2011-08-11 / Local & State

Corbett Suggests Drilling Fee Could Plug Old Wells

HARRISBURG, Pa. (AP) – Gov. Tom Corbett says it would make sense to use some money from any stateimposed fee on Marcellus Shale natural gas drilling to plug older abandoned wells.

Corbett told the Pittsburgh Tribune- Review ( http:// bit. ly/ r4Tldq) on Thursday that the uncapped wells are an environmental hazard, but he also said that any money from a fee should mainly reimburse municipalities for the damage caused by drilling new wells.

Pennsylvania is the nation’s largest natural-gas producing state that doesn’t tax the activity.

Corbett has said he opposes a tax, which he views as different from a fee. But he has made no formal proposal to impose a levy on Pennsylvania’s booming natural gas industry.

The state Department of Environmental Protection has said about 325,000 oil and gas wells have been drilled in Pennsylvania since 1859, and the agency has no records on more than half of those. In its report last month, Corbett’s Marcellus Shale Advisory Commission recommended that the department develop a permit so that drilling companies can adopt an orphaned or abandoned well.

The commission recommended the imposition of a fee on drilling companies to compensate governments for the cost to regulate them, as well as for any damage they cause to roads and the environment. But the advisory group did not suggest how much companies should pay and Corbett also barred the commission from considering a tax.

The commission said the fee should be accompanied by a prohibition on municipal regulations that could “unreasonably impede the development of natural gas.’’

Clear majorities in the state Legislature are in favor of some type of fee or tax, and more than a dozen bills are pending. But Corbett hasn’t said which of them, if any, he supports. He threatened to veto any bills that passed before his commission delivered a report to him.

Years ago, the state allowed counties, schools and municipalities to impose a real estate tax based on the value of the subsurface oil and gas rights held by exploration companies. A 2002 state Supreme Court ruling stopped that practice, saying it was not allowed under state law.

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