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Sen. Bartolotta, Sen. Yaw Announce Bill To Withhold Gas Drilling Impact Fees To Municipalities That Set More Protective Standards On Natural Gas Development Than State Law, And While There Is a Legal Challenge To Local Restrictions

On October 9, Sen. Camera Bartolotta (R-Washington) and Sen. Gene Yaw (R-Lycoming) announced plans to introduce legislation to prohibit municipalities from receiving Act 13 drilling impact fees if they set more protective standards on the development of natural gas than required in state or federal law and while a challenge to local restrictions is being litigated.

“The Impact Fee was carefully constructed to compensate municipalities that hosted or were in proximity to natural gas development for any impacts that may be experienced.

“Impact Fee dollars were never intended to go to municipalities that took unreasonable actions to prevent ongoing natural gas development within the municipality.

“While municipalities may have some flexibility in how they zone or regulate oil and gas operations – provided they do not exceed limitations in state or federal law – doing so in an unreasonable manner which prevents future natural gas development should render the municipality ineligible for state collected and distributed impact fees.

“This legislation prohibits such disbursement of Impact Fee funds by the PA PUC [Public Utility Commission] and further requires the PA PUC to hold any funds during the pendency of any litigation challenging the validity of a local zoning ordinance.”

Click Here for the complete announcement.

History Of Preventing Local Regulation Of Oil/Gas

The Bartolotta/Yaw announcement forgets to mention Act 13 of 2012 setting up the impact fee also originally included a provision preempting any local regulation of drilling operations.

That provision was declared unconstitutional by the PA Supreme Court in a landmark ruling in December 2013 based on the Environmental Rights Amendment in Pennsylvania’s Constitution. Read more here.

The original intent of Act 13 to preempt any local regulation was not related to the impact fee, but a simple denial of the rights of municipalities as trustees of Pennsylvania’s environment to protect their citizens from the negative impacts of oil and gas drilling which was knocked down by the Court.

In October 2022, Sen. Yaw introduced legislation-- Senate Bill 1331-- denying counties Act 13 drilling impact fees if they restrict the leasing of land for drilling that was reported out of his Committee, but saw no further action.

Allegheny County adopted an ordinance restricting drilling for gas on county-owned lands which represented less than 1% of the land area of the county leaving 99%+ available for leasing. Read more here.

In October 2023, Sen. Yaw said in a written press statement House legislation which increased safety zone setbacks around natural gas infrastructure was “stupid” after a House Committee hearing on House Bill 170 (Otten-D-Chester). Read more here.

In May 2024, Sen. Yaw announced the introduction of legislation prohibiting the distribution of Act 13 impact fees to any county “that is actively suing over fossil fuel use.” Read more here.

Although not yet introduced, Sen. Yaw was attempting to prevent actions like Bucks County took to join a lawsuit charging oil companies intentionally deceived the public about the role fossil fuels play in worsening climate change. Read more here.

Punishing Municipalities That Protect Their Residents

The goal of the Bartolotta/Yaw legislation is to punish municipalities-- like Cecil Township, Washington County [in Sen. Bartolotta’s district]-- that are considering adopting restrictions like setbacks from shale gas drilling pads that go beyond the minimum 500 feet setback in state requirements.

Cecil Township is considering an ordinance with a 2,500 foot setback from homes and a 5,000 foot setback from schools and hospitals as recommended in a 2020 Office of Attorney General Grand Jury Report. Read more here.

The Township held four hearings on the issue of regulating shale gas development to better protect public health and the environment [Read more here] will consider the ordinance at a meeting on November 4.

Range Resources Appalachia, the primary shale gas drilling company in the Township, was a no show at the hearings.

The fact that the Bartolotta/Yaw legislation specifically directs the PUC to withhold Act 13 drilling impact fees during any legal challenge to local ordinances-- which routinely come from gas drilling companies-- is meant to be a specific deterrent to the adoption of more protective ordinances.

In 2023, Cecil Township received $317,453.25 in drilling impact fees, according to the PUC.

Lower Expectations Of Gas Industry Support

In June, the Independent Fiscal Office issued a report on the latest projections of revenue from the Act 13 Shale Gas Drilling Impact Fee showing another drop in calendar 2024 revenue to from $165 million to $170 million-- a nearly $114 million decrease from 2022. Read more here.

The least revenue collected from this fee was $146.3 million for calendar 2020.

The IFO reported calendar 2023 revenue was $179.1 million, down over $100 million from the record revenue in 2022 of $278.9 million.

This $200 million+ drop in revenues is the result of lower natural gas prices set by international markets and the fact the gas industry is drilling fewer new wells in an attempt to get the price of natural gas to increase.

The drilling impact fee is a per well fee and not a fee on production like all other oil and gas states have.

On September 19, the Pittsburgh-based Allegheny Institute for Public Policy published a policy brief on the steep decline in revenues from the drilling impact fees saying counties and municipalities need to “begin lowering their expectations” on the support from the shale gas industry drilling impact fee. Read more here.

(Photos: top- Range Resources Augustine Drill Pad in Cecil Township; Augustine Drill Pad showing scale of operation; bottom- Map of Shale gas wells (red dots), conventional oil and gas wells (blue/green dots) in Cecil Township (DEP Oil & Gas Program); 523 feet from nearest house; Well pad gas flare from bedroom window near Augustine well pad (WTAE). Other photos Courtesy of The Energy Age Blog.)

PA Oil & Gas Industry Public Notice Dashboards:

-- PA Oil & Gas Weekly Compliance Dashboard - October 5 to 18 - Conventional Well Owners Issued 767 Violations For Abandoning Their Wells - So Far, More Than Double Number In 2019; Leaking Gas Storage Area Wells [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices, Opportunities To Comment - October 12 [PaEN]

-- PA Oil & Gas Industrial Facilities: Permit Notices, Opportunities To Comment - October 19 [PaEN]

-- DEP Posted 87 Pages Of Permit-Related Notices In October 12 PA Bulletin [PaEN]

-- DEP Posted 57 Pages Of Permit-Related Notices In October 19 PA Bulletin [PaEN]

Related Articles This Week:

-- Pennsylvania Voters Overwhelmingly Support Stricter Regulations On Fracking, New Poll Finds [PaEN]

-- Saint Vincent College Study Finds Counties With Shale Gas Fracking Wells Using Chemicals That Target Certain Hormones Have Greater Incidence Of Pre-Term Births, Low Birth Weights [PaEN]

-- Beaver County Residents Invited To Join An Oct. 23 In-Person Tour Of Shale Gas Fracking Sites & Infrastructure In Washington County And Discover Its Costs [PaEN]

-- Observer-Reporter Letter: There’s Another Side To The 'Shale Gas Revolution' [PaEN]

-- Sen. Bartolotta, Sen. Yaw Announce Bill To Withhold Gas Drilling Impact Fees To Municipalities That Set More Protective Standards On Natural Gas Development Than State Law, And While There Is a Legal Challenge To Local Restrictions [PaEN]

-- Observer-Reporter Guest Essay: Why Politicians Want You To Pay More For Natural Gas - By Patrick McDonnell, CEO of PennFuture, Former Secretary of DEP [PaEN]

-- PJM Interconnection Winter Outlook: Adequate Power Supplies Available Under Normal Conditions; PJM Delays Next Power Auction After Prices Spike [PaEN]

-- The Derrick: PUC Judge Issues Emergency Order Appointing Aqua Pennsylvania As Temporary Operator For 6 Rhodes Estate Water Companies [Serious Community Impacts Continue From Conventional Oil Well Spill In Venango County] [PaEN]

-- DEP Begins Accepting Applications For New Methane Reduction Grants To Plug Conventional Oil, Gas Wells Oct. 16 [PaEN]

-- Evangelical Environmental Network Delivers Over 36,000 Comments From Pro-Life Christians To Gov. Shapiro, DEP In Support Of Strong Oil & Gas Industry Methane Emission Controls [PaEN]

-- Beaver County Marcellus Awareness Community Receives Grant To Strengthen Communications and Community Engagement Initiatives [PaEN]

-- Susquehanna River Basin Conditions Trigger Low-Flow Water Use Restrictions At 9 Shale Gas Water Withdrawals In Bradford, Susquehanna, Tioga Counties [PaEN]

-- DEP Invites Comments On Proposed Air Quality General Permit (GP-16) Covering Gaseous Fuel-Fired Spark Ignition Internal Combustion Engines [Copy Of Documents ]

-- Team PA & Clean Air Task Force Convene Leaders To Discuss Challenges, Opportunities Of Industrial Decarbonization; DOE Provides Update On Decarbonization Investments In PA [PaEN]

-- Beaver County Marcellus Awareness Community Urges EPA To Move Forward With Strong Regulation Of Vinyl Chloride Under Federal Toxic Substances Control Act, While Calling For A Ban [PaEN]

-- EPA Files $4.2 Million Settlement Of Air Pollution Violations For 2019 Philadelphia Refinery Explosion, Fire; Public Comments Invited [PaEN]

NewsClips:

-- The Energy Age Blog: ‘Amity & Prosperity’ By Eliza Griswold Thrust Fracking In Washington County, PA Into The National Spotlight