Gov. Tom Corbett's unveiling of his proposed Marcellus Shale legislation on Monday gave lawmakers, natural-gas drillers and environmental advocates a long-awaited glimpse of what the chief executive believes should be done to regulate and support the industry.
What that legislative package will look like after the General Assembly is through with it later this fall is yet to be seen.
That three-part proposal -- including a county-assessed impact fee on Marcellus Shale gas drillers, stronger environmental rules and also incentives for switching vehicles to natural gas -- was met by the Republicans who control both chambers with promises to consider it and by Democrats with cries that it missed the mark.
Environmentalists gave a stark review, saying that sending a majority of the funds raised from an impact fee back to local governments would undercut environmental efforts downstream from the drilling region.
Industry officials generally welcomed the plan, emphasizing the portions on encouraging natural gas use.
One point that most sides did agree on, however, was timing: Mr. Corbett described an urgency to make the commonwealth more competitive with fellow drilling states such as Ohio and West Virginia, and lawmakers also were eager to have a measure approved before the end of session in December.
The administration-drafted plan greatly reflects the recommendations from his Marcellus Shale Advisory Commission report, which was sent to him in late July. Until Monday, he had mostly been tight-lipped about what he thought of those suggestions, which his staff had been reviewing and crafting into a regulatory proposal.
At Monday's news conference at the Carpenters Training Center in Collier, Mr. Corbett presented his policy plan as a way to increase job creation throughout the industry and safely produce natural gas.
"Energy equals jobs, and we sit on top of energy," he told the crowd of reporters and carpentry apprentices.
With broader support for boosting fines and bonding payments as well as converting fleet vehicles, much of the immediate reaction focused on the drilling fee proposal. The governor's office estimated that would generate about $120 million the first year and reach $200 million annually by the sixth year.
The fee would be structured in a similar way to a measure released this spring by Senate President Pro Tem Joe Scarnati, R-Jefferson.
Both plans would initially assess all wells within a county at a $40,000 annual fee, which would decrease each year. The governor's proposal would allow each county to set that rate, as long as it does not exceed $40,000 in year one and provided that it is not charged on a well for more than 10 years.
Counties would retain 75 percent of those funds, splitting them among county government and municipalities. The remainder would be divided among the state Department of Transportation, Emergency Management Agency, Office of State Fire Commissioner, Department of Health, Public Utility Commission and Department of Environmental Protection.
Mr. Corbett defended that plan as not violating his no-tax pledge from the campaign, saying the levy is a fee, not a tax, and is directed at the costs associated with drilling.
"This is a creation for a new industry that is having a clear impact on Pennsylvania, to get resources to localities, municipalities and, of course, 25 percent to the state to help make that industry grow," he said.
Whether dubbed a tax or a fee, the name of that assessment appeared less important to most legislative leaders as the details that they soon will be negotiating.
"As we move toward ensuring that communities across the Commonwealth are protected from the impacts of drilling, there will be discussion on the percentage that goes to local jurisdictions and what environmental programs will be funded and at what level," Mr. Scarnati said in a statement.
Mr. Scarnati, who has led the charge in the state Senate for imposing a drilling fee and updating the state's natural-gas regulations, also said he still has concerns about how to craft zoning rules so that municipalities are not caught up in costly legal battles.
While the senator's proposal would have tied impact fee dollars to some standardization of local ordinances, Mr. Corbett's new version does not address differences in zoning laws.
But some lawmakers said privately that a more challenging hurdle may be working out whether to assess the fee at the county or state level.
They cautioned that allowing counties to set different rates, or not impose a fee at all, could significantly impact how much revenue is raised.
The state's county commissioners association, among those to be briefed by the Corbett administration Monday morning, did not have an immediate stance on creating a county-collected fee.
"On one hand, it's always difficult to put up a local vote to level a fee, particularly on a competitive industry," said Doug Hill, the association's executive director. "But keep most of it at the local makes it genuinely what it is, an impact fee. And it's certainly a defensible vote."
In Washington County, which is among the state's five most-active counties this year for wells drilled, one official said he thought enacting such a fee would be a popular vote locally.
"All you gotta do is come down here and drive around to see the impacts," said Scott Fergus, the county's director of administration.
"It could be put to use pretty well."
But Senate Minority Leader Jay Costa, D-Forest Hills, criticized that local-based method, saying it "leaves a whole lot of haves and have-nots" among Pennsylvania counties. He said any fee needs to raise at least $200 million to ensure that enough funds are available for those not in drilling areas to also see benefits.
House Democrats, who have mostly stood by their position that a hefty assessment is needed, were blunt in their responses: "It's an early Christmas present for the drilling industry and I will not be voting for this plan," said Rep. Greg Vitali, D-Delaware.
Meanwhile, GOP leaders of the state House, who have pushed for gas-use incentives but shied away from an impact, gave a somewhat cryptic response. Caucus spokesman Steve Miskin said they will be vetting the plan in the coming weeks.
"Our top priority is jobs, and there's no question that the Marcellus industry is creating jobs," Mr. Miskin said.
