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Tobash Calls for Action on Marcellus Shale Impact Fee

With natural gas drilling in the Marcellus Shale formation growing exponentially across the state, and the potential to find the resource locally, Rep. Mike Tobash (R-Schuylkill/Berks) says the state House should act sooner rather than later to assess an impact fee on the industry.


“Drilling in the Marcellus shale is already delivering a boost to job creation and the economy in Pennsylvania, but it also is having an impact on infrastructure and the environment,” Tobash said. “Let’s learn from past experience and act now to ensure those drilling for natural gas are held responsible for returning our land and water to the same condition in which it was found.”


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Tobash noted that while Gov. Tom Corbett originally stated his opposition to a severance tax on natural gas drilling, he has indicated more recently a willingness to at least consider an impact fee. This is coupled with the fact that the gas industry is adding substantial and growing income to the state’s bottom line. In fact, natural gas drillers are paying sales and use taxes, corporate net income taxes and the Capital Stock and Franchise Tax. In 2010, natural gas drillers paid $214 million in state taxes. So far this year, in just four months, they paid $238 million.


“The good news is that we have the potential to increase much-needed revenue while not putting additional pressure on our taxpayers and driving up the cost of doing business in our state.  Furthermore, because of improvements in technology we are now ready to take advantage of this tremendous resource for the benefit of our citizens,” Tobash said. “My hope is that with proper oversight we can protect the areas where drilling takes place, improve our local environment and infrastructure by freeing up dollars now being spent on impacted areas, and position Pennsylvania as a business leader by propagating low energy costs.”


In discussions with people in the drilling industry, Tobash said it is clear to him that they are prepared to pay an impact fee to address any environmental and infrastructure issues that may develop.


“It has even been stated to me that the implementation of a reasonable fee will result in some stability that does not exist right now while this debate continues,” Tobash said. “It’s time to move forward with this issue.”


In reviewing impact fee proposals in the Legislature, Tobash said he is looking for measures that ensure the revenue is specifically directed to addressing drilling impacts. “The last thing we need is for the impact fee to become another excuse to funnel money to Philadelphia and Pittsburgh,” Tobash said.


One impact fee proposal that has garnered significant attention in the Legislature has been introduced by Senate President Pro Tem Joe Scarnati of northwestern Pennsylvania. The bill is also expected to be introduced soon in the House by Rep. Jim Marshall of Beaver County.


Under the proposal, revenue from the impact fee would be distributed in three ways:


  • Conservation districts -- $2.5 million in the first year, $5 million in the second year and $7.5 million in the third and subsequent years.
  • Local governments – 60 percent of the impact fee for local governments would be deposited into a newly established account. It would be divided between:

1.    counties with producing unconventional gas wells.

2.    municipalities with producing unconventional gas wells.

3.    municipalities located in counties with producing unconventional gas wells. The funds may be used for reconstruction, maintenance and repair of municipal roads and bridges; preservation and improvement of municipal water supplies.

  • Statewide environmental and infrastructure impacts.

Tobash is also co-sponsoring a similar bill authored by Rep. Marguerite Quinn (R-Bucks) to help move the discussion forward.


“The best approach to this issue is one that ensures the environmental and infrastructure impacts of gas drilling will be addressed while also allowing sustainable revenue growth,” Tobash said. “The natural gas industry, as it currently stands, cannot and should not be viewed as a ‘quick fix’ for our present budget shortages, but if managed properly, the industry can play a vital role in creating a brighter future for Pennsylvania.”


State Representative Mike Tobash

125th District, Pennsylvania House of Representatives

Contact:  Patricia Hippler
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