Department of Environmental Protection Secretary Michael Krancer told the Senate Appropriations Committee Thursday  his agency reduced the backlog of permit applications from a high of 11,000 permits to just over 6,000 as a result of using uniform permit processing procedures and getting rid of the inactive or unwanted permits in the backlog.

Secretary Krancer answered questions for about 90 minutes before the Committee, after spending more than 2 hours in from of the House Appropriations Committee on Wednesday.

Click Here to watch a video of the DEP budget hearing.

He provided the Committee the same 11-page written testimony he gave the House in which the Secretary said, “DEP is proud to be an active partner in delivering on Gov. Corbett’s promise to make state government more efficient and customer-service-oriented and get DEP back to its core function of protecting public health and the environment.”

He noted, “This is Gov. Corbett’s third consecutive budget requiring no furloughs at DEP -  a marked distinction from the prior administration.” Note: the proposed FY 2013-14 budget calls for the elimination of 40 staff positions.

His remarks highlighted the agency’s accomplishments in 12 areas--

-- Permit Review Process and Permit Decision Guarantee;

-- Southeastern Pennsylvania Refineries;

-- Act 13’s Natural Gas Vehicles Grant Program;

-- Acid Mine Drainage Initiative and Success Stories;

-- Susquehanna River Study Efforts;

-- Homer City Generating Station Permitting;

-- Oil and Gas Program Electronic Permitting;

-- Air General Permit 5 and Air Emissions Statewide;

-- Recommended Delisting Presque Isle Bay from the List of Great Lakes “Areas of Concern;”

-- Elimination of Redundancies;

-- West Nile Virus - Record Acreage; and

-- Public Outreach and Compliance Assistance Webinars.

The bulk of the Secretary’s appearance before the Committee was taken up by questions from members.  They included--

Permit Backlog: Sen. Gene Yaw (R-Bradford), Majority Chair of the Senate Environmental Resources and Energy Committee, said he understands the agency had as much as an 11,000 permit review backlog and asked for a status of the backlog.  Secretary Krancer said the new Permit Decision Guarantee Program has helped to reduce the backlog by 40 percent.  The backlog is now just over 6,000 permits.  Sen. Yaw followed-up by asking if all the permit reviews met environmental standards.  Secretary Krancer said all permit reviews do meet environmental standards.

Sen. Pat Vance (R-Cumberland) also asked about the permit backlog and asked for more background.  Dana Aungst, Deputy Secretary for Field Operations, said clearing out the initial backlog involved getting old inactive and unwanted off the backlog.  The remaining permits will be harder to deal with, but the goal is to eliminate the backlog by July 1.

Susquehanna River Impairment: Sen. Yaw said many anglers have told him the Susquehanna River fishing isn’t what it used to be and asked what DEP’s assessment is.  Secretary Krancer said the Susquehanna River quality has steadily improved pointing to a report issued by the Susquehanna River Basin Commission last week noting the improvement.  Secretary Krancer said no agency has yet identified the cause of lesions on fish in the river.

Sen. Vance asked who is responsible for checking on the  issues related to the fish.  Secretary Krancer said several agencies have responsibility, including the Fish and Boat Commission, noting he would like to work in partnership with those agencies on the issue.  

Secretary Krancer pointed to a letter from the Chesapeake Bay Foundation in Thursday’s Patriot-News suggesting DEP and the other involved agencies commit to a clearly defined public engagement process on the issue and he said he thought that was a good suggestion and intends to follow up.

Drilling Fee Increase:  Sen. Yaw asked if DEP had “enough boots on the ground” to regulate Marcellus Shale drilling.  Secretary Krancer said yes the agency has enough staff, but the department is reviewing the existing fee structure which is at the end of its anticipate three year life and will be making a recommendation on that issue sometime this year.  He added that “those boots are marching.”

Reuse Of Mine Water: Sen. John Yudichak (D-Luzerne), Minority Chair of the Senate Environmental Resources and Energy Committee, asked what plans DEP has to encourage drilling companies to reuse abandoned mine drainage in their operations.  Secretary Krancer said it would be up to the drillers to arrange for using mine drainage for drilling water.  DEP said the white paper produced by the agency has laid out a process for using mine drainage and that in itself is encouraging drillers.

Drilling Waste Radiation Study: Sen. Yudichak asked how long it will take to undertake the drilling waste radiation study DEP announced last week.  Secretary Krancer said the study will take about 14 months.

Locating Abandoned Wells: Sen. Yudichak noted there are thousands of abandoned wells in Pennsylvania and asked what steps DEP is taking to locate those wells.  Secretary Krancer said as part of the process for obtaining new drilling permits operators are required to locate abandoned wells, but would provide the Senator with more information.

Auditor General Marcellus Water Audit:  Sen. Yudichak asked what the status of the Auditor General’s audit of DEP’s Marcellus Shale Water/Waste Program.   Secretary Krancer said an initial meeting has been scheduled with the Auditor General’s office and are ready to cooperate with the audit.  He added the department is always open to improve its program.  Note: Auditor General Eugene DePasquale sent a letter to DEP January 15 announcing the general scope of the audit.

Public Accessibility: Sen. Jim Ferlo (D-Allegheny) expressed concern about the availability of Secretary Krancer at public meetings and hearings, noting DEP did not attend a recent House Democratic Policy Committee hearing this week on Marcellus Shale drilling water testing.  The Senator asked if the Senate Democratic Policy Committee invited him to attend a meeting would he?  Secretary Krancer said he is available for public meetings depending on his schedule.  He noted he did attend a House Democratic Policy Committee hearing chaired by Rep. Mike Sturla (D-Lancaster).

Number Of Gas Wells: Sen. Ferlo said there is a debate over how many permitted natural gas wells there are and asked if the department could provided the location of permitted wells and those in process.  Secretary Krancer said he would provide that information.

Policy For Fining Drilling Operations: Sen. Ferlo said there were over 1,100 violations issued in 2011, but not one of those resulted in fines. He asked why those violations did not result in fines.  Secretary Krancer noted the number of inspections of drilling operations have increased from 10,000 to 12,000 inspections over the past year.  He went on to explain not all notices of violation result in fines and never have in any of DEP’s programs.  He also noted DEP issued the highest fine ever levied on a drilling company of over $1 million in 2011.

On-Lot Septic Systems/Buffers: Sen Lisa Baker (R-Luzerne) said she has a concern about new regulations being considered by the Sewage Advisory Committee to require buffers along high quality and exceptional value streams as a result of an Environmental Hearing Board decision.  She said there would be a significant problem in Wayne and Pike counties in implementing that requirement and asked if Secretary Krancer can meet with citizens there to talk about their concerns.  Secretary Krancer he would be happy to discuss the concerns.

Conservation District Funding: Sen. Baker expressed concerns about eliminating General Fund funding for conservation districts and relying totally on Act 13 drilling fee monies.  She said there is a particular problem for those districts without Marcellus wells, but which do have pipeline activity they must regulate. Secretary Krancer said he believed the reliance on Act 13 funding would be a more stable source of funding for districts in the future.

Sen. Judy Schwank (D-Berks) also expressed concern about conservation district funding, commenting that county governments are backing away from funding districts.  She also noted building activity has been down and therefore fees coming to districts are also down.  The Senator also said she thought the idea was for Act 13 drilling fees to supplement General Fund appropriations not taking its place.

Senators Pat Vance (R-Cumberland) and Sen. David Argall (R-Schuylkill) also expressed concern about conservation district funding.

Note: Act 13 Marcellus Shale drilling impact fees provide conservation districts about $5 million in 2013-- $2.5 million distributed to counties for districts from the PUC, $2.5 million to the State Conservation Commission for distribution to districts.  While cut of $3.8 million to the line items in Agriculture and DEP is less than the $5 million in Act 13 fees districts are proposed to get, the impact on individual county districts will vary.  Some may get less, some may get more that if the line items were made whole.

Funding Sewage Systems: Sen. Schwank asked whether there are cheaper alternatives to providing sewage treatment services to small communities which lack the resources to fund expensive systems on their own.  Secretary Krancer said he would like a conversation about better alternatives for providing sewage services.

Uniformity Between Regions: Sen. Tim Solobay (D-Washington) asked if there is more uniformity in decision making between regions now than there was before and explained some of the issues he faced in the past.  Dana Aungst, Deputy Secretary for Field Operations, said DEP underwent a reorganization in 2011 to better align programs within the department.  Aungst also said they established uniform procedures for reviewing permits in the agency as well as established the Permit Review Guarantee Program to better manage permit reviews.  He also said more effective communication between regions and central office has been important ito improving consistency in permit reviews.

Power Plant Air Emissions: Sen. Solobay asked how some experts in the health community and the U.S. Environmental Protection Agency could say air pollution is getting worst as a result of coal-fired power plants and others say it’s getting better. Secretary Krancer said there has been a significant reduction in air pollution as a result of using more Marcellus Shale natural gas and other factors.  Those changes have resulted in $14 to $37 billion in air quality benefits.

Electronics Recycling/Recycling: Sen. Vance asked for more background on the new electronics recycling program.  Secretary Krancer said he would get the Committee more information and noted the Recycling Industries Congress held recently in the Capitol is just one indication of the interest the public and private sectors have in recycling. 

The Secretary said, in response to a question from Sen. John Blake about recycling markets, that DEP is never satisfied with where they are in any program and strive to do better.

Sen. Yaw asked for the Secretary’s commitment to take a look at the curbside recycling program, in particular the option of single stream recycling by private industry, to see if changes in the program would make sense given the number of years recycling has been required. 

Sen. Yaw also noted there is not a lot of recycling in the Capitol Building for paper and plastics and there should be.

Pittsburgh Summer Gasoline: Sen. Elder Vogel (R-Butler) asked what the status of the study, required by law last year, analyzing the requirement for special summer low RVP gasoline in Pittsburgh.  The Senator said the unique gasoline requirements cause the cost of gasoline in the Pittsburgh area to increase 20 to 30 cents per gallon at a time when gasoline prices are already high and going higher. Secretary Krancer said DEP is still in the process of studying the issue.  He pointed out the requirements to lower ozone emissions is a federal law and if the state eliminates controls in one area it will make them up in other areas.

Scrap Tire Cleanup: Sen. David Argall (R-Schuylkill) noted 95 percent of the scrap tire piles have been cleaned up over the last few year, and asked when the remaining piles will be cleaned up.  Secretary Krancer said he could get back to the Senator.

Sen. Randy Vulakovich (R-Allegheny) also asked for information on the status of scrap tire pile cleanups.

Sewage Facilities/Enforcement Grants: Sen. John Blake (D-Lackawanna) noted the proposed budget zeroed out Senate Facilities and Sewage Enforcement Grants for the second year in a row and asked for a status report.  Jeffrey Logan, Deputy for Administration, said there are funds available through the Act 13 drilling fees to Marcellus Shale counties and municipalities directly and through the Commonwealth Financing Authority for others.

Flood Control Funding: Sen. Blake expressed a concern about the lack of funding for flood control projects in the proposed budget.  Secretary Krancer said Act 13 Marcellus Shale drilling fees will provide some additional funding to address that issue.

Sen. Mike Waugh (R-York) also expressed concern about flood control funding. He also noted the complexity of regulations on farm pond construction, including posting bonds.

Natural Gas Vehicles Program: Sen. Blake asked about the status of the new Natural Gas Vehicle Program.  Secretary Krancer said judging from the interest at the public meetings held so far, he thought the program would be oversubscribed.  He also pointed to the existing Alternative Fuel Vehicle Incentive Grants Program is also available.  The Secretary said there are also efforts underway for DEP and the state to buy its own natural gas vehicles.

Hazardous Sites Cleanup: Sen. Bob Mensch (R-Montgomery) noted there are still many sites needing cleanup under the Hazardous Sites Cleanup Fund and asked where will the money come from to finance the program with the Capital Stock and Franchise Tax being eliminated.  Secretary Krancer said there is some time to consider options for funding the program and there should be a robust discussion on funding alternatives.  Jeffrey Logan, DEP Deputy for Administration, said the Fund will receive a total of about $80 million in the current and next fiscal year and then the Fund will receive funding from Marcellus Shale drilling fees.  Logan said in FY 2014-15 the department should have about $30 million available to do hazardous sites clean-ups. In FY 2015-16 there will be a “wind-down period” for the program.

MS4 Stormwater Implementation: Sen. Mensch asked for the status of implementing the MS4 Stormwater Permit program.  Secretary Krancer said the agency had resolved some of the issues with the way the U.S. Environmental Protection Agency told the state to implement the program.  He said DEP is working with municipalities on implementation.

Land Recycling: Sen. Randy Vulakovich (R-Allegheny) asked where there brownfield projects that could not be accomplished because of funding.  Secretary Krancer said he has been involved in a several Land Recycling projects across the state and it is one of his passions, especially, as an avid hockey fan, the hockey rink in Allentown.

PennVEST Funding: Sen. Mike Waugh (R-York) said he noted there was an increase in funding for the PA Infrastructure Investment Authority and asked if there could be funding offered to seniors and others to help install on-lot septic systems or their share of sewage systems.  Secretary Krancer said PennVEST is a separate agency, but offered to discuss the issue with the Senator.

Gravel Quarry Fees: Sen. Yaw, on behalf of Sen. Baker, expressed a concern about the increase in permit fees for non-coal surface mining operations, in particularly small gravel mines.  Secretary Krancer said the fee increase was needed to fund the regulatory program and had not been

Bradford County Stream Cleaning Pilot Project: Sen. Yaw asked about the status of the Bradford County Stream Cleaning Pilot Project.  Secretary Krancer said he would provide the Committee with an update.

Securitization Of Drilling Fees: Sen. Yudicak asked if the Secretary supported the securitization of some of the drilling fee revenues to help communities fund flood control and other projects.  Secretary Krancer said he would provide the Committee with an answer, saying he was not sure what Act 13 said on the issue.

Loss Of Federal Abandoned Mine Funds: Sen. Yudiack asked for the status of the potential loss of federal abandoned mine reclamation funds to the Commonwealth due to a change made to federal law last year.  Secretary Krancer said he get back to the Committee with an answer.

Southeast Refineries: Sen. Tommy Tomlinson (R-Bucks) thanked the Secretary for helping to save the jobs at several refineries in the Southeast and asked about the potential of changes at the refineries to reduce emissions.  Secretary Krancer said the lower emissions will come from several changes.  The Marcus Hook will not longer be a refinery but will be used to blend projects.  The remaining refineries will use a difference crude oil with lower sulfur content which will reduce emissions.

A copy of Secretary Krancer’s written testimony is available online.  Click Here for links to all available Senate budget hearing videos.

Upcoming Budget Hearings:

February 25-- Senate Appropriations Committee budget hearings: 3:00 Department of Conservation and Natural Resources. Hearing Room 1, North Office.

February 26-- Senate Appropriations Committee budget hearings: 3:00 Department of Health. Hearing Room 1, North Office. 

February 27-- CANCELED. Senate Appropriations Committee budget hearings: 2:30 Department of Environmental Protection.  Hearing Room 1, North Office.

March 5-- Senate Appropriations Committee budget hearings: 3:00 Department of Agriculture. Hearing Room 1, North Office.

March 5-- House Appropriations Committee budget hearings: 9:30 Department of Agriculture; 11:30 Department of Conservation & Natural Resources.  Room 140.

March 6-- Senate Appropriations Committee budget hearings: 9:30 Department of Transportation.  Hearing Room 1, North Office.

March 6-- House Appropriations Committee budget hearings: 1:30 Public Utility Commission/Small Business and Consumer Advocates.  Room 140.

March 7-- House Appropriations Committee budget hearings: 10:00 Governor’s Budget Office; 1:00 House Member Testimony.  Room 140.

The PA Cable Network broadcasts all budget hearings on TV and online or you can watch through the Senate Floor Session and House Floor Session online.

NewsClips:

DEP Secretary Hit On Marcellus, Smallmouth Bass

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Lawmaker: DEP Secretary Denies Climate Change

Bridge Rebuilding Seen As Private Sector Job

Pileggi: Some Transportation Funding Is Better Than None

Corbett Transportation Plan Draws Kudos, Complaints

Op-Ed: Gas Prices And Transportation Funding

Editorial: Hike Driver, Vehicle Fees to Offset Tax

2/25/2013