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Budget: DCNR To Constantly Reevaluate Need For Staff To Oversee Marcellus Shale Drilling

Cindy Dunn, Acting Secretary of the Department of Conservation and Natural Resources, told the Senate Appropriations Committee this week DCNR takes seriously its stewardship responsibility over State Forest and State Park lands and said they have an obligation to constantly reevaluate the need for staff to oversee Marcellus Shale natural gas development on these lands.

           Dunn also said again the proposed budget does not anticipate leasing additional State Forest land for Marcellus Shale drilling in FY 2011-12.
            Testimony: Copy Of Written Testimony (same as House)
             Here's a quick summary of issues raised during the hearing:

Marcellus Shale Wells On State Forest Lands: In response to a question from Sen. Mary Jo White (R-Venango), Majority Chair of the Senate Environmental Resources and Energy Committee,  Dan Devlin, Director of the Bureau of Forestry, said as of March 1 there have been 575 Marcellus well locations approved, 482 have DEP permits, 164 are drilled, 61 are producing and DCNR received about $16 million from 47 wells for a total of $26 million for this fiscal year and $63 million in FY 2011-12.
            Dan Devlin, Director of the Bureau of Forestry, said about half the activity is on State Forest lands where DCNR owns the mineral rights and half are on lands where DCNR does not own the rights.  He said he has been pleased with the cooperation of the drilling companies in developing these rights.
            Dunn said the royalties from these operations are now being used for their intended purposes to support recreation and conservation projects and operations through the Oil and Gas Lease Fund.  Sen. White commented "at present."

Review Of Marcellus Well Permits On State Lands: In response to a question from Sen. John Yudichak, Minority Chair of the Senate Environmental Resources and Energy Committee, on the recent revocation of a DEP-DCNR well permit review process, Dunn said there is a process in place to review the impacts of well development under Section 205(c) Oil and Gas Act.  In the field, through the robust leases used by DCNR to control drilling on State Forest land, drilling companies do work with DEP and DCNR on impacts as wells are being developed on existing leases.

Drilling In State Parks: In response to questions, Dunn said it is the agency's policy not to allow Marcellus Shale drilling in the State Parks where DCNR owns the mineral rights, however, the agency does not own the mineral rights of 80 percent of State Park lands of which two-thirds of that area are in the Marcellus Shale play.
            John Norbeck, Director of the Bureau of State Parks, said they have interest expressed in drilling in two State Parks where DCNR does not own the mineral rights-- Ohiopyle State Park, and in just the last few days, Yellow Creek State Park.
            In the case of Ohiopyle, Norbeck said they have met with the drilling company and gave them input into the layout of well pads to help avoid sensitive areas and conflicts with recreation operations in the park.  He said they are still evaluating the Yellow Creek request.

Oversight Staff For Marcellus Wells: Noting a recent Joint Legislative Budget and Finance Committee report recommended additional staff to oversee Marcellus Shale development in the Fish and Boat Commission, Sen. John Pippy (R-Allegheny) asked about the need for more staff to oversee Marcellus development on DCNR lands.  
            Dunn said the budget includes 27 new positions in the Bureau of Forestry to oversee State Forest land drilling which are carried through in FY 2011-12.  As activity ramps up on Marcellus wells, Dunn said they would have to reevaluate the need for additional staff.

State Park Status: Dunn said there should be no State Parks would be closed in the coming fiscal year because the budget proposes transferring monies from the Oil and Gas Lease Fund to help finance park operating costs.  She did note there was some curtailment of State Park services last year and those services would remain closed this coming year.
            Sen. Jim Ferlo (D-Allegheny) expressed concern about the dependence of DCNR on Marcellus Shale drilling royalties for operating costs when the agency is to be an advocate for conservation.
            Dunn said DCNR has always had a multiple use approach to managing State Forest and Park lands, including a history of timbering and oil and gas development and takes very seriously the agency's responsibility for stewardship of these lands.
            Dunn said Pennsylvania's State Forest system was certified as using sustainable forest practices and the State Park system was recently awarded a Gold Medal Award for the quality of its operations.

Heritage Parks: Sen. Mary Jo White asked why the budget proposal increased funding for land trust and local conservation groups, but zeroed out the Heritage Parks line item.
            Dunn said Heritage Parks are eligible for Keystone, Community Partnership and Growing Greener grants and they compete well because their projects have multiple benefits-- recreation, environmental and economic development.
            Dunn noted Heritage Parks return about $5 in benefits for every $1 provided by the state in grants and are responsible for generating about 6,000 jobs annually.

Growing Greener Fund: Dunn confirmed all the monies under the Growing Greener II bond issue are exhausted.  She noted the Renew Growing Greener Coalition is pressing to renew funding for the program.  With respect to DCNR funding, Dunn said her agency is looking to royalties monies in the Oil and Gas Lease Fund to finance State Park and State Forest land development and enhancement.
            Dunn said there is a history and ongoing need for funding conservation projects through programs like Growing Greener and its predecessor programs.

Keystone Fund: In response to a question about funding available from the Keystone Recreation, Park and Conservation Fund, Dunn said there has been an increase in proposed funding to $43 million from $27.7 million in FY 2011-12.  She noted reality transfer tax revenue projections show an increase in funds available through the Keystone Fund, due in part to land and rights transfers in Marcellus Shale development areas.

Privatization In State Parks: Dunn said DCNR is always looking for opportunities for partnership to build local tourism and recreation opportunities.  A recent economic impact study shows State Parks generate more than 10,000 direct and indirect jobs around the state resulting in over $929 million of economic benefit.  In a recent study by the Delaware Valley Regional Planning Commission also shows investments in preserving open space yields increased property value.
            Norbeck said there are over 125 concessionaire's contracts for food, recreation and facility operations across the state from the Denton Hill Ski Area to pool facilities at several parks.
            Dunn said The Nature Inn at Bald Eagle Inn in Centre County is a public-private partnership model DCNR would like to promote to provide a variety of accommodations in State Parks.  John Norbeck said the Inn has a 45 percent occupancy rate, which is ahead of projections, especially since it was open at the end of the Park's main season.

Gypsy Moths: In response to a question, Dan  Devlin said gypsy moths should not be a problem this year because the populations are still down and the agency should have adequate resources to deal with the issue.  However, tent caterpillar populations are building and could be more of a problem.

            Video/audio files of completed budget hearings are available on the Senate Republican Appropriations Committee webpage.


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