Scarnati reveals proposal for fee on Marcellus Shale

April 29, 2011|By Angela Couloumbis, Inquirer Harrisburg Bureau

HARRISBURG - It is a fee, not a tax.

It helps upstate Pennsylvania communities directly impacted by natural gas drilling rather than those that want to build parking garages or monuments to politicians.

And most important, Senate President Joe Scarnati (R., Jefferson) said Thursday, it is political realism.

With those arguments, Scarnati unveiled details of what will soon become the first black-and-white proposal in Harrisburg for a "local impact fee" on the extraction of natural gas from the Marcellus Shale.

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The plan, he acknowledged, doesn't have a green light from Gov. Corbett. But it doesn't have a red light either.

"At this point," said Scarnati, "I can say I have a caution light."

Corbett has steadfastly said he will not accept a proposal that calls for imposing a new tax on natural gas extraction. He has said, however, that he would consider a local impact fee, provided the money goes to communities where drilling is occurring.

Corbett spokesman Kevin Harley on Thursday was noncommittal about Scarnati's proposal for such a fee, saying the governor also wants to wait to hear what his Marcellus Shale Advisory Commission will recommend in its report, due in early July.

"The governor has said he would look at an impact fee. He never said he would endorse it," said Harley, adding that any decision on gas drilling "needs to be well-thought-out and well-designed."

Scarnati's plan, for the most part, seems to stick to the broad parameters laid out by the governor, a fellow Republican.

It calls for imposing a base fee of $10,000 for every drilling well, but that number would increase based on production and the price of natural gas.

In all, Scarnati projects that will translate into $45 million for 2010 (the fee would be retroactive), $76 million this year, and $103 million next year.

The lion's share of the money, which would be collected by the state Public Utility Commission, would go straight to drilling-heavy municipalities and counties.

A portion of the money - there are no exact breakdowns yet - would go to conservation districts across the state, as well as statewide environmental and infrastructure projects.

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