Department of Conservation and Natural Resources Secretary Richard Allan told the House Appropriations Committee Tuesday federal budget sequestration will cost the agency about $1 million in federal grants it normally passes through to local governments and other applicants in the state.

Secretary Allan answered questions before the Committee for about an hour.

Click Here to watch a video of the hearing

Rep. Bill Adolph (R-Delaware), Majority Chair of the House Appropriations Committee, started the hearing by thanking Secretary Allan for working with the Committee last year to restore funding for the Keystone Recreation, Parks and Conservation Fund.

Rep. Adolph also expressed concern generally for county conservation district funding.

$1 Billion Infrastructure Needs: Rep. Adolph asked Secretary Allan’s about the estimated $1 billion backlog in maintenance projects in State Park and State Forests. Secretary Allan said the priority would be for health and safety improvements first and with additional monies coming from the Oil and Gas Fund helping to finance some of those improvements, along with Capital Budget authorizations.

            Secretary Allan said the six years prior to the Corbett Administration few if any monies were devoted to maintenance so DCNR is starting from a deep hole 

Drilling Impacts: Rep. Joe Markosek (D-Allegheny), Minority Chair of the Appropriations Committee, asked about the status of impacts Marcellus Shale development has had on DCNR roads and bridges.  Secretary Allan said the drilling companies are tasked with keeping the roads and bridges in good shape.

            In response to a question from Rep. Garth Everett (R-Lycoming), Secretary Allan said 902 wells have been approved by DCNR, 855 have been issued permits by DEP, 556 wells have been drilled and 301 wells are producing.  He said they are anticipating an increase in drilling on the leases already issued by the prior administration on DCNR State Forest land.

           Rep. Steven Santarsiero (D-Bucks) asked how many additional acres are subject drilling under existing leases.  Secretary Allan said 700,000 acres have been leased and about 25 percent has been developed so far, but would get back to the Committee with more specific information.

Increased Dependency On Drilling For Funding: Rep. Markosek said DCNR is becoming increasingly dependent on drilling for funding the agency and asked if that is in conflict with the agency’s mission.  Secretary Allan said drilling has increased costs in the agency, but the funding generated by drilling is helping all parts of the agency.

            Rep. Greg Vitali (D-Delaware), Minority Chair of the House Environmental Resources and Energy Committee, expressed concern about diverting Oil and Gas Fund monies to fund general agency operations instead of conservation or maintenance projects.   Secretary Allan said all parts of the agency are involved in the agency’s mission and they are prioritizing maintenance projects with available funding.

Problems With Drilling Operations: Rep. Markosek asked if there are any outstanding issues with drilling operations.  Secretary Allan said each drilling company is required to submit a plan for developing Marcellus Shale natural gas and issues are worked out with those operators with DCNR staff.  He said operators have been cooperative in this process.  (Click Here for more on drilling in State Forest land.)

            Rep. Vitali also expressed concern about the conflict between drilling and the drilling industry giving the agency the money to operate.

            In response to a question from Rep. Madeleine Dean (D-Montgomery), Secretary Allan said they have teams looking at the physical impact of drilling all the time.  He added, with respects to impacts, he noted State Forest lands were recently certified as sustainable.  He said he has toured drilling operations and DCNR staff are working well with operators.

Drilling Moratorium: Rep. Garth Everett (R-Lycoming) asked if the drilling moratorium is still in place for additional leasing of State Forest land.  Secretary Allan said it was.  Rep. Santarsiero asked if the moratorium will continue for the remainder of the Governor’s term.  Secretary Allan said he’s had no discussions on that issue and has no knowledge of it changing.

Regulating Drilling: Rep. Everett asked how DCNR regulates drilling on State Forest land and asked specifically about drilling in the Loyalsock State Forest.  Secretary Allan said each company with a lease is required to submit a development plan for their leases, based on the operating guidelines adopted by the department.   (Click Here for more on drilling in State Forest land.)

With respect to Loyalsock State Forest, Secretary Allan said there are legal issues involved and they are pursuing those issues.

            (Note: At last week’s Senate Appropriations Committee hearing, Secretary Allan said two private companies own the mineral rights in the area and not DCNR.  One of the companies asked DCNR some time ago about issues related to drilling in the area, but DCNR asked them to hold off on plans for drilling until issues could be examined in more detail.  In particular, one of those issues is access across DCNR-owned land in some areas since there is a patchwork of private and DCNR landownership in the area.)

Fragmentation Issues Resulting From Drilling: Rep. Everett asked about how DCNR is handling the issue of forest fragmentation related to drilling.  Secretary Allan said that issue is reviewed when a company submits its development plan for their leases and that DCNR staff emphasizes the use of existing roads and rights-of-ways for their production activities, such as pipelines, to reduce fragmentation.

Drilling Under State Parks: Rep. Santarsiero asked about potential for drilling under State Parks where about 80 percent of the mineral rights are privately owned.  Secretary Allan said DCNR has not received any proposals for drilling under State Park lands.

Newark Shale Study: Rep. Bernie O’Neill (R-Bucks) asked about the status of the Newark Shale natural gas study.  Secretary Allan said DCNR is developing a plan on how to do the study, particularly the Bureau of Topographic and Geologic Survey.  He said the agency is close to announcement on starting the study, but there are no timeframe yet on when the study is to be completed.  Secretary Allan said they will be reaching out to local governments and other stakeholders as they are required to do.

Natural Gas Vehicles: Rep. Michelle Brownlee (D-Philadelphia) asked if DCNR is looking into using natural gas-fueled vehicles.  Secretary Allan said the agency was looking into that issue for several types of fuels as well as looking at the potential of sharing fueling stations with other agencies.

Flood Control Issues: Rep. Markosek asked about potential cuts on funding dealing with flood control structures.  Secretary Allan said the among the top priorities for maintenance projects are  upgrades needed for the 126 dams maintained by DCNR. 

            Rep. Karen Boback (R-Columbia) asked specifically about high hazard dams under the agency’s jurisdiction.  Secretary Allan said three high hazard dams are now undergoing design for upgrading of the six high hazard dams maintained by DCNR.  He said the three now in design will cost about $20 million to upgrade.

State Park User Fees: Rep. Mauree Gingrich (R-Lebanon) asked what percentage of State Park user fees goes to maintenance and personnel costs, increasing privatization of park activities and increasing user fees.  Secretary Allan said the agency anticipates fees and consessionaire revenue will increase from $21 to $23 million in the coming year with about $2.5 million from contracts with consessionaires within the parks.  He noted DCNR is always looking for opportunities to privatize its operations.  He added DCNR looks at surrounding state and similar facilities to set the user fees at State Parks.

Park Improvements: Rep. Gingrich asked about future improvements to State Parks. Secretary Allan said DCNR is planning to upgrade its cabins and other facilities with electric and other improvements.  He also said, on the higher end, The Nature Inn at Bald Eagle is going well with about a 54 percent occupancy.

Federal Sequestration: Rep. Gingrich asked about the impact of federal Sequestration. Secretary Allan said the 7 percent reduction of $1 million in federal pass through grants.

Heritage Park Funding: Rep. Deberah Kula (D-Fayette) expressed concern about the Heritage Park Program funding being eliminated again in FY 2013-14.  Secretary Allan said the line item was proposed to be eliminated as it was in past budgets.  However, Heritage Areas are eligible to apply for grants under DCNR’s Community Conservation Partnership Grants Program.

            Rep. Kula asked if DCNR would object if the Heritage Park line item would be restored and Secretary Allan said no.

             Rep. Mike Carroll (D-Monroe) also expressed concern about Heritage Park funding.

ATV/Snowmobile Trails: Rep. Donna Oberlander (R-Armstrong) asked for information on expanding ATV and snowmobile trails.  Secretary Allan said DCNR is always looking for ways of connecting and expanding ATV and snowmobile trails.  The agency also provides small grants to groups to develop trails and is doing a special study in Armstrong County on expanding trails.

            Rep. Oberlander asked about ATV/snowmobile registration moving to PennDOT.  Secretary Allan said they are using PennDOT’s system for registration and collecting the money, but DCNR will still get the monies collected.

Forest Pest Management: Rep. Brownlee asked why some line items related to forest pest management seem to be zeroed out and how it will affect the 21 positions involved.   Secretary Allan said budget line items were consolidated so that about $12 million in funding is now in one place so it can be managed more efficiently.  He noted an office and laboratory dealing with forest pest management in Middletown was moved to the central office and laboratory space leased from the Department of Agriculture resulting in significant savings.

Wild Resource Conservation Fund: Rep. Matthew Bradford (D-Montgomery) asked about the status of the Wild Resource Conservation Fund program and about questions being raised about the kinds of research related to drilling and climate change being restricted by the agency.   Secretary Allan said the program was a good one when it started, but the income now coming from the special Wild Resource Conservation license plates was only enough to cover administrative expenses so the agency is contributing monies from the Environmental Stewardship Fund to provide grant funds. 

Secretary Allan said it was misinformation to say research was being restricted.  He said the agency did look at the priorities for funding, but there is a working group that reviews the grant applications.  He said the criticisms are not factual.  He said the agency’s priorities are those related to continuing DCNR’s mission.

PA Natural Diversity Inventory: Rep. Oberlander asked for an update on the PNDI program.  Secretary Allan said PNDI is the first stop for many types of development under DEP permit reviews.  He said DCNR works with contractors to manage the Program as well as the Fish and Boat and Game Commissions.  He said generally they turnaround requests for reviews within 30 days, depending on the complexity of the project.  He noted DCNR has recently updated access to the information in PNDI to make it more convenient for users.

A copy of Secretary Allan’s written testimony is available online.

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3/11/2013