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Marcellus Shale Plan Must Hold Industry Accountable
For years, the General Assembly has struggled to pass a much needed natural gas drilling impact fee. We have discussed and debated an impact fee combined with critical environmental regulations for Marcellus Shale only to come up short. The recently approved impact fee legislative plans that were passed in the state Senate and the House also fall woefully short, amounting to a missed opportunity, likely never to be seen again.
The overall product of the separate pieces of legislation (Senate Bill 1100 and House Bill 1950) approved in the Senate and the House were disappointing, to say the least.
The proposal my Senate Democratic colleagues and I recommended was far better than either bill approved in the Republican-controlled House and Senate. The Senate Democratic plan would have raised significantly more revenue and implemented stronger environmental protections while protecting local zoning authority. Unfortunately, this proposal was voted down.
The Republican legislation squanders our best chance to create new job opportunities for infrastructure, energy and economic investments and instead adopts an embarrassingly low tax rate that falls far short of our needs.
While there are concepts in SB 1100 that are worthy of support, there are also many areas where the legislation is deficient. Senate Bill 1100 provides a paltry $14 million in the first year for environmental programs -- well short of the minimum $75 million goal that was suggested by respected environmental groups. I fought to bolster funding by amending SB 1100, but was once again blocked by Senate Republicans.
Unfortunately, the minimal fee stipulated by SB 1100 and the totally inadequate fee proposal contained in the House plan (HB 1950) would leave us far short of the funding needed to make a real difference. In stark contrast by 2014 our Senate Democratic alternative would have supported $750 million in additional infrastructure investment compared to the meager Republican plans.
House Bill 1950 would impose the third lowest effective tax rate among all 31 shale producing states. Senate Bill 1100 would be the 5th lowest tax rate. The Senate Democrats proposal would put Pennsylvania at 7th lowest among all states.
The Republicans argued that levying a more robust fee on the industry would cause them to drill elsewhere. However, states frequently referenced as alternatives to Pennsylvania for drilling -- Texas and West Virginia -- have much higher effective rates on natural gas production than the rate proposed by Senate Democrats. Moreover, New York has a drilling moratorium in place until environmental studies are performed while the Ohio legislature has two bills pending that would do likewise.
Senate Democrats had high hopes for a plan that would responsibly regulate and tax the shale industry. We were reasonable and open minded in our negotiations and tried to be balanced in our approach. Our efforts were rebuffed by Senate Republicans.
However, this fight is not over. We will have other opportunities to improve the bill before it reaches the governor’s desk. The bottom line is that we must ask more from this industry.
The Marcellus Shale plan should do three things: protect Pennsylvania’s environment and its people; generate adequate revenue; and give local government the ability to protect their communities. Anything less than that is unacceptable.
I urge you all to contact your local state representative, senator and the governor to voice your concerns and displeasure regarding this industry-driven half measure.
View Summary of all Plans
ALERT! EPA Announces Fracking May Cause Groundwater Pollution
You can find out more specifics about the Marcellus Shale Plan and provide your feedback on my website at senatorhughes.com
as well as on Facebook and Twitter (@SenatorHughes).
Offices of State
Senator Vincent Hughes