We can agree on this gas-drilling fee

By Marguerite Quinn

When the legislature reconvenes this month, it will consider more than 100 proposals specific to a gas-drilling industry that could drive Pennsylvania's economic recovery and pave the way to energy independence. Most deal with environmental protection. A growing number would impose a tax, fee, or both on the extraction of natural gas. And many are in line with the recent findings of the Marcellus Shale Advisory Commission, which recommended that drillers pay impact fees.

I introduced one such proposal in May. That legislation, House Bill 1700, would raise revenue by assessing an impact fee starting at $50,000 on every well using the hydraulic fracturing, or "fracking," process to extract shale gas. The fee would decline as time passes and as production decreases. It would generate $400,000 per well in the first 10 years, which is more than any other fee proposal introduced to date.

This legislation was designed to be balanced, meaningful, and politically feasible. Gov. Corbett has repeatedly said that he would not sign a bill that imposes a tax on the gas-drilling industry to raise general revenue for the state. He has, however, expressed support for a fee to be used to mitigate the impact the industry has on communities.

My plan was crafted with these parameters in mind. It takes production volume into account with a graduated fee schedule, but it does not include the market price and production calculations that would be taken into account by a tax. All of the revenue generated would go to mitigation of the industry's impact on communities, environmental protection, and highway funding. None of it would go to the state's general fund.

The legislation would generate reliable funding for communities dealing with gas-drilling impacts ranging from infrastructure to human services. It would provide revenue to such statewide environmental programs as Growing Greener and the Hazardous Site Cleanup Fund. And a 20 percent share directed to the Motor License Fund would help rebuild the state's roads and bridges.

As with the state's gambling law, the distribution of revenues from impact fees will be a difficult question. Everyone wants a piece of the revenue pie, and every legislator wants to do what she thinks is best for her district.

My plan offers a compromise. It directs 50 percent of the revenue to local governments to help them bear the unexpected costs of hosting this industry. The other 50 percent goes to statewide funds, because the industry does indeed leave a statewide footprint with respect to both infrastructure and the environment. State agencies must have the resources to address issues that will inevitably cross municipal boundaries.

The debate over whether a natural-gas fee or tax will be imposed appears to be over: An impact fee is in our future. H.B. 1700 offers a balanced approach that accounts for the state's geographic, economic, and political diversity.