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For Immediate Release
November 15, 2011
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State Senate Approves Legislation to Provide Drilling Impact Fees;
Bill Increases Environmental Safeguards, Addresses Zoning Issues
HARRISBURG -- The state Senate today approved legislation
that would establish reasonable fees on gas drillers, establish strong
environmental safeguards, and strengthen oversight of the Marcellus Shale
drilling industry, according to Senator Joe Scarnati, R-Jefferson, who sponsored
the measure.
Passage of
Senate Bill 1100 comes after months of negotiation and compromise on a
number of areas, including how funding would be allocated and local zoning
issues.
"This legislation will help communities impacted by
drilling, provide for reasonable local zoning parameters and implement strong
environmental protections," Scarnati said. "Through a reasonable and
well-thought-out impact fee on shale companies, we can manage this tremendous
resource in a way that improves our economy, creates new jobs and opportunities
for our residents and protects our quality of life."
Scarnati said his proposal would impose a tax rate of
approximately a 3 percent on gas production – retroactive to 2010 -- that is
expected to generate tens of millions of dollars a year to help maintain roads
and sewer systems in communities affected by the drilling. It would also fund
statewide initiatives that finance infrastructure improvement, environmental
cleanups and open space.
Scarnati's bill would impose a sliding fee of $50,000 per
well in the first year of production, with a $10,000 reduction each subsequent
year. Starting in the 11th year until the 20th year of the well, an annual fee
of $10,000 is imposed.
According to estimates, the fee proposal would raise $94
million from wells that were producing gas this year, a figure that would rise
to $155 million next year and $255 million by 2014. Over the next five years
the fee will yield more than $1 billion dollars.
Approximately 55 percent of the fees generated would go to
counties and municipalities in the Marcellus Shale region and 45 percent to
statewide infrastructure projects, environmental programs and other projects
related to natural gas production.
Other funds also would be set aside for county conservation
districts, firefighter training programs, the Fish and Boat Commission and for
boosting availability of affordable housing.
The legislation also provide for standardized but flexible
zoning standards which would allow communities to retain reasonable control over
zoning power -- a "solid and important compromise" that Scarnati said has drawn
support from local government groups because it provides for local authority
while creating reasonable baselines.
Scarnati said the increased environmental safeguards
include increased setbacks, a listing of all chemicals used at a drill site,
provisions for water safety, an increase in well bonding, and increased
penalties for environmental violations.
"The Marcellus Shale industry is here to stay in
Pennsylvania – bringing us jobs, huge economic benefits and the potential for
energy independence," Scarnati said. "It makes sense to impose a reasonable
impact fee on the industry to provide the funding necessary to further protect
our natural resources, particularly at a time when our state is being forced to
stretch our tax dollars."
He pointed to the huge influx of jobs in the past several
years and the continued need for workers with a variety of skills to propel the
growing industry.
Researchers with the Marcellus Shale Education and Training
Center estimate shale drilling will require between 3,700 and 15,000 direct jobs
in central and northern Pennsylvania by 2013 and an additional 8,100 to 13,500
direct jobs in southwestern Pennsylvania by 2014.
In addition, the state Department of Revenue estimates that
natural gas drilling companies have paid more than $1.1 billion in taxes since
2006, including corporate taxes, sales taxes and employee withholding.
Contact:
CAROL MILLIGAN
(717) 787-6725
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