On February 24, 2016, the Department of Conservation and
Natural Resources (DCNR) Secretary Cindy Dunn testified during budget
hearings. She said that there are
currently no natural gas rigs operating in state forests. There is a moratorium from Governor Tom Wolf
that prohibits Pennsylvania from entering into any new state forest leases, but
Ms. Dunn testified that she doubts the industry would have any interest in the
leasing the land at this time anyway.
DCNR has leased mineral rights for state-owned waterways. The rationale for leasing beneath waterways
is that riverbed leases lessen land disturbance, according to Ms. Dunn.
Ms. Dunn also testified regarding Governor Wolf’s proposed
shift in DCNR funding from the Oil and Gas lease fund to a structure of more
allocation from the state’s general budget.
Ms. Dunn testified that the shift in funding will reduce the reliance on
the constantly fluctuating natural gas market.
Governor Wolf’s budget proposal includes spending an
additional $61.3 million from the state’s general budget fund on the DCNR to
offset the $51 million reduction the agency is facing from the decrease in oil
and gas royalties. Royalty revenues were
down in the first six months of the current fiscal year from $68.3 million to
$36.7 million. The budget proposal calls
for an increase in landfill tipping fees for municipal waste to replenish the
Oil and Gas lease fund. The landfill fee
increase is projected to raise $35 million.
It is anticipated that the fund will bounce back when the price of
natural gas rises.
Written by - Stephen Kenney
Research Assistant
Center for Agricultural and Shale Law
