Posts

Trail Logbook Project

Collaborative Trail Logbook – Reporting Gas Industry Impacts on PA Trail Experiences

(Harrisburg) – FracTracker.org and the Keystone Trails Association are proud to launch Trail Logbook: Reporting Gas Industry Impacts on Pennsylvania Trail Experiences – an effort to collect information from hikers and other trail users who have had negative or hazardous encounters while recreating in PA.

“Throughout the Marcellus Shale region, more and more we’re hearing of problems from our constituents,” said Curt Ashenfelter, Executive Director of the Keystone Trails Association (KTA) – a volunteer-directed, public service organization dedicated to providing, preserving, protecting and promoting recreational hiking trails and hiking opportunities in PA. “Pennsylvania hikers are concerned about the effect of drilling and want to play a role in monitoring the impact of this industry on PA’s forests and hiking trails.

With a simple-to-use form – available online and as a mail-in postcard – data on a variety of trail impacts related to shale gas drilling activities will be uploaded to FracTracker.org, a website providing a common portal to share data, photos, maps, and information related to the issues corollary to the shale gas industry. Photos of reported impacts can also be submitted.

“We’re pleased to be a partner in this grassroots endeavor to aggregate what have to date been mostly anecdotal but often alarming reports from our state’s extraordinary network of trails,” said Brook Lenker, Director of FracTracker. “We hope the information gathered helps to clarify the nature of the impacts and leads to sustainable solutions.”

“With over 3,000 miles of hiking trails in Pennsylvania and tourism being the Commonwealth’s 2nd largest industry, it’s critical to expose and address recurring problems caused by gas drilling activities, “ Ashenfelter added. “With a quick feedback loop like FracTracker, we can report problems to the appropriate agencies and gas drilling companies and seek remediation quickly.”

For more information on the Trail Logbook project, contact:

To  see the Trail Logbook submission page or to submit data, visit: https://stg.fractracker.org/logbook. If you would prefer to print out the logbook and mail it in, click here.

###

HB 1950 votes and numbers of wells

Covert Affairs in the Commonwealth

trans·par·ent  [trans-pair-uhnt, -par-]

adjective

    1. admitting the passage of light through interstices.
    2. easily seen through, recognized, or detected: transparent excuses.

antonyms:  opaque  |  secretive  |  HB 1950

While House Bill 1950 is not actually listed as an antonym to “transparent” in the dictionary, its passing certainly acted that way. On February 8, 2012, PA’s HB 1950 was quickly bullied through the Senate and House with very little public transparency on what it contained. The lack of transparency during the move to pass the bill is similar to that of a drilled wells map for PA (yes, that’s a corny GIS joke). It now awaits the signature of Gov. Corbett – who has thanked the General Assembly for passing it. While HB 1950 institutes a sort-of impact tax that counties can decide whether or not to implement, the fee is the lowest in the country and is dependent partly on the [low] commercial price of gas. The bill also reduces the ability of local municipalities from individually zoning drilling (including pipelines). Tack onto all of that the fact that the data on these wells is just not up to speed with the pace of drilling. In one of Matt’s recent post about how many permits there are in PA right now, he notes that not even the PA DEP numbers can give you a straight answer. These numerical discrepancies make you wonder how thoroughly any permitting site assessments can be conducted when not all of the well locations can be accounted for. That issue makes the PennEnvironment Research and Policy Center’s recent report looking at drilling data even more frightening. Their analysis revealed that the gas drilling industry was responsible for 3,355 Marcellus Violations  between 2008 and 2011, many of which were not simply paperwork violations. At least the money set aside in the proposed state budget for improving emergency response on drills sites will be well worth it.

Ah yes, the proposed state budget… This intriguing reading was introduced by the Governor on the 8th, as well. According to John Quigley there is much to love and even more to hate in the 2012-13 budget proposal. To start off, this version of the budget WOULD NOT reopen the state forests to more leasing, something that many environmental groups were concerned could happen to help alleviate the state’s budget deficit. However, the Keystone Fund monies ($46 million) WOULD be reallocated into the general fund. This would be a major setback to conservation work because normally the money would be granted out to land trusts and conservation groups. That means less conservation work all around – at a time when it’s is needed more than ever.

There is much more to all of these issues, but instead of reinventing the wheel, here is a nice summary about the lack of transparency related to HB 1950. If you are interested in seeing how your representative voted on HB 1950, click on these links: PA House Roll Call Votes | PA Senate Roll Call Votes or check out the map below showing two layers of data on the:

  1. Number of wells per PA Senate district on a light to dark purple spectrum (darker indicates more wells)
  2. Vote on HB 1950, with green hatching indicating “yes” votes and red hatching indicating “no” votes.
To get the most out of this map: zoom in to your area of interest, click on the identify “i” button, and then click on a place on the map that you would like to learn more about.

 

Severance Tax vs. Impact Fee, Revisited

It may not seem like it when you head to the pump, but the price of oil has plummeted in recent months. After peaking near $114 in April, the price has fallen all the way to $77.27, as of today. Natural gas, which was $4.27 last month, has fallen 15 percent since then to $3.62. Surely with all of this uncertainty, the Corbett’s proposed impact fee makes more sense than the traditional severance tax which most states use? Perhaps it would be better to take the predictable lump-sum amount than basing that portion of the state’s coffers on the vagaries of the market?

No, not really.

Corbett’s plan allows the counties to charge up to $40,000 per well per year, for a period of up to 10 years per well. According to the Post-Gazette, his administrations figures it could bring in $120 million in the first year, and up to $200 million per year by the sixth year.

Or, as I pointed out in June, we could tax like Texas. Texas imposes a 7.5% severance tax on natural gas and 4.6% tax on oil and condensate. Using yearlong production data for non Marcellus Shale wells in Pennsylvania and the average wellhead price of gas and price per barrel of liquid hydrocarbons for 2010, I estimated that non-Marcellus wells would have brought in $72.5 million if we taxed our resources just like Texas does. What’s more, based on six month production data, I showed that the wells in the Marcellus Shale formation would produce at least $173 million, for a statewide total of $246 million through all formations.

But that was before the bottom fell out of the price of oil and gas. What if we used today’s low prices as a guide?


Estimated six month severance tax from the Marcellus Shale formation in Pennsylvania.

Even with the low energy prices, that six month total is almost as much as Corbett’s administration figures to raise in a year, and it doesn’t even include the tens of thousands of wells that aren’t drilled into the Marcellus Shale.

While the proposed impact fee does more for Pennsylvania than the current nothing-at-all policy, in the scheme of things, it is a great deal for the drilling industry.

And one final aside: does it seem strange to anyone else to let the counties set the impact fee? Is this some sort of attempt to have them compete with each other to keep the prices low? If so, it seems unlikely to work in my opinion. If a county charges the maximum $40,000, that represents only about 0.8 percent of cost of a well that costs $5 million to drill, and that figure is on the low end of the spectrum. The drilling companies will want to drill where the resources are, and whatever fees or taxes are charged will not change that fact.

Governor Unveils County Drilling Fee, Other Marcellus Shale Proposals

Reposted from PA Environment Digest

Proposal calls for 75% of fee revenues to remain local, 25% to the state

Gov. Tom Corbett today said he agrees with 94 of the 94 recommendations made by his Marcellus Shale Advisory Commission and will be recommending legislation authorizing counties to adopt a drilling fee whose revenue would be split between the state (25 percent) and local governments (75 percent) to offset costs imposed by natural gas development. The recommendations not adopted by the Governor include: forced pooling, re-writing the authority of local governments to regulate drilling linked to a drilling fee and adding natural gas to Tier II of the Alternative Energy Portfolio Standards. The Governor’s Office did not release legislative language or mention which recommendations would be adopted by legislation, regulation or policy. However, he said about one-third require legislative changes; more than 50 are policy-oriented and can be accomplished within the state agencies. The legislative priorities outlined today will be submitted to the legislative leadership in the near future. The governor has instructed the relevant Cabinet Secretaries to create implementation plans for the policy-oriented recommendations and to submit them to his office within 30 days. “This natural resource will fuel our generating plants, heat our homes and power our state’s economic engine for generations to come,” Corbett said. “This growing industry will also provide new career opportunities that will give our children a reason to stay here in Pennsylvania. We are going to do this safely and we’re going to do it right, because energy equals jobs.”

County Drilling Fee

Under the Governor’s drilling fee proposal, counties with Marcellus or Utica natural gas shales are authorized to adopt a per well drilling fee starting at $40,000 per sell and decreasing to $10,000 per well in four years. A county may provide for a fee credit of up to 30 percent if the driller makes approved investments in natural gas infrastructure, which include setting up natural gas fueling stations or natural gas public transit vehicles. “Estimates show that this impact fee will bring in about $120 million in the first year, climbing to nearly $200 million within six years,” Corbett said. “As the number of wells grows, so will the revenue. Almost all of the money it brings in will go to benefit the places experiencing the impact.” A quarter of the fee revenues would be sent to state government for several specific uses:

  • 4.5 percent– up to $2 million– to the PA Emergency Management Agency for emergency response planning, training and coordination;
  • 3.75 percent– up to $2 million– to the Office of State Fire Commissioner to develop and support first responder activities;
  • 3.75 percent– up to $2 million– to the Department of Health for collecting and disseminating information and supporting outreach activities for investigating health complaints related to shale gas development;
  • 7.5 percent– up to $2 million– to the Public Utility Commission for inspection and enforcement of pipelines;
  • 10.5 percent– up to $10 million– to plug abandoned oil and gas wells and provide for the enforcement of oil and gas programs requirements; and
  • 70 percent and an balance remaining to PennDOT for road and bridge maintenance and repair and transportation infrastructure improvements in counties hosting shale gas development.

Seventy-five percent of the revenues would be retained at the local level and allocated to counties (36 percent), host municipalities (37 percent) and 27 percent to municipalities in shale counties distributed by population and highway miles. Local governments could use the funding for road and bridge repair, water, stormwater and drinking water systems, reclaiming surface and subsurface water supplies, GIS and other information technology, project to increase the availability of housing to low income residents, delivery of social services including domestic relations, drug and alcohol treatment, job training and counseling, court system costs and conservation districts inspection and oversight of natural gas development.

Other Recommendations

As a part of this proposal, Corbett announced a series of prudent standards related to unconventional drilling, including:

  • Increasing the well setback distance from private water wells from the current 200 feet to 500 feet, and to 1,000 feet from public water systems;
  • Increasing the setback distance for wells near streams, rivers, ponds and other bodies of water from 100 feet to 300 feet;
  • Increasing well bonding from $2,000 up to $10,000;
  • Increasing blanket well bonds from $25,000 up to $250,000;
  • Expanding an unconventional gas operator’s “presumed liability” for impairing water quality from 1,000 feet to 2,500 feet from a gas well, and extending the duration of presumed liability from 6 months after well completion to 12 months;
  • Enabling DEP to take quicker action to revoke or withhold permits for operators who consistently violate rules;
  • Doubling penalties for civil violations from $25,000 to $50,000; and
  • Doubling daily penalties from $1,000 a day to $2,000 a day.

Corbett’s proposal also seeks to help secure energy independence and reduce reliance on foreign oil by developing “Green Corridors” for natural gas vehicles with refueling stations at least every 50 miles and within two miles of key highways; by amending the PA Clean Vehicles Program to include “bi-fuel” vehicles (diesel and natural gas); by helping schools and mass transit systems to convert fleets to natural gas vehicles; by stabilizing electric prices by using natural gas for generating electricity; and by encouraging the development of markets for natural gas and natural gas byproducts, such as within the plastics and petrochemical industries.

A summary of the Governor’s proposal is available online. Visit the Marcellus Shale Advisory Commission webpage for a complete copy of the July report.