Rendell Halts Natural Gas Drilling

Gov. Ed Rendell has carried out an executive order placing 1.5 million acres of state forest land off-limits for natural gas drilling, getting praise from environmental groups but sharp criticism from Senate Republican leader Joe Scarnati.

Brickbats were flying Tuesday between Democrat Rendell and Republican Scarnati over the moratorium order, which bans any more drilling pads from being located in state forests, other than on the 700,000 acres of forest land already designated for gas drilling by the Department of Conservation and Natural Resources.

Penn Future's leader Jan Jarrrett and Sierra Club Director Jeff Schmidt applauded the decision.

"More [drilling] leases would fragment the habitat and destroy the very essence of the forests, along with our valuable outdoor tourism industry that attracts hunters and anglers from across the nation," Ms. Jarrett said.

The leasing moratorium resulted in part from an ongoing feud between Democrats and Republicans over the failure to enact a severance tax on natural gas pumped from underground Marcellus Shale, much of which lies deep below state forests.

Mr. Rendell blamed the GOP-led Senate for "failing to negotiate in good faith" to enact a tax compromise. He said legislators had "broken a promise to the people" to enact such a tax this session, with much of the revenue to be used to protect the environment. The Legislature has now gone home, and the Senate says it won't be back after Tuesday's election.

Mr. Scarnati rejected the Rendell criticism, saying the Senate has always been willing to pass a reasonable extraction tax on shale gas. But he claimed the high tax rate that Mr. Rendell and House Democrats want will hurt the industry just as it begins to bring hundreds of new jobs to Pennsylvania.

"I understand he likes headlines, but in six days he won't get any more headlines," said Mr. Scarnati, who is also the lieutenant governor, referring to the fact that a new governor will be elected next Tuesday.

"This isn't Philadelphia -- he wasn't elected dictator or king," Mr. Scarnati said, adding that the Senate is "an equal branch of government. We will take a look at the language of his directive and see if it's within his executive authority. If not, we may file suit."

Mr. Rendell insisted he has the authority to impose the drilling moratorium in order to protect valuable state forests. "If he wants to sue, let him sue, but he can't win," the governor said.

Mr. Rendell called on the two candidates for governor, Republican Tom Corbett and Democrat Dan Onorato, to continue the no-new-drilling moratorium once one of them takes office in January.

Onorato spokesman Brian Herman agreed, saying, "Dan has long supported a moratorium on drilling leases in state forests because he believes that we should develop the industry and create jobs and that there is enough privately owned land to make that happen."

But Corbett spokesman Kevin Harley flatly refused, saying, "Mr. Corbett will rescind this order when he becomes governor. This is typical of Ed Rendell. A severance tax will be passed on to consumers through higher gas prices. He wants to increase citizens' energy bills when the state is already getting lease and royalty payments" by leasing forest land to companies for drilling.

A group representing smaller gas producers, the Independent Oil and Gas Association, also assailed Mr. Rendell's move placing forests off-limits for drilling, claiming he had "put political expediency above level-headed policymaking with this short-sighted moratorium. It ignores the real financial benefit being realized by the state from both lease and royalty payments."

Mr. Rendell said he has already compromised on his original gas tax proposal, while the Senate has refused to budge. His original tax plan, based on a shale gas tax in West Virginia, would have raised $249 million in its first year, he said Tuesday.

By contrast, a plan passed by the Democratic House would have generated $304 million the first year, but he said a lower tax rate proposed by the Senate GOP would produce only $63 million the first year. He called that amount "a giveaway to the gas industry."

Mr. Rendell said that a new compromise plan, with an initial 3 percent tax on extracted gas, would generate $134 million in the first year, less of a burden on gas producers than his original plan. Senate Republicans said their plan, a 1.5 percent a year tax initially, later rising to 5 percent a year, would produce $100 million in revenue by the second or third years.

Besides issuing the moratorium, Mr. Rendell on Tuesday also called on the Senate to return to session Nov. 8 -- the same day the House plans to return -- to resume talks on a severance tax, so a deal can be worked out before the end of session Nov. 30.

"We are appalled that the Senate failed to pass a natural gas severance tax, a state forest protection bill or other Marcellus gas-related legislation before adjourning," said the Sierra Club's Mr. Schmidt.

And a new wrinkle was added to the Marcellus dispute, as five Republican senators -- all from the southeast, where enactment of a severance tax is popular with voters -- asked their leaders to resume four-caucus talks on a tax. They said they hope "that a severance tax can be enacted before the end of the legislative session."

But Mr. Scarnati said that for months the Senate has planned not to return for the three-week "lame duck" session in November. He said one of the legislative reforms put into place several years ago was to prevent senators who are lame ducks, meaning they are leaving office, from enacting new taxes. Mr. Rendell said that reform is a worthy goal but there should be some exceptions and action of a severance tax is one of them. 

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