Pa. House OKs measure on natural gas regulations

HARRISBURG - House lawmakers concluded this week's marathon debate over Marcellus Shale drilling oversight on Thursday by matching their Senate colleagues in also approving a natural gas fee and regulatory measure.

After months of wrangling to get the legislation this far, now comes the truly difficult part: negotiating a compromise bill.

House Republican leaders were bullish in comments leading up to the 107-76 vote, describing their measure as a proposal that can and should reach Gov. Corbett's desk.

The governor's top aides issued a statement later, praising the House for passing the measure, which closely matches many of the proposals from Corbett's advisory commission and his October policy announcement.

"I look forward to continuing to work with the members of the General Assembly to enact a fair and comprehensive Marcellus Shale package this session," Corbett said.

But from the Senate side of the Capitol, concerns began to appear about whether the dozens of discrepancies in how lawmakers and the Corbett administration believe that drillers should be regulated can be promptly ironed out.

"It's going to take an enormous amount of work to get these bills reconciled and to the governor by the end of the year," said Drew Crompton, chief of staff to Senate President Pro Tem Joe Scarnati.

While the two chambers have near-identical provisions on how to smooth out differences in municipal rules for oil and gas operations, there are detailed distinctions between them over how to update the state's environmental rules.

Perhaps most significant are conflicts over assessing a drilling fee: Should each county decide whether to assess it, or should the state collect it? When should it go into effect? And what distribution method for those dollars that can muster enough votes?

Thursday's House vote was largely along party lines, with four Western Pennsylvania Democrats - Reps. Marc Gergely, Jaret Gibbons, Joseph Petrarca, and Frank Burns - joining the majority Republicans in support.

A half-dozen GOP legislators, most noted for their opposition to raising any new revenues, voted no.

The question of whether the "impact fee," as the proposal has been dubbed, is actually a tax increase arose throughout the floor discussion.

House Democrats, who have repeatedly called for an assessment on drillers, described it as such, in a reference to the Americans for Tax Reform no-tax-hike pledge that many of their GOP colleagues have signed.

But while Democrats have called for a state-level tax, they said the current proposal is too low to provide sufficient funds for environmental programs and community impacts.

"Why would anyone break that pledge for such a bad bill?" asked House Minority Whip Mike Hanna (D., Clinton). "We should be supporting a robust severance tax that provides protection to Pennsylvania's water, air, and land."

Others criticized it for not sufficiently raising environmental standards and for reserving most of the dollars for local governments.

"We don't say the taxes raised in the five southeastern counties should just stay there," said Rep. Mike Gerber (D., Montgomery). "But when you have an economic opportunity, you want to keep it all."

Republicans defended the proposal as an approach that balances the needs to encourage economic development and to ensure that gas extraction is done safely.

"It's been about jobs, jobs, jobs, private-sector job creation, and providing safety and protection of our environment," said House Majority Leader Mike Turzai (R., Allegheny).

Proponents also pointed to a letter from Renewing Growing Greener, a group encouraging new investments in the conservation program. The organization urged support, calling it "a real opportunity to secure sustainable funding for Growing Greener."

The measure would allocate about $2 billion over the next 15 years to the state fund that pays for Growing Greener, said Rep. Dave Reed (R., Indiana).

"It's time that we put our own definitions of perfect aside to do something to protect our children, our communities, our environment, and our water supplies," Reed said.

Under the House version, counties would be allowed to implement a fee on producing wells at a rate of up to $40,000 per well in the first year and decreasing annually to $10,000 in years four through 10.

About 75 percent of those dollars would go to counties and townships, with the remainder going to statewide projects.

Additionally, some of the state's royalties from state-owned wells would go to environmental programs like Growing Greener, as well as providing incentives for natural gas use.

The measure would increase the setback distance between a well and any nearby waterways or buildings, boost bonding requirements and penalties, and increase the required information to be released on hydraulic fracturing chemicals.

It also would set a state standard for local zoning ordinances related to drilling, authorizing the attorney general to determine whether municipal rules go too far.