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Drilling's dividends

Published September 12. 2012 05:03PM

Just as it was with the coal industry a century ago, Pennsylvania is seen as a strategic player in the nation's thirst for energy independence.

The state is beginning to see some positive returns from the Marcellus shale formation which lies beneath about 60 percent of the commonwealth, and which some officials say could become the leading supplier of natural gas in the United States within a decade.

Earlier this year, Gov. Tom Corbett said in an interview that he felt the natural gas industry will continue to grow, providing thousands of jobs spawning off new businesses in the Marcellus region.

Eighteen months ago the governor formed a Marcellus Shale Advisory Commission to recommend gas drilling policies. The 30-member panel, consisting of environmentalists and local government officials, was charged to oversee the buildup of the new industry while making sure the lands, drinking water, air, and communities remain protected. A third of the panel members represented drilling companies, something which some critics saw as a stacked deck favoring the drilling industry.

One of the things the governor pushed was the impact fee on gas drillers which was to help counties deal with the truck traffic and other intrusions to daily life made by the gas drilling companies. Corbett said he didn't want that money going into a general fund but wanted to send it back into the impacted counties to be used for roads, housing and other social services.

The governor's plan had its critics, some of whom felt that the fee on the drilling companies was too small and that a more comprehensive drilling tax would provide the money to protect the environment as well as allow all Pennsylvanians to benefit, not just those in counties where the drilling is taking place.

This week, the Public Utility Commission, which collects the drilling fee, announced that nearly $206 million has been raised from the 4,453 wells across the commonwealth. The fee amount is determined by the sliding price of natural gas.

As Corbett originally planned, about 60-percent of that money is being divided among the 37 counties and 1,500 municipalities where gas wells are located. The rest of the fee money will be divided among the state agencies which deal with drilling industry. The next fee payment - for drilling done in 2012 - will be due next April. The fees will be collected once a year for 15 years.

On a related note, the Department of Environmental Protection will be holding a Natural Gas Vehicle seminar at the Community College of Allegheny County this Friday. It's designed to help municipal and commercial fleet owners make informed decisions about converting their fleets to compressed natural gas and liquified natural gas.

According to DEP Secretary Mike Krancer, the revenue from the drilling impact fees will be used to promote the fleet conversions.

Similar seminars are planned for next month in shale-impacted areas, including one at Pennsylvania College of Technology in Williamsport, Lycoming County, on Oct. 17 and one at the Lackawanna County Center for Public Safety in Jessup on Oct. 30.

In these budget-crunching times, every possible revenue source helps, whether it's cashing in on impact fees from the drilling industry, or exploring the alternate fuel savings by converting vehicles to natural gas and liquified natural gas.

By Jim Zbick

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