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It’s time to get smart on Marcellus Shale

by Joe Hoeffel

A fiscally-challenged Commonwealth of Pennsylvania, which is looking at severe program cuts, tax increases or both over the next few years, is positioned at critical crossroads. At the end of one of these roads is the potential for a new economic day in Pennsylvania, with state revenues increasing dramatically, local economies thriving, thousands of new jobs and a position as one of the leading suppliers of natural gas in the United States.

However, danger lurks along this route in the form of potentially catastrophic environmental damage to the state, along with the possibility that taking the wrong route will severely limit the economic advantages that potentially wait at the end of the correct route.

I speak of course about the extraction of natural gas from Marcellus Shale that lies a mile beneath two-thirds of Pennsylvania’s land, and could be the largest natural gas reserve in the nation. As energy companies flock to Pennsylvania to drill into our soil and extract a precious natural resource, it is critical that we make sure to protect our environment, while at the same time ensure that our residents receive the greatest financial return possible for the extraction of this natural gas, which will someday be gone.

As governor, I will be committed to making sure that we have responsible gas drilling with strong environmental regulations, and I will make sure that taxpayers get a fair deal from the gas companies that will be profiting from our natural resource.

The drilling process called hydraulic fracturing requires millions of gallons of fresh water to drill each well and requires the introduction of dozens of chemicals into the water. Most of this water eventually returns to the surface as industrial wastewater. Each well produces millions of gallons of chemical-laced wastewater, and currently the natural gas industry is not required to treat this wastewater. In 2008 and 2009, over 1,000 wells were drilled and began operation in Pennsylvania’s Marcellus Shale. Over 2,000 drilling permits were issued by the end of 2009. The Department of Environmental Protection estimates another 5,200 drilling permits will be issued this year.

Obviously, action is necessary and overdue. I have called for a moratorium on issuing new gas drilling permits until new wastewater regulations are in place and enforceable. The natural gas industry is exempt from the Clean Water Act and the Safe Drinking Water Act. Pennsylvania has wastewater treatment regulations, enforced by the Department of Environmental Protection, but Pennsylvania’s regulations don’t cover most of the chemicals in Marcellus Shale wastewater. The drinking water supply of the entire commonwealth is at risk of contamination.

We cannot afford a repeat of what the coal industry got away with in Pennsylvania for decades. I will advocate for stronger wastewater treatment regulations that establish limits on the amount of total dissolved solids and toxic chemicals, to comply with Safe Drinking Water Act standards.

In addition to protecting the drinking water of Pennsylvanians, we must also protect their financial interests. Pennsylvania must require natural gas companies to pay a severance tax on the gas they mine. Incredibly, Pennsylvania is the only major natural-gas-producing state without a severance tax. The silver lining is that we can learn from other states and create a fair tax with maximum benefits.

The industry is extraordinarily profitable and Pennsylvania’s natural gas supply is enormous. So far, our commonwealth is getting a lousy deal. As governor, I will seek a severance tax, which will double the projected revenue from Gov. Ed Rendell’s currently proposed tax to provide Pennsylvania with $300 million in its first year.

Once this tax is in place, we must use the revenues wisely. A severance tax won’t last forever. Once the gas is gone, the tax revenue ends. Pennsylvania must devote some of the severance tax money to protecting the towns experiencing a boom economy during the gas rush from experiencing a bust economy later.

Other revenues from the tax should go to:

• DEP’s inspection and enforcement operations
• New wastewater treatment facilities
• The renewal of Growing Greener legislation
• Communities affected by the drilling

We must act now, and act responsibly. Too many public officials in Pennsylvania are only looking at how the natural gas industry can swell their campaign coffers. Pennsylvania needs someone to look out for their interests and make sure we take full advantage of this opportunity, while protecting the environment, especially our drinking water.

We cannot put our people at risk—people like the Washington County resident who tested his water after three wells were drilled on his property and found arsenic at 2,600 times acceptable levels, benzene at 44 times above limits, and naphthalene five times the federal standard.

We cannot have any more instances like what happened in Dimock, where tests have shown drinking water now contains high quantities of aluminum, iron, and methane.

We can benefit tremendously from the natural gas reserves of the Marcellus Shale with careful planning. With environmental regulations that protect our water statewide, a severance tax which allows our towns to adapt to their new industry, and a plan in place to protect our state land, Pennsylvania can take pride in its natural gas industry. Landowners, towns, and the commonwealth will prosper, but this will only happen as long as the next governor puts the welfare of Pennsylvanians ahead of political considerations.

The writer, a Montgomery County Commissioner, is a Democratic candidate for governor.

May 12, 2010 at 12:06 pm

--Joe Hoeffel

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