Drilling region communities struggle to protect environment, groundwater

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• New poll shows 8 of 10 Pennsylvanians support gas extraction tax

WELLSBORO, PA, Aug. 27, 2010 -- Communities in the heart of the booming Marcellus Shale drilling region are struggling to protect the environment and groundwater supplies while facing growing social service needs, Governor Edward G. Rendell said today when he visited Tioga County.

"The Marcellus Shale gas industry is just getting started in Pennsylvania, so we have the opportunity now to ensure that adequate resources are available for local and state government to meeting growing demand for services and protect the environment," the Governor said. "To accomplish these goals, the gas companies profiting from this rapidly growing industry should be willing to pay a fair share levy."

"I share the view of the eight out of 10 Pennsylvanians who, in a recent poll, said that they favor a tax on gas companies to fund programs that will protect our environment and help local governments handled increased demand on their services," Governor Rendell said.

Pennsylvania is the only major energy-producing state that does not levy a tax on natural gas extraction.

"To some extent, the drilling industry has helped Tioga County weather the recession better than most," the Governor said, noting that the county unemployment rate dropped more than one percent to 9.1 percent in the past year. "That's still too high, but it is headed in the right direction and is now below the statewide average.

"But these jobs and economic activity are definitely coming with a cost. Heavy truck traffic is putting pressure on local roads and bridges, leading to weight restrictions being imposed on three bridges in the past four months."

Of the 1,722 miles of roads covered by bonds posted by Marcellus Shale drillers statewide, 1,067 have been damaged. More than 500 miles of roads in PennDOT's District 3, which includes Tioga and Bradford counties, have been damaged by drilling vehicles.

Earlier this year, Governor Rendell proposed implementing a severance tax on natural gas extraction that would be modeled after West Virginia's levy -- straight 5-percent on sales, plus an additional 4.7 cents for each thousand cubic feet of gas produced.

As part of the state budget deal reached in July, the General Assembly agreed to enact a severance tax by Oct. 1.

"Pennsylvania is the 15th largest natural gas production state, but is the only major fossil fuel producer that does not levy a tax on natural gas extraction," Governor Rendell told the crowd. "That's just not fair. With your help, we are going to change that."

To date this year, 1,765 natural gas wells have been drilled in Pennsylvania. Of that total, 848 have been drilled to access gas deposits in the Marcellus Shale, with 171 of those wells being drilled in Tioga County.

The Department of Environmental Protection has also issued nearly 4,195 drilling permits this year, of which 1,915 were for Marcellus development. The department is on track to issue approximately 2,700 Marcellus permits this year -- a 36-percent increase over permits issued in 2009.

For more information about natural gas drilling in Pennsylvania, visit www.depweb.state.pa.us.

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