Pennsylvania lawmakers have restarted discussions about imposing an impact fee on natural gas operators by removing the fee from legislation introduced earlier this year.
The amended Senate Bill 1100 introduced last Wednesday removed the fee to focus on less controversial aspects of the bill, according to Senate President Pro Tem Joe Scarnati, the Republican who introduced the bill in May (see NGI, April 25).
The version passed unanimously by the Senate Appropriations Committee includes changes endorsed by Gov. Tom Corbett, such as increased setbacks from water supplies, bonding requirements and presumed liability for industry, as well as stricter construction guidelines and enforcement measures for unconventional well operations (see NGI, Oct. 10).
While most Pennsylvania policymakers said they support some tax or fee on shale drillers, details about the structure of it continue to hold up passage of the long awaited measure.
Both the Corbett proposal and SB 1100 would impose a $40,000 annual fee per well that decreases to $10,000 by the fourth year and disappears after 10 years. SB 1100 would have the state administer the fee, but Corbett wants to give the responsibility to the counties.
Although withholding full support until it sees actual legislation, ExxonMobil Corp. recently said it can support the fee proposal. “The impact fee discussion is important,” Kenneth Cohen, vice president of public and government affairs for ExxonMobil, said at the Marcellus Shale Gas Environmental Summit in Pittsburgh last Tuesday. “We think that, if properly structured, it would be beneficial both to property owners and to the industry.”
Cohen said that support shouldn’t be surprising because the Corbett fee idea grew from the recommendations of the Marcellus Shale Advisory Commission, which included industry representation. “Most of what’s in the governor’s proposal we could support with the caveat that we’d like to have one last look at what is actually written,” Cohen said.
Lawmakers said they expect to have new language this week, but meanwhile the temporary removal of the impact fee language threatens to overshadow significant changes in the bill:
While those are mostly uncontroversial, the amended bill retains a model zoning ordinance to guide local regulation of natural gas operations, a topic disliked by many municipalities.
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