Bills that would place a severance tax on natural gas drilling in the Marcellus Shale, raise minimum royalty payments, require full disclosure of the chemicals used in hydraulic fracturing and more could all soon be taken up for consideration by Pennsylvania lawmakers — but the General Assembly’s efforts to close a $1 billion budget gap might push at least some of those bills to a back burner.

On Tuesday the House Environmental Resources and Energy Committee approved a pair of bills designed to “mitigate threats from Marcellus Shale gas drilling,” according committee chairman Camille “Bud” George (D-74) of Clearfield County.

HB 2213 would bolster the Pennsylvania Department of Environmental Protection’s authority to deny well permits and to suspend drilling, increase potential civil penalties to $100,000 and potential fines for continuous violations to $10,500 per day, extend to 2,500 feet the presumed liability of a well-polluting water supply and require full disclosure of chemicals used in the fracing process. Also approved by the committee was HB 2214, which would raise the minimum royalty payment to 15% of gross proceeds and prohibit royalty deductions for severance taxes, applicable state fees or post-production costs.

“The committee recognized that Pennsylvania must keep pace with the challenges and costs already being encountered throughout much of Pennsylvania,” George said.

But those bills may get “tangled up behind budget considerations,” according to a spokesman from George’s office. The House recessed Wednesday and is not scheduled to return to Harrisburg until June 7.

Last year George introduced Pennsylvania’s HB 1489, which would have imposed a “privilege tax” on all of the state’s natural gas producers at a rate of 5% of the gross value at the wellhead, plus 4.7 cents/Mcf (see Daily GPI, June 24). Last year’s budget did not include the tax (see Daily GPI, Oct. 12, 2009), but now there are “rumblings out of the senate that they’re going to accept the severance tax,” the spokesman said. “Now it’s where the proceeds will be divided up and how big and how much, but it remains very much under consideration.”

Awaiting approval by the Environmental Resources and Energy committees in both the state House and Senate — as well as reviews by the Independent Regulatory Review Commission and the Pennsylvania Attorney General’s office — are proposed regulations that would significantly lower the amount of total dissolved solids permitted in wastewater discharges from Marcellus drilling operations (see related story).

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