Washington County is no stranger to economic development, particularly when it comes to its natural resources. Coal mining in the county, for example, dates back to 1830. But the current natural gas play could create economic benefits on a scale only seen once in a century. Couple this new development with our existing energy industry and it is no wonder some have dubbed Washington County the “Energy Capital of the East.”
But with opportunity come challenges, including the need to ensure our air, land and water are adequately protected; our municipalities are not overwhelmed by the scale and pace of development; and individual opportunities as well as concerns are acknowledged and addressed in a reasonable way.
Earlier this year, the Pennsylvania Legislature passed Act 13, revising the Oil and Gas Act of 1984. Not surprisingly, in Washington County (where we still celebrate our Whiskey Rebellion) the Act has generated lots of discussion, both pro and con. Some municipalities have even filed a lawsuit to invalidate the pre-emption provisions.
But before I go any further, let me state that the Washington County Chamber of Commerce supports the responsible development of our natural gas resources. The economic and job benefits to the county are already manifest and in our view, Act 13 provides an appropriate framework for those benefits to continue while addressing the understandable concerns some have expressed.
For example, the act strengthens existing regulations on permitting, well site locations and protection of water supplies. While some argue that the act should have gone further, there is no doubt it significantly enhanced existing protections.
In Washington County, the most controversial part of the act was pre-emption of local regulation of oil and gas development. Local officials understandably want to retain their control of regulation, but this provision is appropriate and proper. First, as all local municipalities are created by the state, pre-emption of local law is not new. Second, consistent state-wide regulation not only ensures economic development of the resource, but is a more holistic approach to protecting environmental resources, which usually cross municipal boundaries.
There are other positive aspects to the act, especially the allowance of an impact fee imposed on wells drilled. Here 60 percent of the impact fees go to counties and municipalities where the drilling actually takes place – not like the usual state approach where most of the money ends up in the state’s General Fund and then goes to Philadelphia or Pittsburgh (where the latter does not even welcome the industry). While somewhat circumscribed, there are numerous uses, ranging from infrastructure investment to tax reduction, allowed by Act 13.
To make the most of the legislation, our local municipal leaders must choose carefully how they use this source of revenue from the impact fees. New municipal equipment or new borough buildings may make sense for communities without them, but we believe the revenue from the impact fees should be directed into long-term infrastructure improvements such as road and bridge repair, storm drain upgrades and water and sewage development. If our local municipalities want to take advantage of this new industry, attract new residents and new businesses, they must invest these new impact fees in improving infrastructure. If they do not, communities cannot take advantage of any economic opportunities, whatever their source.
On the whole, Act 13 is an important step forward. It allows development, but under rules that protect environmental values and provide significant new revenues to areas where development occurs.
By all means, let us continue to discuss how to best regulate this development, but let us also not let this once in lifetime opportunity pass us by.
Jeffrey Kotula is president of the Washington County Chamber of Commerce.