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Pennsylvania Bill Calls for Well Pad Standards

A bill recently introduced in the Pennsylvania General Assembly would require the state's Environmental Quality Board (EQB) to develop standards for the construction of oil and gas well pads in the Marcellus and Utica shales, according to Rep. Fred Keller, a Republican from central Pennsylvania.

The Oil and Gas Well Pad Construction Standards Act (HB 29) would have EQB establish uniform standards governing land clearing, excavation, grading, road construction or well pad construction and stabilization activities for unconventional wells in the state.

"Recognizing that economic growth, environmental protection and better protecting the health and safety of Pennsylvania residents are not mutually exclusive, these standards must also include provisions that enhance spill response and containment of any harmful chemicals or pollutants used at the well site during drilling operations," Keller said.

The EQB would be tasked with annually reviewing and updating the standards "to reflect changes in technology or recognized best management practices," according to the bill.

The EQB is a 20-member independent board, chaired by the secretary of the Department of Environmental Protection (DEP), which adopts all DEP regulations. EQB members include representatives of 11 state agencies, five members of the Citizens Advisory Council and four members of the Pennsylvania General Assembly.

In neighboring New York, a final draft report on the environmental impacts of hydraulic fracturing released last month included a proposal to limit simultaneous development of well pads and wells that are near each other (see Shale Daily, Sept. 9).

Keller is an opponent of taxing oil and natural gas extraction in Pennsylvania. The state's existing tax structure already includes "an exceptionally high corporate net income tax and limited net operating loss carryover, [which] creates a disincentive for businesses to come into the state," he said.

State lawmakers have introduced more than a dozen tax or fee proposals, including one that would impose a $40,000 fee per well during the first year of production (see Shale Daily, June 13; April 29). Pennsylvania Gov. Tom Corbett recently proposed a similar size impact fee to be implemented at the county level, along with other recommendations of his Marcellus Shale Advisory Commission (see Shale Daily, Oct. 4). Corbett's proposals have received a lukewarm reception from Pennsylvania Senate President Pro Tempore Joe Scarnati and others in the General Assembly (see Shale Daily, Oct. 5).

"Most people don't realize that the Marcellus Shale natural gas industry pays taxes each year just like every other business in Pennsylvania," Keller said. "In reality, Marcellus drillers throughout Pennsylvania have already contributed more than $15 billion in capital investment and have paid in excess of $5 billion in royalties to landowners, not including the more than $1 billion in state and local revenues. Any additional industry-specific taxes placed on Marcellus Shale drilling operations amounts to double taxation, economic stagnation and lost jobs, plain and simple."

HB 29 has been referred to the House Environmental Resources and Energy Committee for consideration.

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