Meadville Tribune

February 10, 2014

Corbett budget counts on tapping gas dollars

By John Finnerty
CNHI News Service

— Gov. Tom Corbett hopes to balance his budget with what Democrats dismiss as one-time gimmicks. Raising $75 million by lifting a moratorium on gas drilling in state forests is among the most controversial.

The practicality of that number isn’t exactly clear.

The state has not yet analyzed how much forest land might be suitable for drilling, said Christina Novak, a spokeswoman for the Department of Conservation and Natural Resources. The proposed $75 million is based on an estimate generated by gas companies, she said.

The state owns 1.5 million acres of forest in the Marcellus region. About half is already leased, Novak said, or the drilling rights are privately held. That leaves about 750,000 acres of forest available.

Nels Johnson, director of conservation programs for the Nature Conservancy’s Pennsylvania office, said the state got $3,000 per acre the last time it leased forest land. So, coming up with $75 million seems straightforward enough; the state just needs to lease about 25,000 acres.

That may not be as easy as it sounds.

The money would come from “non-surface impact” leases given to drilling companies.

What constitutes a surface impact?

That’s what environmentalists are waiting to learn. Corbett administration officials suggest that the new leases will principally involve forestland that is accessible by fracking from wells drilled on neighboring land.

Johnson at the Nature Conservancy explained that even without disturbing the surface by drilling a new well, the new activity could involve dust, light and noise that frighten wildlife or that otherwise alter the landscape. Polluted water does not pay attention to property lines, either.

All of these are surface issues — things to consider before any forestland fracking begins.

Johnson noted another complication: The state’s un-leased land also happens to include the most precious holdings in the forest system.

Researchers with the Pennsylvania Forest Coalition produced maps that are frightening and, frankly, completely baffling to someone who is not versed in the distinctions between primitive forest and ecologically sensitive areas. But their conclusions are clear enough. Of 97,500 acres of state forest that could conceivably be appropriate for drilling, absolutely none is suitable for surface drilling activities. How much will be appropriate for the type of activity envisioned by Corbett and the gas companies is unclear.

Coming up with $75 million from drilling isn’t the only part of Corbett’s budget giving environmentalists heartburn. He also proposes to quietly raid the oil and gas fund — the state’s money from rent and royalties paid by drilling companies — to pay the bills of the Department of Conservation and Natural Resources.

Joanne Kilgour, director of the Sierra Club’s Pennsylvania chapter, says using gas dollars that way creates a conflict of interest. The industry would be paying the bills of an agency responsible for making sure it doesn’t harm the environment.

The gas money ought to be put directly toward conservation activities, environmentalists argue, such as acquiring state land or improving facilities on state-owned property. The fund is projected to get $186 million in the coming year. That includes $110 million in rent and royalties, as well as the $75 million from allowing gas companies to frack under the forest.

Corbett would divide the fund by passing the new $75 million directly into the general fund. Another $50 million would go to the Department of Conservation and National Resources; $41 million would go toward state park operations; and $26 million would go to run the state forests. Corbett is draining the fund so completely, the state will spend all that goes into the fund this year and erase half a cash balance it had to start the year.

Novak said the funding strategy is legal, though that’s not really saying much. Strictly speaking, the state budget is enacted as a law, and anything the Legislature does is legal, absent a court challenge to overturn it.

Corbett’s designs on the oil and gas fund wouldn’t be the biggest raid in history. That came in 2010 when the General Assembly siphoned off $180 million for the general fund — a move that completely ignored the idea that the dollars ought to be focused on conservation.

The Corbett administration maintains that using part of the money to run the Department of Conservation and Natural Resources, at a minimum, is better than what happened four years ago.

At the same time, the state is proposing to use $150 million, mostly from other accounts, for improvements to state parks and forests. Projects include fixing a dam at the Pymatuning State Park in Crawford County and completing a visitors center at Ohiopyle State Park in Fayette County.

The state will add 20,000 acres to its forest holdings and spruce up campgrounds, including those at Prince Gallitzin State Park in Cambria County.

The state could do twice as much, environmentalists argue, if it spent the oil and gas fund as intended. In a memo to other lawmakers, Rep. Greg Vitali, D-Delaware County, noted a $1 billion backlog in work needed to repair and improve state parks and forests.

With that type of need unmet, environmental watchdogs like Kilgour say the state needs to come up with a long-term strategy for spending the oil and gas money, instead of using it to plug holes in the budget.

If the budget depends on increasing drilling activities on state lands and dipping into conservation funds, Kilgour said, “It’s going to have an impact far beyond this fiscal year.”

John Finnerty reports from the CNHI Harrisburg Bureau for The Meadville Tribune and other Pennsylvania newspapers owned by Community Newspaper Holdings Inc. Email him at jfinnerty@cnhi.com and follow him on Twitter @cnhipa.