Who Watches the Golden Goose?

For nearly five years, Pennsylvania has held off on passing any comprehensive legislation dealing with Marcellus Shale natural gas drilling. Because of the controversial nature of the topic and the diversity and complexity of many of the issues surrounding Marcellus Shale, conventional wisdom was that we would address everything at once.

This comprehensive approach would presumably include several key provisions, including a financial component, either a severance tax or and some regulatory changes.

Last week, was passed out of the House Finance Committee in Harrisburg and could be heading for a floor vote beginning the week of November 14. The 127-page bill, which was moved out of the Republican-controlled committee by a party-line vote, has sparked outcry across the state for multiple reasons.

Instead of nitpicking all the nuances of the bill, I will focus on one major provision, which would be disastrous for Pennsylvanians if passed by the Legislature and signed into law by Gov. Tom Corbett.

The provision reads: “All local rules, regulation, code, agreement, resolution, ordinance or other local enactments that regulate oil and gas operation are hereby superseded and preempted.” In plain English, any oil and gas zoning regulation passed by a township or borough anywhere in Pennsylvania would immediately become null and void. Local governments would only have an advisory role when it comes to oil and gas operations, with little or no actual authority.

This is bad on many levels. Local governments are comprised of people actually living in the impacted areas; they see what is really happening in the community are best positioned to determine what if any reasonable regulations are necessary so long as they comply with the Oil and Gas Act.

More importantly, if you remove the ability to impose local ordinances, you remove any real semblance of local accountability. Why should a drilling company care what “the locals” have to say if there’s nothing they can do to them?

To be clear, I am not anti-drilling.

I see the value to our economy, and I have no problem with landowners making money off of leases. But just because something is profitable, it should not be considered unquestionable and unrestricted. The possibility of a reasonable balance does exist, but we have fallen into a trap where we are led to believe that every local ordinance is “unreasonable” and every local solicitor is “just out to make money."

It’s just not true.

The overwhelming majority of local government officials are pro-drilling; most of them are leaseholders themselves. The municipalities I represent have held numerous hearings and allowed every side to be heard, even when industry cheerleaders packed the meetings wearing company-branded hardhats and yelling curse words to cause unnecessary disruption.

It is not unreasonable to want to put some restrictions on a compressor station that will be there for more than 50 years, emitting carcinogens into the air. Under HB 1950, your local government would be unable to stop a compressor station from being built just about anywhere.

Should it really be easier to build a natural gas compressor station than it is to put an addition on your house? In the anti-government frenzy that has gripped our nation, have we also abandoned simple common sense?

The problem is that instead of having an actual conversation on narrowing down the issues, the approach by some leading gas industry players is to divide and conquer. They tell residents the local ordinance is unacceptable, and unless the local township officials give theindustry basically everything they want, they’ll leave town and none of the leaseholders will be paid.

It’s extortion, pure and simple. I’ve seen it with my own eyes on more than one occasion. Are we really supposed to believe a company will abandon hundreds of millions of dollars in profit because they have to comply with a local ordinance?

For all the complaints from industry leaders about how difficult certain ordinances using the conditional-use process would be, guess how many times conditional-use permits for drilling were denied in Mt. Pleasant, Cecil and South Fayette Townships combined?

That’s right—zero.

Instead of trying to go through the conditional-use process, the companies either sued or threatened to sue. Yet, they have been unable to explain how the exact same companies in neighboring municipalities use that “unacceptable” conditional-use process without any problems? I guess the “uniformity and consistency” talking point only applies when you’re not getting your way.

The overly simplified argument against any local regulation of the natural gas industry, no matter how reasonable or necessary, is that we don’t want to “kill the goose that lays the golden eggs."

It sounds catchy, but relies on a faulty assumption that any local control would kill the goose. Local governments don’t want to kill the goose—they just don’t want the goose going to the bathroom all over their lawn, and that’s exactly what will happen if HB 1950 becomes law.