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Marcellus Commission Report Gets Mixed Reviews

Early reaction to the Marcellus Shale Advisory Commission's (MSAC) final report is mixed, with environmental groups praising some recommendations while criticizing omissions, industry promising cooperation and lawmakers offering a skeptical shrug.

The Pennsylvania Environmental Council (PEC) applauded the 30-member MSAC for finding consensus on numerous issues, but now wants Pennsylvania Gov. Tom Corbett to hold a special session to consider environmental protection and impact fee legislation.

"While PEC does not support every recommendation in the commission report, there are a significant number of recommendations that did achieve consensus and which deserve immediate attention," PEC President Paul King said.

PEC Chairman Tony Bartolomeo sat on the MSAC.

Corbett convened the commission in March to craft a strategic plan for shale policies. The final report included 96 recommendations covering health and safety, economic development, infrastructure and local impacts (see Shale Daily, July 25; July 19).

The PEC wants lawmakers to adopt all the environment provisions in the 137-page report, expand the permitting process to include regional planning in addition to site-specific approvals, give the state Department of Environmental Protection (DEP) the ability to deny permits based on impacts to public resources and give the DEP authority to change its policies at the pace of technological changes in the industry.

Those changes resemble those proposed by the PEC and the Chesapeake Bay Foundation (CBF) in May (see Shale Daily, May 13).

While crediting the MSAC for backing erosion controls, county conservation districts in the permitting process and wider setbacks from homes and waterways, the CBF said the report didn't go far enough. "Despite these, and many other significant environmental recommendations being included in the report, there are still significant environmental issues that remain to be addressed to our satisfaction, and CBF will continue to focus on those issues and publicly call for a cumulative impact study to better understand the long-term impacts drilling has on our natural resources," Pennsylvania Executive Director and MSAC member Matthew J. Ehrhart said.

Although shying away from specifics, the report recommended an impact fee to help local governments offset development costs.

That brought praise from Pennsylvania State Association of Township Supervisors President and MSAC member David Sanko.

"By embracing a local impact fee, the commission is helping to avoid potential property tax increases. At the same time, the commission endorsed the preservation of local common sense zoning over a state-mandated, 'one-size-fits-all' solution. This ensures that our local leaders and citizens maximize the benefits of natural gas exploration and minimize the negative impacts," Sanko said.

The Marcellus Shale Coalition (MSC) said it is ready to work with Pennsylvania regulators and lawmakers.

"As an industry of engineers and scientists, who solve complex challenges and seek to innovate by the day, we continue to demonstrate our ability to rapidly develop new solutions, technologies and best practices to enhance Marcellus production. From water reuse and recycling practices to meeting DEP's guidance on surface disposal, our track record is proven," MSC President Kathryn Klaber said.

MSC Chairman and Range Resources Corp. Senior Vice President Ray Walker also sat on the MSAC.

The Associated Petroleum Industries (API) of Pennsylvania said the report aligned with its ongoing efforts to improve standards. "We agree with the Commission that well construction materials, like casing and cement, have to meet high standards, and API's own standards set the bar high for the design and construction of shale gas wells and facilities. Natural gas can be developed safely, and not only does it provide clean energy, it is already having a big impact on local economies, jobs and energy security," Executive Director Rolf Hanson said.

But the Pennsylvania Budget and Policy Center (PBPC) said the recommendations "read like an industry wish list."

PBPC Executive Director Sharon Ward criticized the MSAC for recommending an impact fee that did not address statewide impacts, a natural gas vehicles incentive program based on tax credits instead of industry funding and for not addressing broad environmental issues.

"Without this discussion, the report is incomplete," Ward said.

State lawmakers of both parties -- neither represented on the commission -- have been even less kind to the report.

State Rep. Camille "Bud" George, a central Pennsylvania Democrat, said the report offered "few meaningful remedies for a process that has already polluted people's water" and said he plans to introduce environmental regulations that go beyond the recommendations.

State Sen. John Yudichak, a northeastern Pennsylvania Democrat, said the report didn't add any "new information" to the legislation that lawmakers proposed in the past year and said the lack of a severance tax or detailed impact fee made the report "invalid at this juncture."

"One positive out of the report was the endorsement of a lot of the regulatory changes Senate Democrats have been supportive of and introduced as legislation and passed in the House last year -- setbacks, bonding, protecting our streams, rivers and our water, so that was a positive of the report. There really wasn't any new information there. We'll address those very quickly," Yudichak said.

State Senate President Pro Tempore Joe Scarnati, a Republican from central Pennsylvania, said the report delayed progress on the issues.

"We still need to have legislative interaction," Scarnati said.

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