A guiding principle of Gov. Tom Corbett's administration has been that regulation of the Marcellus Shale drilling industry must be uniform across Pennsylvania, so businesses will know what to expect and what their obligations are on a statewide basis.
The governor's long-awaited proposal for an impact fee, part of a broader plan on deep-well drilling that was announced Monday, flies in the face of a professed interest in consistency. Rather than a statewide shale impact fee, the governor wants to transfer the authority to the state's 67 counties. It would be up to county officials to adopt ordinances imposing a shale impact fee, which would be capped at $40,000 per well in the first year, dropping each year until years four through 10, when the limit would be $10,000 per well.
Because the bulk of the money would be distributed at the county and municipal level, the administration says it wants to give counties the power to determine whether they need an impact fee and at what level, and it doesn't think comparing the levy to regulations on land use and water and air quality is valid.
But if the governor's plan is adopted, it conceivably could pit neighboring counties against one another. Will county officials be so eager to attract drilling jobs that they'll want to offer a "discount" by not imposing the fee? Will local officials be more malleable to pressure from big corporations that play one county against another to avoid the additional cost of an impact fee?
Pennsylvanians, in survey after survey, have said they favor imposition of some sort of levy on drillers, so why dilute public support and risk establishing a confusing, patchwork approach? That's out of sync with the administration's approach in reorganizing the Department of Environmental Protection and moving decision-making toward Harrisburg and away from regulators in the field
Other elements of the impact fee proposal are troubling, too.
It is important for any levy to benefit the communities where wells will be drilled, and the governor's proposal gives counties and municipalities broad leeway in deciding how their share should be spent. The state's portion, however, would be too small under the fee schedule Mr. Corbett has proposed.
In the first year, for instance, it would bring $30 million to the state, funds that then would be allocated in ways that ignore environmental initiatives.
Beyond the impact fee, the governor's proposal offers improvements over the status quo. It would double penalties for violations, increase the space between drilling and ponds, rivers, streams, water wells and public drinking water supplies. It would extend the presumed liability of drillers both in distance from wells and in time. DEP would be able to take action against bad operators more efficiently. And it would provide incentives for use of natural gas-fueled vehicles. It would increase the amount of bonds for new wells from $2,000 to $10,000, although not high enough in our view.
- Pittsburgh Post-Gazette