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Senate of Pennsylvania
Session of 2013 - 2014 Regular Session


Posted: May 9, 2014 09:15 AM
From: Senator Michael J. Stack
To: All Senate members
Subject: Comprehensive Marcellus Shale Reform measures
In the near future, I will introduce legislation that would overhaul Act 13 to increase revenue from Oil and Gas companies that drill in Pennsylvania. Pennsylvania lags far behind the revenue collection West Virginia collects due to a 5% severance or extraction tax. Since both states share the same geographic benefits in having shale reserves under their borders, it's only fair that the Commonwealth addresses their nearly $1 billion budget deficit without raising taxes on its residents.

This legislation would also provide serious safeguards on what chemicals are being used in the drilling process, the maintenance and management of our natural resources and some teeth behind our enforcement process. This legislation will include:
  • The implementation of an extraction tax that mirrors what West Virginia charges (5%)
  • Ensure that inspectors issue Violation Notices without prior approval from the Governor’s office; Amend section 3253. Enforcement orders
  • Ban the dumping of any gas well wastewater that is not fully treated into open wastewater pits; Amend section3218.2 Containment for unconventional wells
  • Ban the dumping of any gas well wastewater that is not treated to Safe Drinking Water Standards into rivers and streams – from both Marcellus shale and conventional wells; Amend section3218.2 Containment for unconventional wells
  • Enact a separate $3 million impact fee for gas wells drilled on state forestland or state parks to discourage drilling on our public lands and impose strict environmental restrictions to prevent gas drilling in state parks; Amend section 2302.
  • Enact requirements for green completions during well completions;
  • Insure that the best available technology is deployed on compressor engines to cut air emissions by 90% or more; Amend Section 3227 Air contaminant emissions
  • Require world class maintenance and inspection of gas drilling equipment to prevent and identify methane leakage and gas leaks;
  • Sharply limit flaring of natural gas at wells; Amend Section 3227 Air contaminant emissions
  • Modernize and strengthen rules designed to prevent methane migration; Amend Section 3217 (b) Protection of fresh groundwater and casing requirements
  • Create a transparent, easy-to-use DEP website that discloses the chemicals used at gas well operations; Amend section 3222 (b.1) Reporting requirements
  • Require gas drillers to pay twice the property value if they contaminate a landowner’s private water well. Amend section 3218 Protection of water supplies
According to the the Pennsylvania Budget and Policy Center and the West Virginia Center on Budget & Policy, West Virginia’s severance tax falls into the mid-range of other gas-producing states, the groups said, while Ohio has a 3 cents tax for every thousand cubic feet (MCF) of gas that is produced, and Pennsylvania, a drilling impact fee.
A severance tax will simply ensure that everyone gets their fair share,

A comparable tax rate will allow our states to invest in a stronger economic future. It will also provide the safety precautions our Commonwealth needs to address any contamination or environmental impact concerns.

Introduced as SB1370