In One of America's Biggest Gas Fields, Law Rollback Could Deter Industry

Published May 01, 2012

| AOL Energy

Rollback Plans to roll back parts of Pennsylvania's controversial new law on natural gas development would make the state less attractive to energy companies seeking to develop the Marcellus Shale, one of America's biggest gas fields, critics say.

Democratic lawmakers in the state House want to remove a measure in Act 13 that restricts the control of municipalities over gas development, and to cancel a section that requires doctors to sign a confidentiality agreement if gas companies disclose the identities of fracking chemicals to them.

The two proposals are part of a six-bill "Marcellus Compact" package, published Monday, that would also raise the impact fees charged to drillers, increase bonding requirements and distances that wells can be built from streams and private water wells, and ban drilling in flood plains.

Too Much or Too Little?

Act 13, signed by Republican Governor Tom Corbett in February, prompted howls of protest from Democrats when it was presented by the Republican majority. Democrats said the bill imposed the lowest drilling fee of any gas-producing state, set weak environmental safeguards, and was forced through the legislature by Republicans at the behest of the industry with little time for debate.

Bill Patton, a spokesman for House Democratic leader Frank Dermody, conceded some of the new package, notably the proposal to raise the impact fee, didn't stand much of a chance of passing the Republican-controlled legislature, but argued that there are better prospects for winning the fights on local control and medical disclosure because some Republicans are also unhappy with those parts of the law, he said.

Patton acknowledged it was unusual for lawmakers to seek changes to major legislation soon after it becomes law, but that the proposals represent strong opposition to the law, and a belief that at least some of it can be changed.

"The Corbett Marcellus Shale law falls woefully short of providing adequate protections of our public water supply and critical environmental resources," said state Rep. Phyllis Mundy, who sponsored one of the bills. "The Marcellus Compact aims to fix those glaring failures in this new law."

Drew Crompton, chief of staff to Republican Senator Joe Scarnati, and one of the authors of the original legislation, said Democrats are simply reacting to having lost the vote, and are now trying to justify their opposition to a law that he said is already working well.

"They need to do all they can to try to belittle it," Crompton told AOL Energy.

He predicted the new package won't get through either chamber of the state legislature but that if it did, some of its provisions - particularly the rollback to the zoning measure, and the increased setbacks for gas installations -- would act as a significant deterrent to the industry.

Multiply the Impact By...?

With natural gas prices at a record low, the industry would also take a hit from any increase in the impact fee to an initial $75,000 per well from $50,000, as proposed in the Democrats' plan, Crompton said.

He conceded the act "was not flawless," and said officials are trying to modify the zoning provision that turned out to be unsuited for geological conditions in one area of eastern Pennsylvania. But he argued that every county that has gas drilling has agreed to implement the impact fee, which will generate some $200 million in the first year for local projects and statewide environmental impacts.

He also argued that the law's provisions on chemical disclosure to physicians were modeled on a measure in Colorado whose law he said is the "gold standard" for disclosure of fracking chemicals.

URL

http://www.foxbusiness.com/news/2012/05/01/in-one-america-biggest-gas-fields-law-rollback-could-deter-industry/