Shale Daily / NGI All News Access

Policymakers Weigh Marcellus Commission Recommendations

The Marcellus Shale Advisory Commission (MSAC) released its final report on Friday and now Pennsylvania policymakers in the executive and legislative branches must decide which recommendations to keep, which to change and which to toss.

The 137-page report makes 96 recommendations: 43 for health and safety, 26 for economic development, 18 for infrastructure and nine for local impacts.

Those recommendations tiptoe into controversial waters -- particularly by supporting an impact fee and forced pooling -- but as Baird Equity Research predicted, the report generally sticks to broad policy recommendations, not detailed proposals. "It will be up to state legislators to draft provisions," the analysis firm wrote in a policy brief Thursday.

The recommendations can become actual standards by two mechanisms: regulation or legislation. While the executive branch could begin drafting new regulations this summer, signs suggest lawmakers aren't rushing to end their break early.

"It's nice now; we have a report. We still need to have legislative interaction. What it's done is it's delayed that," state Senate President Pro Tempore Joe Scarnati, a Republican who sponsored a previous impact fee proposal, said Thursday.

The MSAC report recommended an impact fee to offset "the uncompensated portion of demonstrated impacts" to local communities, but Scarnati, speaking before the release of the final report, said any impact fee that doesn't also direct some revenue to statewide environmental programs is unlikely to get enough votes to pass the General Assembly.

While the report doesn't recommend forced pooling, it does suggest that Pennsylvania "modernize" its conservation statutes.

Forced pooling creates a compensation system for operators to extract natural gas from beneath a property without a lease in order to reduce the amount of drilling and limit waste, but critics, including Corbett, believe it amounts to private eminent domain.

Scarnati said forced pooling is highly unpopular among property owners and would be a "fatal flaw" for any legislation.

The report was delivered to Pennsylvania Gov. Tom Corbett who convened the 30-member panel in March, giving it 120 days to figure out how the state could maximize the benefits of shale while minimizing any negative side effects (see Shale Daily, March 9).

The report includes recommendations to toughen state oversight and to aide industry growth. The tougher standards include:

The economic development proposals include:

Scarnati said he doesn't expect all shale development issues to be handled in a single "omnibus" bill this fall.

From the regulatory standpoint, the report now awaits action from Corbett. "No work begins until he says 'go,'" Commission Chair Lt. Gov. Jim Cawley, said after the final MSAC meeting (see Shale Daily, July 19).

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