania has thousands of local governments and frequently does not count the good work done by the state's farmers to reduce nutrient and sediment pollution.
"Suddenly DEP has gotten feckless and incompetent since January 19 (Gov. Corbett's swearing in day)," said Krancer. "The Department is on the job and doing a good job. We have 2,600 of some of the best employees."

Energy Policy Formulation: Krancer said there will be significant changes in the way the state's energy policy is done. In the past, the DEP Secretary was the be-all and end-all for energy policy. "You're not going to see that anymore," Krancer said.
He said he will be part of a team, working with the Governor's Energy Executive Patrick Henderson, to address energy issues.
He noted Pennsylvania needs a diversified energy portfolio-- nuclear, coal, natural gas, solar and wind-- for the future.

Examples of Bad Science: Krancer pointed to two recent examples of what he called "bad science" which attempt to influence public policy.
One was a Cornell University study which wrongly concluded the carbon footprint of natural gas was even larger than coal. Independent analysts concluded the study overstates the carbon emissions by at least 75 percent.
The other was a report by Democrats in the U.S. House of Representatives on hazardous chemicals and carcinogens in Marcellus Shale fracking fluids which Krancer called "unconscionable" for its misrepresentation of basic information and the public health risk.

Rep. Scott Hutchinson (R-Venango) serves as Majority Chair of the Committee and Rep. Camille George (D-Clearfield) serves as Minority Chair.
NewsClips:

Wednesday NewsClips

Corbett: Drilling Violations Didn't Need OK From Top
Governor Backs DEP's Drilling Citations
State Kills Directive On Shale Violations
DEP Ends Drilling Violation Approval Procedure
Editorial: State Cooks Tax Numbers With Gas
Editorial: Marcellus Shale Impact Fee Is Best Bet At This Point
Op-Ed: Natural Gas Has Vital Role In U.S. Future
Fitzgerald Raps Foe On Shale Drilling Plan
Dallas Twp Strikes Down Gas Law, Adopts New Tactic
Game Commission Details Gas Money Plans
Some Seekers Of Rural Life Move Out Of PA As Gas Rigs Move In
Maryland Mulling Lawsuit Over Area Fracking Spill
Statoil Says It Could Drill 17,000 Marcellus Wells
EXCO Resources Reports 1st Quarter Results
Think Global-Act Local On Water: Vivian Williams
Editorial: Lung Assn. Sees Only Worst Case Air Pollution
Op-Ed: Forward Thinkers See The Light With Solar Power
Click Here for PA Capitol Digest

Tuesday, May 3, 2011

Senate Committee Unanimously Supports Richard Allan For DCNR

The Senate Environmental Resources and Energy Committee today unanimously supported the nomination of Richard Allan for Secretary of the Department of Conservation and Natural Resources.
A resident of Cumberland County, Allan has served as executive director for the Pennsylvania, Maryland and Delaware members of the Institute of Scrap Recycling Industries, and has served on the boards of the Pennsylvania Environmental Council and Pennsylvania Resources Council.
Acting Secretary Allan was a founding member of Back Mountain Recreation, Inc., a recreation and environmental facility in Luzerne County. He was also a founding member of the North Branch Land Trust, which provides management to more than 10,000 acres of land in Northeastern Pennsylvania.
The Department of Conservation and Natural Resources is responsible for maintaining and preserving the 117 state parks; managing the 2.1 million acres of state forest land; providing information on the state's ecological and geologic resources; and establishing community conservation partnerships with grants and technical assistance to benefit rivers, trails, greenways, local parks and recreation, regional heritage parks, open space and natural areas.
Video of the hearing is available on the Committee webpage.
The panel also unanimously approved the following eight bills:
-- Senate Bill 292 (Eichelberger-R-Blair) increasing bid limits for flood control projects;
-- Senate Bill 308 (Pippy-R-Allegheny) further providing for the eligibility of sewer laterals for funding;
-- Senate Bill 367 (D.White-R-Indiana) authorizing the leasing of mineral rights on other state lands and depositing the proceeds in the Environmental Stewardship Fund. The bill was amend to require a minimum of 50 percent of revenue received from bonus and lease payments to go to the Environmental Stewardship Fund or the Key '93 Fund. The remaining revenue will go into the General Fund. All money derived from the PA State System of Higher Education land will be deposited into the Key '93 Fund;
-- Senate Bill 460 (Yaw-R-Bradford) further providing for oil and gas leasing payments. The bill was amended to further defines and details "division order", "interest owner" and the items listed on the check stub, including contact information. Removes Section 3.3 through Section 3.9 dealing with late payments and dissolution of the lease;
-- Senate Bill 469 (Argall-R-Schuylkill) encouraging landowners to make land and water areas available for public recreation and was changed by a technical amendment;
-- Senate Bill 618 (Yudichak-D-Luzerne) providing independent counsel for Environmental Quality Board;
-- Senate Bill 791 (Earll-R-Erie) further providing for bluff setbacks along Lake Erie; and
-- Senate Bill 898 (Tomlinson-R-Bucks) further providing for the temporary cession of noncoal mining operations.
Sen. Mary Jo White (R-Venango) serves as Majority Chair and Sen. John Yudichak (D-Luzerne) serves as Minority Chair.
Copies of amendments and a video of the hearing are available at the Committee webpage.

Tuesday NewsClips

DEP Rolls Back Shale NOV Approvals
Editorial: Flawed Drilling Impact Fee Bill
State Has Big Surplus Thanks To April Taxes
Marcellus Tax Payments In Spotlight
Revenue Dept. Overs View Of Marcellus Shale Tax Payments
Limits On Gas Drilling Adopted In Ohio Township
Maryland AG Will Sue On Chesapeake Energy Spill On Susquehanna
PA Initiatives, Mid-Atlantic Highlands Action Program
Bethlehem Unveils 10.9 Mile Heritage Trail
Hundreds Flock To Flight 93 Site
Click Here for PA Capitol Digest

Drilling Industry Paid More Than $1 Billion in State Taxes Since 2006

At the direction of Gov. Tom Corbett, the Department of Revenue this week released an analysis showing that companies engaged in and related to natural gas drilling activities in Pennsylvania have paid more than $1.1 billion in state taxes since 2006.
Those taxes came on top of the billions of dollars of infrastructure investments, royalty payments and permit fees paid by the industry.
The Revenue Department’s analysis, which breaks out tax payments from oil and gas companies and their affiliates through April 2011, indicates that 857 of these companies have already paid $238.4 million in capital stock/foreign franchise tax, corporate net income tax, sales/use tax and employer withholding to the state in 2011.
These figures from the first quarter of this year already exceed by nearly $20 million the total tax payments made in all of 2010.
The department’s analysis also identified $214.2 million in personal income taxes paid since 2006 attributable to Marcellus Shale lease payments to individuals, royalty income and sales of assets.
A comprehensive analysis of personal income tax paid on Marcellus Shale business profits is not feasible because the department cannot conclusively determine what profits from Marcellus Shale partnerships, S corporations and LLCs were passed through to individuals as opposed to C corporations, which are taxed at 3.07 percent and 9.99 percent, respectively.
However, the department can determine that these oil and gas companies, and their affiliates, include 1,096 pass-through businesses. These businesses reported $675.4 million in 2008 income.
These numbers will be updated monthly.
The PA Budget and Policy Center released a study of Marcellus tax revenue last week said 85 percent of the 783 natural gas drilling companies paid nothing in corporate net income tax in 2008.

Renew Growing Greener Coalition Recognizes Scarnati Impact Fee Proposal

The Renew Growing Greener Coalition issued the following statement from Executive Director Andrew Heath in response to Senate President Pro Tempore Joseph Scarnati's (R-Jefferson) release of his Marcellus Shale Impact Fee last week:
"The Renew Growing Greener Coalition is pleased that Sen. Scarnati is getting involved in the Marcellus Shale discussion – this is a positive step forward. We also appreciate that Senator Scarnati has made numerous comments in the press over the past year expressing the importance of funding Growing Greener.
"The Coalition has concerns about the legislation, but look forward to learning more about the environmental funding component and how the legislation will fund Growing Greener.
“Although the proposal does not specifically mention the Environmental Stewardship Fund, nor Growing Greener, we are hopeful that the Governor and members of the legislature will recognize the significant benefits of addressing environmental, conservation and recreation priorities at the same time that our environment and communities are being impacted by the rapid development of Marcellus Shale gas.”
Being offered as an Impact Fee, the Senator’s proposal is the first of its kind. Severance Tax proposals have been offered by Sen. John Yudichak (D-Luzerne), Rep. Camille George (D-Clearfield), Rep. Kate Harper (R-Montgomery) and Rep. Greg Vitali (D-Delaware) and each include funding for the Environmental Stewardship Fund (Growing Greener). Details on how Sen. Scarnati’s Impact Fee will fund Growing Greener are still unknown.
The Governor's proposed budget shows $27.4 million available for Growing Greener, an 82 percent reduction in funding from its average of $150 million a year over the last six years. The reduction is due to the Growing Greener II Bonds being depleted and the diversion of GrowingGreener I funds to pay the Growing Greener II Bond debt service payment.
Using funds from an impact fee or severance tax to fund the Environmental Stewardship Fund would ensure that Growing Greener continues to maintain the environmental health of our communities and to protect the natural resources that are critical to the future of the Commonwealth, its economic well being and quality of life for our citizens.
The Renew Growing Greener Coalition is the Commonwealth’s largest coalition of conservation, recreation and environmental organizations representing more than 250 organizations and government entities.

Monday, May 2, 2011

PA Conservation Districts Applaud Sen. Scarnati's Marcellus Fee Proposal

Reinforcing his strong support of the environment and the 66 conservation districts across the Commonwealth, Sen. Joseph Scarnati (R-Jefferson) proposed a vital, permanent source of revenue that aims to protect and serve Pennsylvania’s communities, local governments and environment for years to come.
“The new impact fee proposed by the Senator sends a clear message to his colleagues in the Senate and House that a new stream of funding from the valuable Marcellus Shale resource is indeed the right thing to do for Pennsylvania, its communities and environment,” said Robert B. Maiden, Executive Director of the PA Association of Conservation Districts. “If Pennsylvania is to develop this industry responsibly, organizations like the Conservation Districts and local governments must have the essential tools and capital available to continue to protect, preserve and enhance our environment. Senator Scarnati’s proposal does just that.”
Sen. Scarnati’s plan provides a base $10,000 fee per gas well, with mechanisms in place for the fee to be raised depending on the life of the well and the price of natural gas. An estimated $121.2 million in fees would be collected by March 1, 2012, including a retroactive $45 million generated from wells drilled in 2010. Most of the revenues would be distributed to local governments through a Local Services Fund, with smaller portions of the fee distributed to county conservation districts and statewide environmental and infrastructure impacts.
As the Marcellus Shale development continues and expands, so does the responsibility of the Conservation Districts to the region’s they serve. The proposed fee would allow the District’s to continue to provide vital services from permitting to improving water quality, open space, farm land preservation, air quality and streambank erosion programs. These programs, in addition to the myriad of other services that the District’s offer to their communities, will be guaranteed to expand and grow with the implementation of an impact fee.

Monday NewsClips

Editorial: Drilling Impact Fee Is A Good Start
Blog: Corbett, What's Difference Between Fee, Tax?
Editorial: Enact Severance Tax For Marcellus Gas
John Baer: Time For Ringmaster Corbett To Begin His Budget Circus
Op-Ed: NE Residents To Create Ordinance To Ban Fracking
Marcellus Shale Boom Creates Business For Lawyers
Williams Not Tapping Utica Shale
Coldwater Grants Boost Grassroots Conservation
Wetlands Festival At Wildwood Park
New Field Of Green At Longwood: A Solar Farm
Editorial: Mass Transit's Future, Can You Say Private?
Bin Laden's Death Sparks Trip To Flight 93 Crash Site
Click Here for PA Capitol Digest

Subscribe To Receive Updates:

Enter your email address:

Delivered by FeedBurner