DN Editorial: Get moving on fracking fees

Opponents of natural-gas drilling in the Delaware River watershed march to the New Jersey Statehouse. Speakers at the rally included the actors Mark Ruffalo and Debra Winger, and the documentary filmmaker Josh Fox.
Opponents of natural-gas drilling in the Delaware River watershed march to the New Jersey Statehouse. Speakers at the rally included the actors Mark Ruffalo and Debra Winger, and the documentary filmmaker Josh Fox. (JULIO CORTEZ / Associated Press)
Posted: December 02, 2011

IN MANY PLACES, caution is the byword when it comes to gas drilling. Last week, the Delaware River Basin Commission, made up of the governors of four states, postponed a vote that would allow drilling in regions near the Delaware - a vote most likely derailed when Delaware Gov. Jack Markell announced he wouldn't be supporting it.

In New York, a moratorium on drilling expired in July, but no permits or licenses are being issued pending the release of an environmental report.

Here in Pennsylvania, lawmakers are also cautious . . . about taking any action which might upset the gas industry. That's why, under the Rendell administration, they resisted imposing a 5 percent extraction tax that the governor was pushing.

Finally, last month, both House and Senate passed bills that would impose an impact fee on companies drilling in the Marcellus Shale - a gas-rich vein that lies under Pennsylvania and nearby states that has provided a 21st-century eqivalent of a gold rush. But the fees proposed fall far short of comparable states' fees. Both bills are in committee, due to be reconciled - it could still take months before a fee structure gets resolved.

Since Gov. Corbett and many in the General Assembly have taken taken the absurd Norquist "no tax" pledge, there has been a refusal to tax and a reluctance to impose fees that would help defray the impacts of gas drilling.

Extracting gas involves fracturing the shale ("fracking") by shooting chemicals and water into the rock to release the gas; there are concerns about the environmental impact, especially on groundwater.

Fees would help offset costs to local communities, but are only fair for companies who are reaping rich rewards from their access. The House bill, favored by Corbett, would collect $160,000 over the 50-year life of an average gas well, which, according to the state Budget and Policy Center, is the equivalent of a 1% tax rate. The Senate bill, sponsored by Joseph Scarnati, would be closer to 2.2 percent, and raise $360,000 over the life of a well.

Consider the rates charged by other states: West Virigina imposes a 6.1% effective tax rate, which brings in over $900,000 per well; Texas charges 5.4 percent, which nets that state nearly $900,000 per well.

What's more disturbing is that the proposed fees here also fall short of an industry-supported plan from last year.

Both bills also prohibit local communities from imposing ordinances on companies drilling in their back yards. That means the attorney general can override local laws on noise, traffic or the location of wells and pipelines. Finally, only the House bill directs some of the impact fees to the state's Growing Greener environmental program.

While it's fair that many of the fees are destined for the communities in which drilling is occurring, the lack of vision for fees that might benefit the entire state shows a blindness to the fact that we all live downstream:

That what happens to the water and the environment in Bradford County ultimately impacts all of us.

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