PA considers leasing state land for gas drilling

Gas leasing likely to proceed either with new taxes or on leased state lands HARRISBURG — Republicans in the state House of Representatives last Friday outlined a $27.3 billion alternative budget proposal that would expand gas drilling on state lands. The House GOP budget proposal assumes the state would collect $208 million in the current year by allowing natural gas drilling on 130,000 acres of Pennsylvania’s 2.1 million acres of state forest land. The amount of land leased for drilling would increase over three years to eventually reach 390,000 acres. About one-third of Pike County is held in state owned forest and game lands and federal parkland. In June, Pennsylvania Game Commission Executive Director Carl G. Roe offered support for House legislation that would provide an alternative source of funding for the commission through a two percent cut of the state privilege tax on every producer who extracts natural gas. The land leasing proposal reportedly was a counter to that severance tax, offered in Gov. Ed Rendell’s budget. The Republican plan would have the state Department of Conservation and Natural Resources select and then lease 390,000 acres of Pennsylvania forest land to Marcellus shale drillers. Leases would be competitively bid, with a minimum bid of $2,000 per acre. Land would be opened over three years, 130,000 acres per year. Pennsylvania is budgeting drilling revenues as neighboring New York has initiated a formal public review process of Marcellus and other horizontal shale formation drilling, including environmental issues associated with the increased use of high-volume hydraulic fracturing “fracking”. There is no formal moratorium in place preventing drilling permits, but the state is requiring a complete SEQRA review of each permit application while the study continues. In Washington, the House Appropriations Committee in June approved a measure by Rep. Maurice Hinchey (D-22) calling on the Environmental Protection Agency to study potential risks to groundwater from proprietary chemical combinations used in fracking. Hinchey’s N.Y. district adjoins Pike and Wayne counties, where most homes have private water wells. Hinchey contends that more than 1,000 cases of contamination have been documented by courts and state and local governments in New Mexico, Alabama, Ohio, Texas, Pennsylvania, and Colorado. In one case, he said a house exploded after hydraulic fracturing created underground passageways and methane seeped into the residential water supply. State officials are seeking ways to close a $3.3 billion revenue shortfall left at the June 30 end of state’s fiscal year. Rendell’s proposed severance tax is projected to bring in $632 million a year by 2013-14. He is calling for a mix of cuts and tax increases, while Republicans reject new taxes and seek deeper spending cuts. The state lost of much of its ability to spend when the new year began without a budget in place. State paychecks will cease entirely after two weeks if a deal has not been struck by then.