Drilling rules: Affected towns must have role

Pennsylvania lawmakers' work on natural-gas legislation has stirred up local governments on the front lines of the state's Marcellus Shale boom who are afraid of losing municipal powers over how the industry operates.

The state must have broad powers to regulate drilling, but the local governments make some valid points.

Both the state House and Senate are considering measures that would set some new drilling rules and charge an impact fee, most of which would go to local governments. However, the fee will have unprecedented strings attached. Proposals in both houses would preempt local governments from using their land-use powers to set rules that might upset the gas industry.

In the Republican-run House, the finance committee has passed a far-reaching measure, with the 15-10 vote falling strictly along party lines. House Bill 1950 follows the approach Gov. Corbett recommended on preemption.

Douglas Hill, director of the County Commissioners Association of Pennsylvania, says the group has "huge problems" with the House bill. "It's a complete preemption of our ability to do anything if it falls under the definition of oil and gas or environmental law, and both those definitions have been expanded . . . The House version has things the industry has never complained about."

Meanwhile, Senate President Joe Scarnati (R., Warren) has proposed using the carrot of revenue sharing to induce local governments to accept modest but important restrictions on their powers over shale drilling. An early version of his Senate Bill 1100 called for the state to develop a model shale-drilling code and impose it on local governments as the price for collecting impact fees. That bill is being reworked in committee.

Both GOP-sponsored measures run contrary to Republican talk about the value of local control and letting local decisions be made closest to the people affected.

It makes sense for the legislature to set statewide standards for some aspects of shale drilling. Technical matters such as well-casing requirements, financial bonds, air and water pollution, and water access rights are legitimate state-level concerns. Where more traditional local concerns are at issue, such as zoning, noise, and lighting, state requirements should set a floor that leaves local governments free to fine-tune the standards as needed for community conditions.

While imposing strict strings, the House Finance Committee's proposed impact fee is just a pittance - only about 1 percent of a well's production over its lifetime, according to the Pennsylvania Budget and Policy Center. Counties could decline to impose the fee if they so choose. Scarnati's Senate proposal is better, with a statewide fee that, over the life of a typical well, would roughly amount to a rate of 3.1 percent. That's still well below what drilling-friendly states such as Texas (5.4 percent) and West Virginia (6.1 percent) collect from their shale-gas drillers.

It seems the Republican-led legislature and Corbett are more interested in going easy on the shale-drilling industry than in making sure local concerns are properly protected and funded.