Gov. Tom Corbett on Monday announced his plans to implement numerous recommendations of a transportation advisory panel, which include allowing counties to impose an impact fee to help pay for regulating gas drilling and fix environmental damages in Pennsylvania.
While citing the growth of drilling in the Marcellus Shale region as an economic driver, Corbett, speaking in Pittsburgh, said: “We are going to do this safely and we’re going to do it right.”
Under the governor’s proposal, which he will present to the General Assembly when it reconvenes in two weeks, a county may provide for a fee credit of up to 30% if the driller makes approved investments in natural gas infrastructure, which include establishing natural gas fueling stations or transit vehicles.
Impact fee revenues would be split with 75% retained at the local level and the county to retain 36% of that, municipalities that host drilling pads to receive 37%, and all municipalitis within a Marcellus-affected county to receive the remaining 27%.
The remaining 25% would be divided, with 70% of that total going to the state Department of Transportation for road, bridge, rail, and other repair within affected counties and the rest among various state agencies.
Two-thirds of Pennsylvania covers the Marcellus Shale, an ancient geological formation that has attracted gas drilling companies taking advantage of a new technology called hydraulic fracturing, or “fracking.”
Pennsylvania is the only major drilling state with no such tax. Its general obligation bonds are rated AA-plus from Fitch Ratings, Aa1 from Moody’s Investors Service, and AA from Standard & Poor’s.
The shale lies underground, from 300 to 6,000 feet below the surface, covering 95,000 square miles from the Southern Tier of New York, across Pennsylvania, and into parts of West Virginia and Ohio. It derives its name from a visible exposure of the shale near Marcellus, N.Y., in the central part of that state.
The need for either a severance tax or drilling fee surfaced during the Pennsylvania General Assembly’s budget debate last June. Some political leaders and municipal banking analysts have said that growth in Marcellus Shale regions, particularly in western Pennsylvania, could strain infrastructure needs and eventually, bond ratings.
“We now have a sensible and fair plan to put before the General Assembly,” Corbett said.
He also announced drilling standards on Monday that included well setback standards, increases in well bonding and blanket well bonds, and tougher penalties for repeat violators.
Senate President Pro Tem Joseph Scarnati, like Corbett a Republican, may introduce separate legislation.
