Regulation

One of the unintended consequences of the recent PA Supreme Court ruling that struck down zoning provisions in PA’s Act 13 law is to weaken environmental protections–specially the distance away from rivers, streams, wells and other bodies of water that drillers sink a well. Act 13 provided for a minimum 300 foot “setback” from water sources, but that’s now out the window after the Court’s decision (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). PA Gov. Tom Corbett yesterday issued a call/challenge/request/plea to the drilling industry to maintain the setback standard in their drilling practices. The industry, via various representative organizations like the Marcellus Shale Coalition, has already responded that indeed they will continue to honor the setback provisions–even though the high court tossed them out. Which is just more evidence of responsible people working together responsibly to safely drill for natural gas and oil in PA. Even when the courts screw it up.

Here’s Gov. Corbett’s request, and the response by the drilling industry:
Read More “Gov Corbett Requests Drillers Continue to Honor Act 13 Setbacks”

The decision of the PA Supreme Court to invalidate large portions of the 2012 Act 13 Marcellus drilling law, particularly those portions dealing with zoning, have left much of the law–perhaps the entire law–in doubt. The court’s decision was like an explosion, and we’re just now seeing the mushroom cloud but haven’t felt the fallout just yet. Did the Supremes just destroy shale drilling in PA? Is their decision really no big deal? It all depends on whom you ask.

One thing that appears to be in jeopardy is the impact fee/tax that’s already raised over $400 million in the last two years. A lot of that fee gets distributed to the places impacted by drilling, hence its name. It’s a sensible fee notwithstanding our objection that 40% of it goes to politicians to spend in non-drilling parts of the state. However, high court’s decision throws the future of the impact fee into doubt. Last week Gov. Tom Corbett’s administration asked the Supreme Court to reconsider its decision and further clarify some issues in hopes the impact fee (among other things) can be retained…
Read More “PA’s Impact Fee in Jeopardy from Supreme Court’s Act 13 Decision”

Elections–and court cases–have consequences. You tax something more, you get less of it. You regulate something more, you get less of it. When there’s less of something, prices for it go up. Fitch Ratings–one of the largest and most prestigious rating agencies in the world–has just weighed in on the ruling by the PA Supreme Court that throws out portions of the Act 13 drilling law (see PA Supreme Court Rules Against State/Drillers in Act 13 Case). According to Fitch, more local regulation of PA’s oil and gas drilling will result in less production. You don’t normally think of Fitch as being in the oil and gas production prediction game–that’s more the purview of the Energy Information Administration (EIA). However, Fitch says the recent PA ruling will almost certainly mean less production coming out of PA–a sobering observation.

Fitch’s opinion counts because investors make decisions based on it. Less gas, higher prices. It also means less tax money will flow to municipalities. Pretty simple economics and Fitch is just stating the obvious. Here’s what Fitch said earlier this week about the PA court decision…
Read More “Fitch Ratings Says PA Court Decision Translates to Less Production”