Commw Court Asks - Pig in the Parlor or the Barnyard?

Yesterday, a divided Commonwealth Court decided that localities, and not the state, have the right to decide whether the pig belongs in the parlor or the barnyard. Speaking for a four-judge majority, President Judge Dan Pellegrini invalidated most of a state law that trumps local zoning control over Marcellus shale gas drilling.

Pellegrini reasoned that if state lawmakers usurp local control over oil and gas mines, it's only a matter of time before they decide that industrial chicken farms and fireworks plants should be allowed in residential zones. "It would allow the proverbial 'pig in a parlor instead of the barnyard,'" writes the President Judge.

Just as colorfully, dissenting Judge P. Kevin Brobson quips that "this particular pig ... can only operate in parts of this Commonwealth where its slop can be found."

The Court's decision, incidentally, has some interesting language about standing and special legislation.

While making no references to pigs, Congressional candidate Matt Cartwright praised the decision for restoring "the autonomy of local municipalities in protecting the air and water of our local neighborhoods. Once again, citizens can expect look to local elected officials to stand up to forces that may pose environmental threats to local communities.”

Cartwright added that he hopes state lawmakers "will take this as a cue to enact responsible environmental regulations, charge a fair severance tax on drillers, and allow local communities to protect themselves from future environmental harm.”

Simmons Sets All Hail Marcellus Shale Meeting For June 2

State Rep. Justin Simmons will host a free Marcellus Shale informational meeting at 7 p.m. on Thursday, June 2, at the Southern Lehigh Public Library, 3200 Preston Lane in Center Valley.

According to Simmons, "Marcellus Shale drilling in Pennsylvania has the potential to be a tremendous boon for our Commonwealth in the form of sustainable revenue and jobs." But even this conservative Republican warns of the need to be "as informed as possible regarding not only the benefits, but also any possible associated safety and environmental impacts."

Simmons hopes to have several Marcellus Shale experts on hand.

You can register by contacting my office at (610) 861-5201 or online here. Light refreshments will be served at this event.

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LC Comm'rs: All Hail Marcellus Shale

Don't worry. Lehigh County Commissioners have no authority to enact a severance tax on natural gas extracted from the Marcellus Shale. But it does have the power to ask the General Assembly to restore funding to the local conservation districts and consider using any taxes levied on drilling in Marcellus Shale. In a Resolution sponsored by Dr. Percy Dougherty last night, that's exactly what happened. The vote was 6 -3, which Chairman Dean Browning, Glenn Eckhart and Andy Roman opposed.

I have a "cliff notes" version of last night's meeting in the above, 9-minute, Youtube movie. It includes two tea party members as well as an interesting Marcellus Shale debate.

Dr. Percy Dougherty: "The state has been reneging on its responsibility to give the conservation district, funding. W are having to cut some funding out of the conservation district this year because of budget problems. I think it's only fair that we put pressure on the state to try to restore some of this funding. The state has a big shortage of money, too. ... This particular resolution is not supporting a tax on the Marcellus. .. It is just stating that if a tax is enacted, that we want to see part of this funding go to the conservation district. ... This is an amount, in Lehigh County alone, of over $92,000. ... The conservation district is our main line of defense, safeguarding the environment ..."

"This is just an attempt here to let our legislative delegation know that we want to see them live up to their responsibilities and pay their bills.

Glenn Eckhart: "Let's not give our legislators a chance to say, here is something, where if I vote for this, I can raise revenue, and tax something. So let's not give them the option. This is about ending the dependence on foreign oil, and it shouldn't be taxed."

Andy Roman: "Marcellus Shale is a huge economic boon for Pennsylvania, and I don't know if we should be encouraging additional taxes ... . My view is it's going to produce a lot of jobs, it's going to produce a lot of revenue ... I don't know if you should be taxing an industry that's in its infant stage."

Dan McCarthy: "The conservation issue deals with the environment, our natural waterways, it deals with development and the destruction of our soils and water systems ... . This type of drilling operation is going to impact our waterways, our goundwater, our soil; we're going to have to deal with the consequences of that."

Dean Browning: "I have no problem with us calling them out for the fact that they have put in place a program and then reneged on the funding for that program. I think we should call them out. However, as part of that, I don't think it's incumbent on us to identify a revenue source for them to use to facilitate the commitment they've already made. ... We are taking a tax that has not been enacted and are already spending it."

Bill Hansell: "Those who are opposed to this should be prepared to vote to increase the funding for the conservation district."

Gloria Hamm: "Pennsylvania is the only one of 15 gas producing states that doesn't have any kind of impact fee on the drillers. Part of the impact fee should be used to protect natural resources and repair any collateral damage that the drilling causes."

Dr. Percy Dougherty (Round Two): "The state is in such a financial hole right now that they're going to have to get out of it somehow. If you do multiple choice, what is the state legislature going to do? Are they going to pass the severance tax, or are they going to pass an increase in the state income tax or arr they going to pass an increase in the sales tax? I think it's more likely that they're going to go with the severance tax. That's the way everything is headed."

Orloski & Browne: A Civil Debate About Marcellus Shale

State Senator Pat Browne and his Democratic opponent, Allentown attorney Rick Orloski, are once again waging an issues-oriented campaign, devoid of the personal insults so common everywhere else. Earlier this year, Brown actually withdrew a challenge to Orloski's nomination petition after an impassioned personal appeal from his opponent. Now these opponents are engaged in a refreshing civil discussion of Marcellus Shale, which could lead to economic prosperity or environmental disaster. I wish they could both serve.

Orloski to Browne:

Republican Senate leaders have previously committed to Governor Rendell to enact a severance tax on Marcellus Shale drillers/producers by October 1st. The deadline is fast approaching, and Republicans appear to be welshing on that commitment.

I understand that your gubernatorial candidate, Tom Corbett, has publicly committed to no tax on Marcellus Shale drillers and producers. In simple terms, he is cprepared to allow out-of-state and foreign companies to come into our state and pipe away our natural resources without any direct financial benefit to the common weal. The taxpayers of the 16th senatorial district ought to know where you stand.

There are only two real options:

1. The taxpayers ought to receive a direct financial benefit from the drilling operations in the form of a substantial "severance tax"; OR

2. The Pennsylvania Legislature will be giving big oil and natural gas industry a gift of our natural resources and allow them to extract the natural gas without any benefit to the citizens of Pennsylvania.

As you should know, no state with substantial natural gas resources just gives it away. Every major gas producing state imposes a severance tax. Governor Rendell has proposed that Pennsylvania follow the West Virginia model, namely, a 5% levy on the value of the natural gas that is sold + a surcharge of 4.7 cents for each 1000 cubic feet of gas produced. Are you prepared to support the West Virginia model for a severance tax?

Needless to say, a severance tax is only the first part of the equation. Pennsylvania needs a new regulatory structure to make sure that the gas is extracted without causing environmental damage. The first part of the equation, however, is a severance tax. I am calling upon you to join with Governor Rendell to support a substantial severance tax so that our taxpayers get tax relief from the depletion of this natural resource.

Senator Browne, where do you stand on this vital financial and environmental issue?

There is a large contingent of Republican ideologues in the State Senate who want to delay the vote with the hope that a newly elected Governor Corbett will veto the severance tax. That is contrary to the earlier commitment and is not in the best interests of the Pennsylvania taxpayers. I call upon you to stand with Governor Rendell and oppose the ideologues in the State Senate who want to give our natural resources away to the oil and natural gas industry with either no tax or a minimalist tax.

Your constituents want to know.

Richard J. Orloski

Browne to Orloski:

Rick:

Thanks for your letter. I along with the rest of the Republican leadership team in the Senate plan to keep our commitments made as part of the 2010-2011 budget negotiations. I am surprised, however, that the only direct benefit you see from the largest energy development opportunity in Pennsylvania in the last one hundred years is revenue from an excise tax. I would argue that the projected 200 thousand jobs to be created by the proper development of the Marcellus play to be a much more significant direct financial benefit to Pennsylvania than the revenue from an excise tax will ever be. Taking such a position is to argue that the only direct financial benefit received from Pennsylvania's powerful legacy of "natural resource" based industry was the checks attached to the steel and coal corporate tax returns.

While we are on commitments, both chambers had also agreed as part of the 2010-2011 budget negotiations to establish an independent fiscal office by the end of the year. Since this office will lead to a better accounting and utilization of the severance tax revenue the commonwealth will generate, I am sure you will bring your advocacy to bear for this initiative as well. All the best,

Pat

Orloski: Marcellus Shale Could Be Boon Or Disaster

Allentown Attorney Rick Orloski is running for the state senate seat currently held by Pat Browne. He has submitted this informative primer on Marcellus Shale.

Marcellus Shale is potentially a $2 trillion (not billion, but trillion) economic boon to West Virginia, Pennsylvania and New York. It has the potential to make the Mid-Atlantic region second only to Texas in supplying customers with natural gas, a clean burning fossil fuel.

It is the most under-covered political story in the Lehigh Valley both regards to its economic impact, environmental consequences and its ability to fuel the engines of state government.

What is Marcellus Shale?

The Marcellus Shale is a formation of black shale. It is located in Ohio, West Virginia, western, central and northeastern Pennsylvania. It is located underground at various depths and at different thicknesses with a 790 feet dense area located in central Pennsylvania. Non-tradition drilling cannot economically access the natural gas. The existence of natural gas has been known for years. Changes in technology has made drilling for natural gas in Marcellus Shale viable.

New Technology: Horizontal Drilling & Fracturing

A "horizontal well" starts as a traditional vertical well. After reaching the desired depth, new tools are used to curve the well so that the well goes horizontally. The horizontal drilling can proceed thousands of feet. The purpose of horizontal drilling is to create maximum contact with the gas bearing rock formations to release the maximum amount of gas. Horizontal drilling is only part of the equation. It is accompanied by "hydraulic fracturing," meaning pumping water and other chemicals into the well under high pressure to break the gas bearing formations.

Problem With Fracturing

Fracturing requires tremendous volumes of water. Current estimates are that each well may require more than one million gallons of water. Environmentalists worry that "fracturing" exhausts clean water supplies and returns polluted water at the well site. Why pollution? According to the Pennsylvania Department of Environmental Resources, the fracturing process uses up to 80 different chemicals, including Acetic Acid, Boric Acid, Hydrochloric Acid, Titanium Oxide and Xylene to name just a few. The chemicals are added as a friction reducer and a bacteria inhibitor. The problem is that the chemicals have the potential for poisoning our underground water. The subsequent mechanism for disposing the retrieved fluids inserted into the wells creates additional environmental problems.

Severance Tax

Every state that permits natural gas extraction imposes a "severance tax' on the drillers. So far, the Pennsylvania Legislature has let the issue of an appropriate severance tax slide.

"Forced pooling"

The industry has been lobbying for a minimal severance tax. As a condition of paying a severance tax, the gas industry wants a mandate that adjacent owners who refuse to lease their land to drilling be forced to give up their gas to the drillers. "Forced pooling" creates a substantial interference in traditional notions of private property rights.

Utility Status

The drillers/producers are also lobbying to be declared utilities so they can have the right to eminent domain both for drilling purposes and for locating their pipe lines to transport the gas. Again, this concept of private companies clothed with the right of eminent domain clashes with tradition notions of private property rights.

The Jobs Benefits

The Christian Science Monitor reported that Marcellus Shale has the potential for creating 282,000 jobs between 2011 and 2020 in Pennsylvania, West Virginia and New York.. Potential tax fall for Mid-Atlantic area can reach $6 billion in local, state and federal taxes. The economic benefits are real. So are the prospect of an environmental catastrophe reminiscent of the Robber Barons of prior centuries. The next State Senator from the Lehigh Valley will be required to address these significant issues balancing economic benefits against environmental protection. As a State Senator, I will support extending the regulatory power of the Department of Environmental Protection to insure that our environment is not ravaged, that a "fair" severance tax be impose, that "forced pooling" be verboten and that the industry will not be clothed with the right of eminent domain.