Shale Daily / NGI All News Access

Pennsylvania Moves Fee Bill Without Fee

Pennsylvania lawmakers have restarted discussions about imposing an impact fee on natural gas operators by removing the fee from legislation introduced earlier this year.

The amended Senate Bill 1100 introduced Wednesday removed the fee to focus on less controversial aspects of the bill, according to Sen­ate Pres­i­dent Pro Tem Joe Scarnati, the Republican who introduced the bill in May (see Shale Daily, Oct. 26, June 15; April 29).

The version passed unanimously by the Senate Appropriations Committee includes changes endorsed by Gov. Tom Corbett, such as increased setbacks from water supplies, bonding requirements and presumed liability for industry, as well as stricter construction guidelines and enforcement measures for unconventional well operations (see Shale Daily, Oct. 4).

While most Pennsylvania policymakers said they support an impact fee, details such as how to structure the fee continue to hold up passage of the long awaited measure. Both the Corbett proposal and SB 1100 would impose a $40,000 annual fee per well that decreases to $10,000 by the fourth year and disappears after 10 years. SB 1100 would have the state administer the fee, but Corbett wants to give the responsibility to the counties.

Lawmakers said they expect to have new language next week, but meanwhile the temporary removal of the impact fee language threatens to overshadow significant changes in the bill.

The bill now increases the 200-foot setback between unconventional wells and drinking water sources to 500 feet from occupied buildings and water wells and 1,000 feet from public drinking water supplies, and triples the current 100-foot setback from waterways.

It requires operators to notify property owners within 3,000 feet of a proposed activity of permit applications, rather than the current 1,000-foot notification area. It also increases the presumption of operator liability in contamination cases to 3,000 feet from a well and 12 months since drilling operations from the current standards of 1,000 feet and six months.

The bill also makes it easier for the Pennsylvania Department of Environmental Protection to revoke or deny the permits of "bad actors" in the industry, and increases the maximum civil fine for unconventional wells to $75,000 plus $5,000 for each day the violation continues, from the current base rate of $25,000 and daily addition of $1,000.

The amended bill also includes transparency measures. It requires operators to disclose the components of hydraulic fracturing fluids, track wastewater and publish well completion data, inspection report and clean-up activity.

While those are mostly uncontroversial, the amended bill retains a model zoning ordinance to guide local regulation of natural gas operations, a topic disliked by many municipalities.

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