Shale report calls for fee

Gov. Corbett's Marcellus Shale Advisory Commission on Friday made public its long-awaited recommendations on how drilling for natural gas should move forward in the state.

The 96 recommendations voted last week and contained in the 137-page report include imposing a local impact fee on drillers, doubling fines for violations and increasing the distance between drilling pads and streams, private water wells and public water supplies.

The report also calls for the Public Utilities Commission to begin regulating the safety of the natural gas pipelines being built across the state - including those in the most rural areas. At the same time, it says the state should make it easier for pipeline companies to obtain permits.

The panel also recommended training Pennsylvanians to work in the industry and promoting the use of vehicles powered by natural gas.

At least seven of the recommendations called for expanded involvement of the state Health Department, which the commission said should create a health registry that would follow people who live within a mile of a drilling or production site.

It also said the department should establish a system for investigating health complaints and train health care professionals to evaluate illnesses that may have been caused by drilling.

You can read the report here:

http://tinyurl.com/ShaleReport

In releasing the report, Lt. Gov. Jim Cawley, who chaired the commission, said, "Today, Pennsylvania is taking an important, first step toward creating tens of thousands of jobs and leading the nation toward energy independence and doing so in an environmentally responsible way."

Although the commission membership was weighted toward the industry, and environmental groups were unhappy with some of the recommendations, the report was passed unanimously.

While the recommendations are just that - they would have to be implemented through regulatory changes or legislation - they nevertheless will help shape debate on Marcellus Shale issues for months or even years to come.

In response to the report's release, the Pennsylvania Environmental Council, whose chairman, Anthony S. Bartolomeo, sat on the commission, called for a special legislative session to consider some of the proposals.

"So now it's time to act. And to act fast," said the council's president, Paul M. King.

"We've been discussing and debating Marcellus Shale legislation and regulations for more than two years. And with each passing day, the Department of Environmental Protection approves permit applications for new wells to be drilled somewhere in Pennsylvania," he said. "While [our group] does not support every recommendation in the Commission Report, there are a significant number of recommendations that did achieve consensus and which deserve immediate attention."

In particular, King said the legislature should consider incorporating all the environmental protection recommendations, expanding the permitting process to allow for regional comprehensive planning, giving the DEP the ability to deny permits based on impacts to public resources and ensuring that the DEP has the authority to adapt policies in response to new technologies or information.

Kathryn Klaber, president of the Marcellus Shale Coalition, said the industry group "stands ready to work with the regulatory community and General Assembly on modernizing Pennsylvania's laws and regulations."

"As an industry of engineers and scientists, who solve complex challenges and seek to innovate by the day, we continue to demonstrate our ability to rapidly develop new solutions, technologies and best practices to enhance Marcellus production," she said.

The four environmental groups represented on the 30 -member commission - the council, the Nature Conservancy, the Western Pennsylvania Conservancy and the Chesapeake Bay Foundation - released a joint response, saying that a number of the regulations "propose significant improvements in state law and policy."

But the groups said they remain concerned about a lack of environmental rules for "pooling," a controversial option that gives drillers access to natural gas beneath the surface of a holdout landowner. They also said the report should have recommended that a portion of impact fees be directed to environmental programs.

The groups said the viability of the state's Oil and Gas Lease Fund, which invests state income from leases and royalties into conservation projects, is threatened.

"We consider the report to be a meaningful first step toward improving Pennsylvania's oversight of shale gas extraction, but additional improvements must be accomplished as the debate shifts to the General Assembly," the groups said.

Currently, Pennsylvania does not regulate the gas pipelines that are being built to move natural gas from the wells to the network of interstate transmission lines. Earlier this year, the state Senate and the House passed different versions of a bill that would give the PUC the authority to do that.

But neither bill goes as far as the recommendations in the report, which says the rules should cover pipelines even in so-called "Class 1" rural areas. If passed, Pennsylvania would be the only state to extend safety rules to those areas.

"I think Pennsylvania is a good candidate for doing that," said Deborah Goldberg, a lawyer with EarthJustice, an environmental advocacy group. "People in agricultural areas deserve protection, too."

The commission also recommended increasing civil penalties for drillers' environmental violations from $25,000 to $50,000, and doubling the daily penalty to $2,000.

It recommended increasing an operator's "presumed liability" if impaired water quality is detected within 2,500 feet of a well. The existing radius for such liability is 1,000 feet.

The panel proposed enhanced inspections and a significant increase in well bonding amounts - up to $250,000.

Corbett formed the commission in March, giving it 120 days to develop recommendations on all aspects of natural gas drilling. He has steadfastly opposed taxing the extraction of natural gas, as other major drilling states do - and said he would be open to considering a localized impact fee only after he saw the commission's report.

According to the state, the commission held 21 public meetings, heard 60 expert presentations and reviewed more than 650 emails and letters from the public.