Marcellus Shale Advisory Commission report offers fuel for debate

The recommendations were voted a week ago. The parameters had been set months ago. So the report that Gov. Corbett's shale task force delivered to him Friday contained few surprises.

But the Marcellus Shale Advisory Commission's 137-page report does provide plenty of fuel for future debate.

For example: One of the panel's 96 recommendations addresses a concern of many residents in the Philadelphia region - whether any fee or tax is to be levied on the extraction of natural gas from the shale formation that underlies much of the rest of the state.

When Corbett created the panel in March, he barred it from looking at a tax. He has steadfastly opposed such a levy since his 2010 campaign. Recently, he has said he might consider an "impact fee" only after he heard from the commission. And on Page 114, a fee is what the commission favors.

On this red-hot issue, the panel said it "recommends the enactment of - or authorization to impose a fee for - the purpose of mitigating and offsetting" the cost of proven impacts of gas drilling on citizens and municipalities.

Examples of impacts, the report said, include damage to local roads, increased cost of police, fire, and emergency services, and "environmental remediation associated with natural gas development."

The panel did not suggest fee amounts or other specifics, but cautioned that any fee should reflect "the ongoing nature of certain impacts" - and should be imposed "in a manner that does not discourage . . . partnerships between well operators and local communities."

The panel also called for the Public Utility Commission to begin regulating the safety of the natural gas pipelines being built across the state - including those in the most rural areas. At the same time, it said the state should make it easier for pipeline companies to obtain permits.

And it called on the state Health Department to start a system for investigating health complaints and create a registry to follow people who live within a mile of any drilling or production site.

Among other recommendations in the report, which can be read at http://tinyurl.com/ShaleReport:

Training Pennsylvanians to work in the industry and promoting the use of vehicles powered by natural gas.

Doubling fines for environmental violations.

Increasing the distance between drilling sites and drinking-water sources or streams.

Increasing an operator's "presumed liability" for water-quality impairment to anywhere within 2,500 feet of a well. The current radius is 1,000 feet.

While the recommendations are just that - they would have to be implemented through regulatory changes or legislation - they will help shape arguments in the Capitol and across the state for months or even years.

Some of those arguments are sure to arise when the legislature returns from its summer break. Senate President Joe Scarnati (R., Jefferson), whose Western Pennsylvania district is dotted with drilling rigs and who had proposed legislation for an impact fee, said Thursday that the commission's work had merely delayed legislative action.

Scarnati also said it would be hard to get an impact fee approved unless part of it went to statewide programs.

While the advisory panel's membership was weighted toward the industry, and environmentalists were unhappy with some recommendations, the report was passed unanimously - with all four environmentalists on the 30-member panel voting in favor.

Environmentalists said the votes did not signal acquiescence. "If the goal was to form a consensus around these various recommendations that would ensure their speedy adoption, that's not happening," said Jan Jarrett, president of Citizens for Pennsylvania's Future, an environmental-advocacy group.

Jarrett termed the report "a mixed bag," but reserved special contempt for the fee proposal, which she dubbed "wholly inadequate" and part of "this absurd effort to get to the governor an impact fee or tax that he will sign."

The main industry trade group, the Marcellus Shale Coalition, did not comment on specifics but said through its president, Kathryn Klaber, that the industry "stands ready to work with the regulatory community and General Assembly on modernizing Pennsylvania's laws and regulations."

Associated Petroleum Industries of Pennsylvania executive director Rolf Hanson echoed that sentiment, and praised the panel's call for high standards in well construction materials, such as casing and cement.

The Pennsylvania Environmental Council called for a special legislative session to consider the proposals. "So now it's time to act. And to act fast," said the group's president, Paul M. King, noting that talk of shale rules had gone on for more than two years, while the state approves more permits for wells "with each passing day."

Investment analyst Gerry Sweeney of Boenning & Scattergood said many of the proposals were ones the industry "understood and expected."

"Environmentalism has really come to the forefront," he said. "There's certainly a level of understanding at the industry that if you lose public trust . . . it's going to be that much more difficult to do business."

Critics saw the industry's hand in the report. "It is astounding that those who stand to profit most from our Marcellus Shale natural gas reserve have such a strong voice in the policies governing it," said State Rep. Lawrence Curry (D., Montgomery).