The consideration of two competing bills making their way through the Pennsylvania General Assembly that establish some fees for Marcellus Shale drillers may conclude with the phrase, "something is better than nothing."
The House bill, which virtually mirrors Gov. Tom Corbett's suggestion a couple months ago would allow municipalities to levy fees totalling $160,000 per well over ten years to cover environmental and infrastructure repairs relating to the drilling. Senate Pro Tem Joe Scarnati's bill would provide fees of $360,000 over 20 years for basically the same thing.
In both instances, what the General Assembly is considering is really where to set the cap for Marcellus fees, while punting the actual enactment of the fees to local governments.
Neither bill comes close to the severance taxes paid by drillers in other major producing states. The severance tax in Alaska, for instance, amounts to about 18 percent. The Scarnati fee would amount to about 3 percent of production on an average well.
None of the revenue from either bill would be used toward things like education, public health or transportation.
It is apparent that there will be no third choice, despite the lamentations of the minority party contingents in both houses.
If you think it's odd that drillers aren't screaming that the proposed fees are onerous, it's because they are anything but. In fact, compared to the other states where most of the Marcellus drillers have done business before, these are a gift.
Still, something is better than nothing, and nothing is what we have now.