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PA Governor Signs Marcellus Shale Law

On Feb. 14, Gov. Tom Corbett signed House Bill 1950, the Marcellus Shale Bill, which is designed to enhance protection of the state’s natural resources through stronger environmental standards, as well as authorizing counties to adopt an impact fee, and move Pennsylvania toward energy independence.

According to a news release, the new law enhances environmental standards by:

  • Increasing well-setback distance from 100 feet to 300 feet for streams,
  • rivers, ponds and other water bodies, and from 200 feet to 500 feet from
  • buildings and private water wells and to 1,000 feet for public drinking water
  • systems.
  • Expanding an unconventional operator’s “presumed liability” for impairing
  • water quality from 1,000 feet to 2,500 feet from a gas well, and extends the
  • duration from 6 months to 12 months.
  • Enhancing water quality replacement standards to meet Safe Drinking Water
  • Act standards.
  • Enabling DEP to revoke permits in a more efficient manner to deal with imminent safety or environmental concerns.
  • Increasing blanket bonds from $25,000 up to $600,000.
  • Providing for strong, uniform and consistent statewide environmental
  • standards – building upon and incorporating the best practices used by industry leaders.
  • Enhancing hydraulic fracturing disclosure, including online posting through

FracFocus.org.

“This growing industry will provide new career opportunities that will give our children a reason to stay here in Pennsylvania,” Corbett said. “Thanks to this legislation, this natural resource will safely and fairly fuel our generating plants and heat our homes while creating jobs and powering our state’s economic engine for generations to come.”

The impact fee, which goes into effect immediately, will be used by local communities experiencing the impacts of unconventional shale gas development. The fee amount can fluctuate annually and is based on the average price of natural gas in the preceding year.

According to the news release, if all eligible counties adopt the fee, estimated revenue will be about $180 million in 2012, $211 million in 2013 and $264 million in 2014.

State agencies that mitigate shale gas impact like DEP, PUC, PA EMA, and the state Fire and Fish and Boat commissions will receive a fixed dollar amount from the revenue collected. The remainder will be distributed to impacted counties directly and through population or road mileage formulas or competitive grants.

The law also provides long-term regulatory predictability for job-creators and
capital investors, and provides increased uniformity and fairness of local regulations while preserving local government’s traditional zoning authority.

Also, the law creates a Natural Gas Energy Development Program, to provide incentives to convert fleets with vehicles weighing at least 14,000 pounds to compressed natural gas, liquefied natural gas, or bi-fuel vehicles. At least 50 percent of the funds must be used for grants to local transportation organizations, including mass transit agencies.