| Share this: | ||||
|
|
|
|
|
|
Opinion- A Marcellus Shale Fee Is In Our Future, Let's Do It Right
|
|
Rep. Marguerite Quinn (R-Bucks)
The shale natural gas drilling industry has the potential of being the cornerstone of economic recovery for the state of Pennsylvania. If developed properly, the extraction of natural gas from Marcellus, Utica and Devonian shale formations could lead us toward energy independence and serve as a transitional fuel source while technology for renewable energy continues to develop.
The General Assembly returned from recess to more than 100 legislative proposals specific to the natural gas drilling industry. Most of the proposals deal with regulatory changes aimed at safeguarding our environment. Some of these proposals impose a tax, a fee or both on the extraction of natural gas. Many are in line with the findings of the recently released Marcellus Shale Advisory Commission Report, which included a recommendation for an impact fee.
In May, I introduced House Bill 1700, titled the Shale Impact Mitigation Policy for Local, Environment and Roads. If enacted, the SIMPLER plan would raise revenue by annually assessing each unconventional well (i.e., a well that extracts gas through the “fracking” process) with a fee that starts at $50,000. This fee would decline with the passage of time and as well production decreases.
This approach would generate $400,000 per well in the first 10 years, which is more revenue than other fee proposals introduced to date. My intent was to craft legislation that would be balanced, meaningful and could become law. To become law, a bill must garner 102 votes in the House and 26 votes in the Senate and then be signed by the governor.
Gov. Corbett has repeatedly stated that he will not impose a tax on this industry and will not sign a bill that has revenue going into the general fund. If the commonwealth adopts an impact fee, the governor’s stated intention is to direct the revenue generated to mitigate the impact this industry is having in our local communities.
The SIMPLER plan was crafted with these parameters in mind. The proposal takes production volume into account with a graduated fee schedule, but it does not include market price and production calculations that would make it a tax. None of the revenue would go into the state’s main coffer, the general fund. All of the revenue would be directed to dedicated funds used to mitigate impact on local communities hosting this activity, to environmental funds and to the state motor license fund.
The fee structure and distribution I have proposed would put in place reliable funding for communities dealing with impacts that range from infrastructure deficiencies to the need for more human services. It will provide revenue to ensure fiscal health for such statewide environmental programs as Growing Greener and the Hazardous Site Cleanup Fund.
The 20 percent revenue share directed to the motor license fund would be a component of the critically needed funding solution for rebuilding our statewide road and bridge infrastructure.
The debate whether a fee or tax will be imposed appears over. An impact fee is in our future. This would be consistent with the recommendation in the commission report, and it would put to rest the industry’s uncertainty in Pennsylvania by allowing it to more accurately project costs and profits.
The next and even greater hurdle in this discussion is the distribution of the revenue. As when gaming was introduced, everyone wants a piece of the revenue pie, and every legislator wants to do what he/she thinks is best for their district.
My SIMPLER plan presents a compromise in terms of distribution. The bill directs 50 percent of the revenue to local communities so they can keep up with the unexpected costs of hosting this industry and 50 percent to statewide funds.
The latter is because the industry indeed leaves a statewide footprint with respect to infrastructure and environmental issues, and state agencies must have the resources to address issues that cross municipal boundaries as will inevitably occur as this new era of growth matures.
House Bill 1700 is a balanced, SIMPLER solution to a debate that is complicated by our geographic, economic and political diversity. I encourage all Pennsylvanians to become familiar with the various proposals on this topic and to let legislators know which bill should become law.
Note: Press reports Friday indicated Gov. Corbett will announce all or part of his Marcellus Shale package on Monday, October 3.
|
|
10/3/2011 |
| Go To Preceding Article Go To Next Article |