Shale Daily / NGI All News Access

Congressmen: Leave Shale Regulation to States

The federal government should leave shale regulation to the states, but companies should be ready for changes to the tax code that will likely impact their industry, a bipartisan panel of lawmakers told a Philadelphia audience last Wednesday.

"We don't need a top-down regulatory approach...We can regulate ourselves at the state level, thank you very much," Rep. Jason Altmire (D-PA) said at the Shale Gas Insight 2011 conference hosted by the Marcellus Shale Coalition.

Altmire and the others on the panel are members of the Marcellus Shale Caucus, a bipartisan group of lawmakers from Pennsylvania, New York, West Virginia and Ohio aiming to guide national policy discussion on the play.

The goal of the caucus is to promote responsible exploration, safe transportation and expanded use of Marcellus gas, according to Rep. Tim Murphy, R-PA. That could happen through pipeline safety legislation working through the committee process, or through proposed incentives to increase demand by expanding the use of natural gas vehicles.

"I want to make sure we're not shortsighted. Obviously, we can't have peaks and valleys in natural gas pricing," Murphy said. "That doesn't benefit anybody...Congress doesn't need to control those prices, but I also think that as we're looking forward in the long run, there are some other incentives that could help us with this transition."

With the current make up of the Republican-led House of Representatives, harsher measures are unlikely this year, according to Rep. Tom Reed (R-NY). "Not to say that's not going to change down the road," Reed warned.

But that doesn't mean Congress won't take actions this year that impact the industry. In particular, as Congress is considering tax reform as part of deficit reduction measures. "Just be aware; everything is on the table," said Rep. Joe Pitts, R-PA.

But efforts to close loopholes shouldn't impact the energy industry alone, Reed said.

"It's not a one industry political battle that we're going to undertake," he said. That said, the industry might be able to ease its suffering by being innovative and proactive, Murphy said.

He suggested that the industry form a 501(c)3 nonprofit to collect revenues that might instead go to a future tax in Pennsylvania and use it to fund projects. "You don't have to be passive in this whole path," he said. On the flip side, Murphy said the federal government should freeze any energy regulations not "directly" tied to health and safety.

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