Senate jams shale tax, industry permits into unhappy package

HARRISBURG » For years, environmental advocates have sought a tax on Pennsylvania’s Marcellus Shale natural gas production while business associations have sought speedier state approval of permits for the activities of polluting industries.

Now, legislation approved by the Republicancontrolled state Senate gave both provisions an unexpected and unwelcome passenger: each other.

The lightning-strike compromise package was quietly negotiated for several weeks in the Senate before becoming public July 26 as lawmakers worked to break a stalemate over balancing a gaping hole in the state’s deficit-riddled budget. Within hours, senators passed it 26-24.

It has an uncertain future in the House of Representatives and, should it become law, faces a likely lawsuit from environmental groups over what they see as multiple transgressions of the state constitution in the bill’s changes to permitting procedures. For their part, business groups feel their members shouldn’t have to absorb a tax for something they believe they have a right to expect: efficient consideration of a permit application.

For Republican lawmakers who for years have resisted calls for a tax on the nation’s No. 1 natural gas reservoir, the package offered relief to industries complaining about long wait times to get a permit to start work. For Democratic Gov. Tom Wolf, as well as many senators, it offered the fulfillment of a campaign promise to impose a tax supported by most Pennsylvanians.

Wolf signed off on the compromise, but his administration also said the governor, who ran for office in 2014 with the backing of many environmental groups, thinks there are better ways to fix permitting problems.

The bill carried three specific permitting provisions.

One would require the Department of Environmental Protection to contract with outside professionals to handle applications for any kind of permit.

Another would force the department to approve or deny a permit application within a time frame already set by law, an effort to stop reviewers from re-starting the clock when they kick back permits to request additional information.

The third would create a panel with veto power over a new permit being written by the department to impose limits on methane emissions at natural gas well and transmission sites.

Environmental groups, as well as two former Department of Environmental Protection secretaries, David Hess and John Quigley, portray the provisions in stark terms. Quigley views the panel of political appointees as intended to stop the strategy to reduce methane emissions that he launched last year. Some environmentalists call the panel an unconstitutional delegation of executive authority.

Meanwhile, the bill lacks provisions to guarantee the outside professionals are appropriately experienced, free from conflicts of interest and required to abide by the department’s procedural guidelines, Hess said. Some also see it as unconstitutional.

“The thought that environmental protections could be bartered away by the Senate and Wolf is outrageous,” said Joseph Minott, executive director of the Clean Air Council.

David Masur, executive director of PennEnvironment, said the permitting package “seems like a larger effort to cut the knees out from DEP” after lawmakers and governors have spent years hobbling the agency with budget cuts to the point that the federal government is threatening to revoke the department’s power to enforce federal anti-pollution laws.

Business groups roundly say there is a profound need for faster permits: long and uncertain wait times play havoc with a business’ ability to keep its crews, equipment and money available. That hurts the economy, they say.

Many, however, were skeptical that the bill’s permitting provisions would actually achieve the desired effect. For instance, the requirement to approve or deny the permit within a set time frame could simply result in more rejections, or get struck down in court, said Kevin Sunday, of the Pennsylvania Chamber of Business and Industry.

One pointed a finger at Wolf and lawmakers, noting they approved yet another budget cut to the DEP.

“So tell me how they’re supposed to get their permits through on an expedited basis if they have less money and less staff?” questioned Dan Weaver, president of the Pennsylvania Independent Oil and Gas Association. “And here they go and cut their budget further. Doesn’t that exacerbate the problem?”