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August 2, 2011

Some Pa. cities concerned about drilling fee

August 2 — TIMOTHY PUKO,Pittsburgh Tribune-Review

PITTSBURGH (AP) — Even if state lawmakers approve a tax or fee on gas drillers this fall, some local leaders might not take the money.

Communities in the heart of the Marcellus shale could turn down such revenues that come with strings attached. Many want to be able to set their own rules for problems such as road damage, noise, lights and storm water runoff, but they might have to accept state-prescribed rules for such problems to collect money from a drilling impact fee.

"If it's something that's going to hurt the township, I definitely would vote against it," said Andy Schrader, supervisor in Cecil, home to dozens of energy companies and some of the region's biggest gas drillers.

"Sounds like they want us to sell our soul to them," said George M. Lucchino, a township supervisor in Robinson in Washington County. "That's how I personally take it: We do what they tell us to do, and then they'll give us the money. ... I'm not giving up the controls in our township."

Municipal governments can't ban drilling or set environmental regulations for it, but they can use zoning laws to force extensive reviews and to open some parts of neighborhoods to drilling while closing others. They have used such laws to set limits on lights, noise and other potential nuisances at drill sites.

Drillers have pushed for a uniform, statewide set of oil and gas zoning laws. The drillers got support for that idea this summer from the governor's Marcellus Shale Advisory Commission, which recommended any tax levied on drillers be linked to state laws ensuring "fair and consistent municipal regulation."

That has set the stage for a debate in the General Assembly, where bills that would link taxes and fees with a uniform zoning statute are pending.

Going into that debate, the commission's recommendation should be seen as a win for communities, said David M. Sanko, a commission member and executive director of the Pennsylvania State Association of Township Supervisors. The recommendation would allow for municipal regulation as long as it does not "unreasonably impede the development of natural gas."

The commission acknowledged that "Pennsylvania is too large and too diverse for there to be a one-size-fits-all solution," Sanko said. "Our intent from the very beginning was that those would be local decisions, local determinations."

Several lawyers, however, said the recommendation is too vague.

"Any time lawyers use the word 'reasonable,' there's going to be disputes over it," said Lane Turturice, solicitor for North Bethlehem, which is in a legal dispute over zoning laws with Cecil-based Rice Energy. "It needs to be more spelled out" if it makes it into legislation, he said.

The language about "fair and consistent" regulation could undermine Sanko's claim, said Ross Pifer, director of the Agricultural Law Resource and Reference Center at Penn State University's Dickinson School of Law. That language could be interpreted to mean a one-size-fits-all set of rules is needed statewide, he said.

Some local officials will take advantage if there is no uniformity, said Drew Crompton, chief of staff for Senate President Pro Tempore Joe Scarnati. His staff is researching local zoning laws to show how several communities abused their rights by making laws so complicated they effectively ban drilling, Crompton said.

"I believe it would be a very bad idea to have a local impact fee given back to a local community if that local community did in fact ban drilling in their community or in their jurisdiction," Crompton said.

Scarnati's pending bill for an impact fee calls for the state Public Utility Commission to adopt a model ordinance. It would prohibit municipalities from getting money if they adopt more stringent zoning ordinances.

Some municipal officials said a state standard could work, but that the model ordinance needs to be flexible and, in some sections, give local officials a menu of choices. Cecil, for example, has an elementary school near one of its industrial zones, so it should have the option of putting conditions on drilling there, Schrader said.

At least three dozen municipalities in Washington, Westmoreland and Allegheny counties passed or are contemplating laws, and the trend is to allow shale gas drilling under "conditional use." That essentially means each well gets a lengthy review, which advocates say forces drillers to keep updated the communities in which they're working.

Industry officials have pushed for "permitted use," which allows drillers to drill without public reviews as long as they meet requirements in the zoning code. The industry understands why some communities want conditions on their work, but without some boundaries on those conditions they can impede development, said Kathryn Klaber, president and executive director of the Cecil-based Marcellus Shale Coalition.

"A permitted use by right is obviously the most straightforward way to give the most predictability for all parties involved," Klaber said.

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