First Democrat Enters Gov’s Race

The field of Democrats seeking to unseat Governor Tom Corbett may get crowded by 2014, but for today there’s only one.  John Hanger, a former Department of Environmental Protection (DEP) Secretary under Governor Ed Rendell, is touring the state to kick off his gubernatorial bid. 

Hanger wants to reverse education budget cuts and tax natural gas drillers.  “In September and October, for the first time in years, Pennsylvania’s unemployment rate went above the national rate,” Hanger pointed out during a stop at the state capitol.  “That’s an extraordinary thing because of the gas boom and the gas opportunity that we have here.” 

The Republican Party of Pennsylvania has already fired back, issuing a statement that reads: “…The Corbett record of responsibility and success is a stark contrast from the broken, bloated and unsustainable state government that tax-and-spend politicians like Ed Rendell and John Hanger helped to create…” 

October’s statewide unemployment rate stood at 8.1%.  While it’s above the national rate, data from the Department of Labor & Industry also show that Pennsylvania has added 105,700 private sector jobs since Corbett took office.    

A November Quinnipiac Poll finds that PA voters are somewhat divided on the job Governor Corbett is doing: 40% approve, 38% disapprove.

Checks Going Out Soon as Impact Fee Collects Over 200 Million

The state’s impact fee on Marcellus shale drillers has brought in more than 204 million dollars in its first year. The money has been divided up and checks will head out soon.

Nearly 15 hundred municipalities and 35 counties are sharing more than 100 million dollars from the impact fee. Those checks range from a low of $1.44that will be going to a borough in Allegheny County, to $500,000 each for 26 municipalities with more drilling activity. The impact fee law restricts how the money can be spent.

Another 72 million will be shared among all 67 counties through the Marcellus Legacy Fund.  Just over 25 million will help pay for oversight of the industry.  

Governor Tom Corbett says Act 13, in addition to imposing the impact fee, also enacted a new range of environmental and safety standards.  He says the fee will help cover the enforcement of those standards.

He says when the state was confronted with the challenges and opportunities of this emerging industry, the goal was to get things right.  He believes the total of $204 million dollars is a clear sign that they did.

Not Your Average Job Search Website

This new career tool, developed by the state Department of Labor and Industry, isn’t your average job search website.  PA Career Coach is designed to make sure Pennsylvanians are ready for the jobs that become available.  “First, it’s innovative.  Second, it’s common sense,” explains Governor Tom Corbett.  “We don’t always get that combination in state government… but we are working and striving hard to change that.”

Students, displaced workers and others who visit the new website will find out what jobs are in demand in their hometowns, what they can expect to earn and how to find specific training nearby.  Users can also link to current job postings. 

The new job search tool was announced at a news conference inside the Department of Labor and Industry building, where Governor Corbett said the state is growing new job markets like the Marcellus Shale.  “But what good is that growth if Pennsylvania workers don’t know how to break into those job markets?” he asked.  

PA Career Coach is bridging that gap.  Officials say it’s just part of a comprehensive job-matching initiative the Corbett administration will launch later this year. 

Department of Labor and Industry Secretary Julia Hearthway demonstrates the PA Career Coach website.

The statewide unemployment rate currently stands at 8.1%.  September’s numbers are scheduled to be released next week.

Marcellus Shale

Impact Fee Raises More than First Estimated

Most well drillers in the Marcellus Shale region have met the September 1st deadline for Pennsylvania’s new natural gas impact fee. The Pennsylvania Public Utility Commission has collected almost 198 million dollars from drillers, and estimates the final number will be closer to 206 million when remaining fees have been paid.

PUC Spokeswoman Jennifer Kocher says about 4% of drillers have not paid.  Most are smaller operations and some are disputing whether their production levels meet the threshold for the fee.  The final resolution of those disputes could affect the final amount collected.

The PUC hopes some drillers who have not paid may not have been fully aware of the deadlines for the new fee.  The commission is in the process of reminding them that the fee is due.

The legislature had projected 180 million in the first year of the fee.  60% of the money will be split among counties and municipalities hosting gas wells; the rest will be divided among state agencies that deal with drilling impacts.

Of the nearly 45-hundred wells that were affected by the impact fee, about 419 were vertical  and the rest horizontally drilled and subject to a higher fee.

Study: Shale Land Concentrated Among Few Landowners

Researchers at Penn State sought out public records in 11-counties that account for most of the state’s natural gas drilling, and they found that the majority of landowners have little voice in leasing decisions.

Overall, 13% of the land is owned by the state and 27% is owned by nonresidents.  That leaves 60% which is owned by county residents.  “But of that 60%, the majority of that is owned by the top 10% of landowners,” says Timothy Kelsey, professor of agricultural economics.  “So the majority of landowners in the counties collectively own a relatively small proportion of the land area in those counties.”

Nonresidents actually own more than half of the land in the key natural gas-producing counties of Lycoming, Sullivan and Tioga.  “The questions about what happens in that community – if it’s based simply on who’s going to lease and who’s not going to lease – the local residents have less voice than the people who don’t live in the community,” professor Kelsey tells Radio PA.

He says the data is important because it helps us to understand how loud of a voice local residents have in drilling decisions, and how broadly distributed royalty & lease dollars may be.

Pennsylvania’s recent Marcellus Shale impact law preempts local zoning authority over oil and gas wells in order to provide uniformity for the growing industry in the state; however Commonwealth Court recently struck down those provisions of the law.  The Corbett administration has already indicated it will appeal to the state Supreme Court.

Dry Weather Impacts Drilling in Parts of the Marcellus Shale Region

The dry weather is having an impact on some drilling operations in the Marcellus Shale region.   It’s affecting water withdrawals in the Susquehanna River Basin.

The number of withdrawal suspensions ebbs and flows with the water flow levels, but operations in 13 Pennsylvania counties have been affected.  Susan Obleski of the Susquehanna River Basin Commission says these water withdrawals have pass by flow restrictions. That means when a certain amount of water is not passing by the withdrawal points, the restrictions kick in.

Obleski says the pass by conditions are based on very conservative assumptions, so they tend to affect withdrawals long before any drought declarations are issued.

Most of the suspensions are related to hydrofracking operations for natural gas drilling but there are also some golf courses affected.   Not all withdrawals have the restrictions,  and those less than 100 thousand gallons a day that are not associated with natural gas development are not regulated by the commission.

Negotiators Agree to Budget Framework, Tax Credit

Governor Tom Corbett has repeatedly said that June 30th means something to him.  With Wednesday night’s announcement that he and top Republican lawmakers have agreed to a $27.656-billion dollar budget framework, it appears that Pennsylvania is on pace to meet a second consecutive budget deadline.

Neither Corbett nor the legislative leaders were willing to discuss the details, as rank-and-file lawmakers are still being briefed on the specifics and a few details are still being finalized.  However, $27.656-billion is the same spend number the state Senate used when it passed a budget bill in May.

One of the Senate’s top priorities at the time was the restoration of proposed 20% cuts to the State System of Higher Education and proposed 30% cuts to the three big state-related universities (Penn State, Pitt and Temple).  The planned restorations came with a promise from those universities to keep next year’s tuition increases below the Consumer Price Index.  Whether these restorations made it into the final deal has yet to be confirmed.

We do know that 40.3% of the budget is comprised of education spending and 38.9% is spent on social services.  So, any movement in the spending plan – either up or down – will likely come from those two categories.

In addition to the budget framework, negotiators have confirmed agreement on an ethane tax credit that’s designed to lure a massive new petrochemical plant to western Pennsylvania.  “We are investing I believe… in a new industrial revolution in Pennsylvania,” Governor Corbett said earlier on Wednesday.  “We are investing in the opportunity for thousands of Pennsylvanians to have a good job.”

The American Chemistry Council estimates 10,000 construction jobs, 400 direct plant jobs in 17,000 spinoff jobs in chemical and manufacturing industries if the proposed Shell Oil petrochemical plant comes to fruition in Pennsylvania.

While Corbett was joined at the capitol by a large & diverse group of tax credit supporters, critics are wary of giving taxpayer money away to big industry.  One of those critics is state Rep. Jesse White (D-Washington).  He’s already proposed an alternative that would fund the incentives through a surcharge on Pennsylvania’s natural gas wells.  “We should not be socializing costs while privatizing profits,” White said in a statement this week.