Rep. Baker gives presentation
TOWANDA - Through the end of 2012, landowners in Bradford County received approximately $387 million in royalty payments from gas drilling.
But that's only a fraction of the amount of royalty payments that are coming.
It's estimated that a total of $4.3 billion in royalty payments will be paid out on the currently permitted wells in Bradford County over their lifetimes, state Rep. Matt Baker said Thursday at the annual convention of Bradford County Association of Township Officials.
There are currently 2,044 permitted wells in the county, of which 1,425 have been drilled or are in the process of being drilled, while the rest are still in the planning stage, said Baker (R-Tioga, Bradford).
Baker was one of an array of government officials - including state Sen. Gene Yaw, state Rep. Tina Pickett, and Bradford County Commissioner Daryl Miller - who spoke at the convention.
Baker gave a PowerPoint presentation at the gathering on the economic impact of Marcellus Shale drilling in Bradford and Tioga counties, the same presentation that he said he had recently given to the U.S. Congress.
Baker called the $387 million in royalty payments that were paid out to Bradford County landowners "pretty astonishing."
According to a copy of Baker's PowerPoint presentation, the $4.3 billion estimate of lifetime royalty payments comes from the Pennsylvania Independent Gas & Oil Association, while the $387 million estimate of royalties already paid out comes from the Shale Training & Education Center at the Pennsylvania College of Technology.
The average pay, including benefits, of employees working in Pennsylvania's Marcellus Shale for gas drilling companies and pipeline companies is $90,000, which is "pretty amazing," Baker said. "For rural Pennsylvania, that is pretty significant," he added.
The average pay, including benefits, for workers in the Marcellus Shale "ancillary industries" is $46,800, he said.
Over the past two years, the impact fee has generated a total of $15.7 million in revenue for the Bradford County government and a total of $23.4 million in revenue for the county's municipalities, he said.
Currently, the market for natural gas is "very soft," he said.
"We're a victim of our own success," he said. "There has been overproduction (of gas)."
The use of natural gas will increase in the future, which will increase the price of natural gas, he said.
As a result, "you will see (in Bradford County) more wells come into production. You will see more gathering lines deployed," he said.
Because there are over 600 planned wells in Bradford County that have a permit from the Department of Environmental Protection but have not yet been drilled, additional capacity exists locally to add to the county's current production of gas, he added.
There will be an increased demand for natural gas as some gas import facilities convert to gas export facilities, more natural gas vehicles are sold, and more factories, schools and other buildings start to use natural gas, he said.
There are already preliminary contracts in place to sell natural gas to buyers in Japan and India, but those contracts still need to be approved by the Federal Energy Regulatory Commission, Baker said.
Rep. Baker also said he has authored a bill to protect children from identity theft.
"I wrote the last two laws on identity theft, because I was victim of it," Baker said. "It happens every four seconds (in the United States)."
"Now perpetrators are focusing on children" to commit identity theft so that they can, among other things, obtain credit cards, he said.
Baker's bill has passed the House and is before the Senate.
Pickett said she and three other legislators have introduced House Bill 1684, which would prevent deductions for post-production costs from reducing gas royalty payments below 12.5 percent, the state's guaranteed minimum royalty.
"We are going forward with this bill," Pickett said. "We are adamant about moving it forward."
The other authors of the bill are Rep. Sandra Major (R-Susquehanna, Wayne, Wyoming), Rep. Garth Everett (R-Lycoming), and Baker.
Pickett also said she has been named chairman of the House Insurance Committee and said she is looking forward to taking on that role.
"We spend a lot of money on insurance," Pickett said, adding that she sees her role as being a protector of the consumer.
She said she wants buyers of insurance to be able to "get the best (insurance they) can get for the dollar."
Among the topics that Sen. Yaw discussed was Senate Bill 738, which he is sponsoring and which would "increase the accessibility and availability of natural gas" as a fuel source for homes and other buildings.
The bill "started off (as being intended) for rural Pennsylvania," Yaw said.
However, it turns out "there are pockets all over Pennsylvania that don't have access to natural gas ... About 50 percent of Pennsylvania families don't have access to natural gas," Yaw said.
The bill seeks to expand distribution lines for lower-cost gas produced from the Marcellus Shale.
James Loewenstein can be reached at (570) 265-1633; or email: firstname.lastname@example.org.