HB 965: The latest attack on environmental protection.

It's typically easy to tell if a piece of legislation is aimed at helping polluters, no matter how hard policymakers try to hide it. Take the General Assembly's recent effort to eliminate new environmental regulations on conventional oil and gas. While the language was buried in a little read bill, it's intent was plain as day.

For the General Assembly's next attack on the environment, they're trying a new tactic - bury their intent in regulatory legalese. In April, the Senate took up a non-controversial bill (Senate Bill 562) that its legislative sponsor, Senator Gordner (R-Bloomsburg), argued would provide the General Assembly more time to study and assess new regulations making their way through the independent review process. The bill quickly passed unanimously, with little debate, and no media fanfare.

The House then took up a similar bill (House Bill 965) and its sponsor, Rep. Godshall (R-Montgomery), made the same legislative oversight argument Sen. Gordner made about his bill. But with many fundamentally important environmental regulations working through the review process such as the Clean Power Plan, new oil and gas rules, and methane leakage regulations, PennFuture and other organizations took a closer look at the bill language and found something troubling.

The legislation is essentially a Trojan horse. It does include language that would give the General Assembly a defined amount of time to review new regulations before it makes it to the final independent review steps, which already include review by legislators. But it also grants new power to the standing committees of the legislature to delay - potentially indefinitely - any regulation they don't like. It also blocks state agencies from publicly posting their regulatory intent and goals in the Pennsylvania Bulletin. In other words, House Bill 965 and Senate Bill 562, in a convoluted way, aim to provide the legislature constitutionally debatable veto power over new regulations while greatly limiting public transparency.

To put it bluntly, this legislation puts not just environmental rules in jeopardy, but any regulatory matter in limbo.

Once the true intent of the legislation was made apparent, a real debate on the bill ensued in the House. Last week, after contentious debate, House Bill 965 passed 113-84, with all but one Democratic member and five Republican members voting against it. Because there were differences between the House and Senate versions, the Senate has now taken up House Bill 965 in an attempt to quickly pass it before it adjourns for the remainder of the year.

It's critical that this bill fail to make it into law as it imperils many major environmental efforts to clean the Commonwealth's air, land, and waters for present and future generations.

Matt Stepp is policy director for PennFuture and is based in Philadelphia. He tweets @MatthewStepp.

Key questions for evaluating severance tax legislation

Pennsylvania lawmakers are in the third week of a budget stalemate that even the most optimistic political observers saw from miles away. I cannot overstate how important these budget negotiations are to the environment. In addition to funding state environmental protection agencies, the budget negotiations include debate on levying a severance tax on natural gas drilling and using part of that revenue to invest in Pennsylvania's clean energy economy as well as enforcing environmental regulations.

So far, the severance tax has been a moving target in the budget debate. Negotiations have ranged from haggling over the details to outright hostility. Legislative leaders such as Rep. Mike Turzai (R-Allegheny) have been particularly outspoken and largely refuse to negotiate with Gov. Tom Wolf on any aspect of the tax. Other leaders, such as Sen. Jake Corman (R-Centre), are more open to negotiating.

Negotiations are expected to continue at least for another couple of weeks, if not longer. But as the negotiations drag on though, there are some key questions to keep in mind when evaluating any potential piece of severance tax legislation:

1. Where is the revenue going? The most important part of any severance tax proposal is how the revenue is invested. PennFuture has strongly advocated that part of the revenue must go to re-starting key clean energy programs as well as beefing up enforcement of environmental regulations. In both cases, budget cuts have severely depleted these programs at a staggering cost to the environment. Their inclusion in any severance tax legislation is crucial.
2. What about the Impact Fee? In 2012, policymakers implemented a "Impact Fee" on natural gas drillers that effectively taxes the industry at the lowest rate of any state with gas drilling. The majority of the revenue from the fee is returned to local municipalities impacted by drilling to rebuild their infrastructure. As a result, the Impact Fee is very popular among drilling counties, making whether the Fee remains or is eliminated due to levying a severance tax a key negotiation sticking point.
3. What about the price floor? Gov. Wolf's severance tax proposal includes a "price floor" of $2.97/mcf, meaning that natural gas drillers would be taxed at $2.97/mcf even if the price of gas falls below this level. In theory, the price floor protects state revenue from possible fluctuations in the price of gas as well as guaranteeing a minimum level of revenue. Currently, natural gas prices in Pennsylvania are lower than the price floor, but are expected to rise as pipeline projects are completed. Nonetheless, the natural gas industry still decries the price floor.
4. What about policy riders? During the course of crafting legislation, the General Assembly has a funny habit of sneaking in provisions in larger bills it knows it can't pass on its own. Their hope is no one notices. Any potential severance tax deal will offer an opportunity to do the same and we've already seen legislative leaders attempt to eliminate new oil and gas regulations by slipping a provision in the Fiscal Code bill. It's entirely possible a similar situation could happen again, potentially reducing the overall benefit of the deal.

Ultimately, the severance tax is crucial environmental policy - if not the most important piece of environmental policy to be enacted in 2015. It's vital we get it right.

Matthew Stepp is director of policy for PennFuture and works out of our Philadelphia and Harrisburg offices. He tweets @MatthewStepp.

State legislative leaders include secret deal to stop oil and gas rules

The Pennsylvania State Legislature’s leadership and the oil and gas drilling industry are attempting a secretive strategy to stop much needed regulations on oil and gas drilling.

When they thought no one was watching, House and Senate leaders amended a little known budget bill called the Fiscal Code (S.B. 655) with a provision that would halt new regulations on conventional oil and gas drilling. The House passed the bill over the weekend and the Senate followed on Tuesday.

Starting on Page 29, Line 20 of S.B. 655 the provision states, among other text:

The [Environmental Quality] Board may not adopt or promulgate: 

(i) a revision of 25 pa. Code ch. 78 (relating to oil and gas wells) applicable to the operation of conventional oil and gas wells which was formulated or proposed in any form prior to the effective date of this subsection; or 

(ii) a regulation applicable to the operation of conventional oil and gas wells which was formulated or proposed in any form prior to the effective date of this subsection.

In 2012, the State Legislature and Gov. Tom Corbett passed Act 13, which promulgates environmental regulations on conventional and unconventional oil and gas operations. The Fiscal Code provision would roll back a significant portion of these regulations and the Department of Environmental Protection (DEP) would have to discard years of work, public debate, and citizen comment. In other words, DEP would start over again and allow drillers to continue polluting your drinking water and the air your kids breathe, without proper oversight, for years to come.

Unfortunately, this is the latest chapter in the oil and gas industry playbook. They’ve tried unsuccessfully to stifle public comment during the development of these regulations. They still argue that they should voluntarily regulate themselves, yet they’re regularly fined for, among other things, polluting our waterways. And a stated industry goal is to try and delay implementation of Chapter 78 regulations until early 2016 when the clock would run out and DEP is required to start over.

To say this is undemocratic, anti-environmental, and anti-Pennsylvanian is an understatement. A significant policy change, such as halting Chapter 78 oil and gas standards, should be made out in the open and with public debate, not hatched as a back-room deal via the state budget.

It’s critical this provision is not included in the final budget negotiations between the legislature and Gov. Wolf, especially if Pennsylvania wants to economically benefit from oil and gas drilling without harming human and environmental health. Tell your elected official that this cannot stand.

Matthew Stepp is director of policy for PennFuture and works out of our Philadelphia and Harrisburg offices. He tweets @MatthewStepp.