Last week, the state Senate Environmental Resources and Energy Committee amended legislation to create a Marcellus Shale drilling impact fee in Pennsylvania. The full Senate could vote on it as soon as this week.
To channel my inner David Letterman, I have here a copy of the top 10 11 things to hate about this plan. (There was so much to hate about it, we couldn't even fit it into a top 10 list.)
- Drilling companies get a great deal. The 1% effective tax rate is one of the lowest in the country, much lower than West Virginia, Texas, Wyoming, New Mexico, Louisiana or Alaska.
- The bill provides no funding for statewide drilling impacts, but it gives drilling impact money to communities that have no drilling at all. A town miles away from an active well can still get a fat check every year.
- The bill strips criminal penalties for drillers who fail to pay the tax or fail to submit reports on their drilling activity. Welcome to Pennsylvania, feel free to flout the law.
- Despite raising hundreds of millions of dollars, the fee doesn’t put one penny toward enforcement of state environmental laws, pipeline inspections or groundwater testing. Taxpayers in Allentown and Chester get to pay for that — and may get contaminated water to boot.
- The bill allows local governments to use drilling impact funds to reduce local property taxes. A community that can reduce its property taxes must have no drilling impact. So why get money from an impact fee?
- There’s a hitch. For communities to collect their impact fee they have to adopt a state-approved zoning ordinance. Try to protect your citizens from the drillers with stricter rules on noise, light or hours of operation — no soup for you. So much for local control.
- Companies would pay no fee for 75% of the well’s active life. Better have those accidents early on — or taxpayers will have to pick up the tab.
- Deadbeat drillers get a free pass. Walk away from your well when the gas runs dry and the state will come in and cap it for you. So much for corporate responsibility.
- The rest of us send our taxes to Harrisburg to pay for libraries, schools, hospitals, nursing homes, roads, bridges, and colleges throughout the state. The drilling communities get to keep drilling revenue and benefit from statewide tax dollars too. Sweet deal.
- Funding for Grower Greener, open space preservation, clean energy, recreation trails, or conservation programs? Fuggetaboutit.
- For one moment, there was a chance for politicians from across the state to come together, make a clear-eyed assessment of the expected benefits and certain costs of gas drilling, and enact a responsible plan. A plan to protect the environment, compensate local governments for drilling-related costs, and provide resources to promote learning, spur innovation and improve the quality of life of all Pennsylvanians. And they missed it.