Marcellus / Regulatory / Shale Daily / Utica / Northeast / NGI All News Access

Pennsylvania Bill to Roll Back Some of DEP's New Oil/Gas Regs Fails

A Pennsylvania Senate bill that would have rolled back certain provisions of a wide-ranging regulatory package for shale drillers that’s set to take effect soon lost steam last week and failed before the legislature recessed for the summer.

SB 1229, which passed by a vote of 41-7 in the chamber, would have allowed shale producers 24 months -- instead of nine as the new regulations call for -- to restore a well site (see Shale DailyJuly 12). It also would have prevented producers from filing waste disposal reports monthly under the new package and would have stopped the state Department of Environmental Protection from establishing new standards for freshwater storage used for oil and gas production.

While the measure enjoyed support in the Republican-controlled Senate, Democratic Gov. Tom Wolf threatened to veto it, and the House of Representatives didn't vote on it. The bill was one of many energy-related items that failed before the summer recess or that were not included in the state's $31.5 billion budget, which was signed by the governor last week.

Wolf signed the 2016-2017 budget after letting part of the 2015-2016 budget pass without his signature at the end of a nine-month impasse that ended in March (see Shale DailyMarch 23). Noticeably absent from the state's latest spending bill and the revenue package to pay for it was Wolf's 6.5% natural gas severance tax proposal, which faded from negotiations early in the process (see Shale DailyJuly 5;Feb. 9). Wolf was also unsuccessful in getting a 3.5% severance tax and a volumetric fee passed along with the $30.5 billion 2015-2016 budget (see Shale DailyOct. 7, 2015).

Lawmakers also went back and forth on a gross receipts tax on natural gas customers, but that proposal ultimately failed. Instead, Wolf signed a $1.3 billion revenue package that relies heavily on a $1-per-pack hike on cigarettes -- in addition to other measures such as changes to gambling and wine sales -- to help plug the state's deficit.

The new regulations for unconventional oil and gas drilling -- designed to reduce impacts on public resources, such as schools and parks, help prevent spills, strengthen waste management and require stronger well site restoration standards -- finally passed the General Assembly last month after a lengthy bureaucratic and legislative process that ended with a compromise to scrap similar rules for legacy producers (see Shale DailyJune 15).

The fiscal code bill that serves as a spending blueprint for the state budget also took $12 million from a program to help fund the construction of energy efficient buildings for grants to businesses, municipalities and hospitals, among others, that switch to natural gas.

The fiscal code also amended a 1961 law to eradicate a provision that required shale drillers to adhere to additional permitting requirements and pay a $5,000 fee for conservation wells below the Marcellus Shale. Some producers had been forced to meet those requirements for skimming the Onondaga formation below the Marcellus during development of the shale. While it hasn't been common, the amendment had been introduced as its own bill before it was included in the fiscal code.

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