Corbett offers fee proposal for gas drilling

Gov. Corbett on Monday announced his plan to respond to the effects of Marcellus Shale natural gas drilling, proposing that individual counties set a per-well fee on drilling companies, while the state provides tougher environmental standards and enforcement.

The much-anticipated proposal offers broad measures to recoup costs associated with drilling and to hold drilling companies accountable for environmental damage, while acknowledging the huge economic benefit of an industry tapping the nation's largest-known gas reserve.

"Affordable, reliable energy allows companies to grow, but how do we get there? We have to make sure that we do this right, from the very beginning," Corbett told a crowd at an event in Pittsburgh. "If we're looking at this industry, it's a little bit beyond a newborn, it's not even crawling yet though. . . . We have to get there by smart, sound, evenhanded, level-playing-field regulation and legislation."

But a top Senate Republican leader said the proposal too narrowly benefited the roughly 40 counties where drilling occurs and signaled that it was unlikely to be approved in its current form.

"There needs to be an impact fee that will not only assist local communities affected by drilling activities, but fund important related statewide environmental programs as well," said Senate President Pro Tempore Joe Scarnati (R., Jefferson), who has pushed his own legislative proposal generating $200 million a year starting as early as 2012.

Under the Corbett plan - which the governor rolled out at a unionized carpenters training center in Pittsburgh - affected counties could set a fee of no more than $40,000 per well. The fee on each well would be reduced over time until, after 10 years, it would be eliminated.

Corbett estimated total fees could generate $120 million in the first year. That figure could grow to $195 million within six years as more wells come online, he said.

Most of the money - 75 percent - would remain in the counties where the wells are drilled. It would go toward the costs of regulating the industry and to infrastructure improvements from wear and tear on bridges and roads. Some of the revenue would be directed toward addressing population-growth issues, such as affordable housing and social services.

"It places the fee where the actual impact is," Corbett said.