April 26, 2010 The Honorable Greg Vitali Pennsylvania House of Representatives 103B East Wing Capitol Building Harrisburg

, PA 17120 RE: HB2235 Dear Representative Vitali: I am writing to express concern with your legislation, HB2253, which would place a five-year moratorium on natural gas drilling in state lands. Unfortunately, there is little merit to your efforts to stymie the development of this clean energy source in Pennsylvania for environmental concerns. As you know, the Commonwealth has been leasing state land for gas and oil exploration for 63 years, with over 1,600 wells already in place and no unremediated contamination. Hydraulic fracturing has been in use for over 60 years. During that time, many studies have looked at the environmental impact and found little evidence to suggest responsibly run operations are a hazard to the environment. The Environmental Protection Agency (EPA), Ground Water Protection Council (GWPC), and the Interstate Oil and Gas Compact Commission (IOGCC) have all found hydraulic fracturing non-threatening to the environment or public health. And when there are irresponsible enterprises, they should be held fully accountable. I know you are also aware that the Department of Conservation and Natural Resources (DCNR) has extensive requirements for all Marcellus Shale exploration, including zones where no surface impact or drilling may occur, stringent requirements for well locations, spacing, construction and buffer zones. These, of course, are in addition to state and federal Department of Environmental Protection¨s regulations. It sure seems that our state lands are remarkably safeguarded against any potential harm from natural gas drilling. While there may be some legitimate concerns over which state lands are appropriate for leasing, your argument that the decision to lease not be driven by politics, or by revenue demands, should also apply to any proposed tax. Yet politics and the desire for more tax money is precisely what is driving the severance tax. Indeed, the severance tax Gov. Rendell proposed has little to do with environmental concerns, as 90% of the proposed tax would go to General Fund spending. This means, only 10% of the severance tax would be dedicated to the purposes for which you argue against leasing and for higher taxation.

225 State Street, Suite 302 | Harrisburg, PA 17101 | 717.671.1901 phone | 717.671.1905 fax | CommonwealthFoundation.org

A Penn State University study found Marcellus Shale development contributed $240 million in state and local taxes and added 29,000 jobs to the Commonwealth in 2008. The study also estimates the industry could contribute $12 billion in local and state revenue by 2020, if the additional severance tax is not applied. Of course, these job creators are already paying every other onerous business tax Harrisburg has devised. Adding another will only make our Commonwealth even less competitive for these jobs. The reality is that Marcellus Shale exploration is tightly-regulated in Pennsylvania, and companies are legally held responsible for environmental damages in our communities or on state lands. They are also legally required to repair and rebuild any damages to our transportation infrastructure. Instead of erecting more barriers for job creators in Pennsylvania, we want to encourage you and your colleagues to reconsider your wellintentioned but misguided efforts to thwart the extraction of natural gas from the Marcellus Shale in our Commonwealth.


Katrina M. Currie Energy/Environment Research Associate

225 State Street, Suite 302 | Harrisburg, PA 17101 | 717.671.1901 phone | 717.671.1905 fax | CommonwealthFoundation.org

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