County opts into Marcellus Shale Gas fee

Wednesday, February 15, 2012

By Randy Bartley
BROOKVILLE - Tuesday, the Jefferson County Commissioners gave unanimous, if lukewarm approval to an "unconventional gas well fee ordinance" for imposing a gas well fee on each unconventional gas well "spud" in Jefferson County.
"We had a conference call with the County Commissioners Association of Pennsylvania (CCAP) and came out of it with more questions than answers," said Jefferson County Commissioner Jeff Pisarcik.
The long-debated fee on Marcellus Shale gas wells included any well that is "fracked." Fracking is the fracturing of a rock layer to free the deep pockets of Marcellus Shale Gas. (A "spud" is the initiation of the drilling process).
"Our (CCAP) Executive Director explained that a non-conventional well is any well that is fracked but that would also include some vertical wells," said Jefferson County Commissioner Paul Corbin. "I still need to get some clarification on that."
"As commissioners, this was the right thing to do for Jefferson County," said Pisarcik. "This gives the townships the power to bring some money into the township if they chose to."
The "local impact fee," would fluctuate depending on the price of natural gas and, beginning in 2013, on the rate of inflation. The bill enables counties where drilling occurs to decide whether to impose a fee. If a county declines to impose a fee, half its municipalities would have the option to force it to do so.
Under the proposal, 60 percent of the revenue raised from the fee would go to local governments impacted by drilling. Of that share, 37 percent would go to host municipalities, 36 percent to host counties and 27 percent to other municipalities in host counties. The money would be used to pay for a number of local services, from emergency preparedness to road, bridge and infrastructure projects.
The remaining 40 percent of the revenue would be for statewide environmental projects, including acid mine drainage remediation, water projects, flood control, statewide highway and bridge improvements, projects for open space, recreational trails and "beautification" projects, and hazardous sites cleanup.
The legislation also provides for standardized but flexible zoning standards which would allow communities to retain reasonable control over zoning power and encourage consistency in regulating the gas industry.
"Local governments will retain their traditional powers to provide for local zoning and regulation, and we can, at the same time provide for the development of natural gas and the jobs and opportunities that this industry brings," Sen. Joe Scarnati said.
Environmental safeguards included in the measure would increase well-bonding amounts, boost penalties for violations, and require the disclosure of chemicals used in hydraulic fracturing as well as call for the posting of inspection reports. The bill increases setbacks - requiring shale gas wells to be 500 feet from occupied structures and water wells, and 1,000 feet from public drinking water sources. It also increases the setback distance from a shale gas well to a spring or body of water to 300 feet.
Rep. Sam Smith (R-Jefferson, Indiana, Armstrong) said "The bill is a comprehensive piece of legislation. It is the result of many months of hard work and compromise that were necessary to support the development of an industry that should be both environmentally safe and economically efficient," Smith said.
Smith stressed that one of the most significant changes to the legislation was that the local government's traditional role in zoning was preserved. "When originally introduced, this bill provided for a state pre-emption of local ordinances," he said. "The current provision creates a responsible balance of state and local control."
He noted, however, that since very few municipalities in the 66th Legislative District use zoning to manage development, the new setback and safeguards in this bill will provide balance between environmental concerns and the jobs being created.
"The bill also allows Jefferson, Indiana and Armstrong Counties the option of assessing an impact fee on gas drilling in our communities," he said. "Revenue collected through the fees can be used in a variety of ways that include funding road or bridge projects; enhancing emergency preparedness and public safety; improving water and storm water systems; and supporting career and technical centers that train workers in the oil and gas industry.
Currently, there are three operating Marcellus Shale wells in Jefferson County.
The next meeting of the board of commissioners will be Tuesday, Feb. 28, 2012 at 10:30 a.m. in Jefferson Place, Brookville.