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Politics & Government

Farmers Highlight Pennsylvania Gas Industry's Positive Impact

Agriculture Secretary says commission is still in early stages of plan.

When a tanker truck lost control and took out an electric poll in rural Bradford County this past year, it could have been a disaster for dairy farmer Jim VanBlarcom. 

The downed electric wires caused a power surge that shorted out the compressor on a 3,000-gallon tank of milk fresh from his herd of nearly 200 cows. The power was out for more than six hours, the milk spoiled and the compressor had to be replaced. 

Such is life for rural farmers struggling to carve out an existence in mountainous northern Pennsylvania. 

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But VanBlarcom, who reiterated the events to the governor’s Marcellus Shale Commission on Wednesday morning, said his story had a happy ending. He received a check a week after the incident from the trucking company, which was hauling water to a new natural gas drilling pad near the farm. 

“We got market value for the milk we lost, and the cost of replacement for the compressor motor and a little bit even for the extra labor,” VanBlarcom said.  

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The Columbia Township farm has been in his family since 1958. He operates it with his son and son-in-law. 

Gov. Tom Corbett created the Marcellus Shale executive panel to help formulate policy on the growing natural gas industry in Pennsylvania. The working group, which met May 11, is one of four created within the 30-member commission that is analyzing the local impact of the drilling industry to determine if a state-level “impact fee” is needed to mitigate the industry's cost on local infrastructure and human services, such as emergency services, police and housing. 

Those who testified May 11 gave an overwhelmingly positive review of the industry, though each individual acknowledged some negatives. 

When it comes to infrastructure in the state’s rural northern tier, VanBlarcom said he is convinced the drillers are doing the right thing by repairing roads which have been damaged by "hundreds of trucks per day" moving supplies and water to drilling sites.

When the three roads that ring his family farm were falling into disrepair thanks to the trucks traveling to and from the three nearby drilling pads, a single phone call fixed the problem. 

“All of them have been rebuilt better than ever, and all it took was a phone call to the gas company,” said VanBlarcom. “The next day they had trucks in there resurfacing the entire roadway.” 

In nearby Susquehanna County, some roads are being rebuilt so quickly that the county is having a tough time keeping track of the work being done by the private companies, County Commissioner MaryAnn Warren told the panel. 

When the companies are reconstructing over an existing road bed, they do not always have to have a work permit.

Local businesses also have benefited from the natural gas industry. Warren told the commission that Susquehanna County businesses ranging from auto repair to laundry, from restaurants to gas stations, were all exceeding expectations. 

“The spirit of entrepreneurship has brought life to Susquehanna County,” Warren said. “People have been encouraged to think outside the box to accommodate the needs of the gas companies.” 

VanBlarcom said he has doubled the size of his dairy herd within the past five years, in part due to the extra cash he received for leasing 20 acres of his farm for drilling. 

“It’s made the farm productive for the next generation,” he said. 

Jacqueline Root, a farmer in Tioga County who also represents the Pennsylvania Royalty Owners Association, a group that works to protect the interests of landowners who have leased land to the natural gas industry, said communication between the gas drillers and the landowners should improve, particularly in areas where the landowners are not the same people working the farms where drilling might take place. 

“There is a communication gap there, and that’s something that I’d like to see the industry address, diligently,” Root said. 

Terry Bossert, vice president of Chief Oil and Gas and a commission member, said the industry should address those concerns by maintaining a dialogue with landowners and farmers. 

“Down in Texas everyone has these huge ranches, so they don’t realize that up here somebody might own the land and somebody different might farm it,” Bossert said. “It’s certainly easy to work around.” 

Warren said some longtime residents were having difficulty renewing their leases, because landlords were raising rents due to the influx of gas company employees to the region. 

How the May 11 testimony will affect the commission’s recommendation to the governor remains to be seen. State Secretary of Agriculture George Greig said the panel is still in the preliminary stages. 

“These are the people who have the wells on their actual property and so I think their testimony is a lot more relevant for us,” Greig said. 

Corbett asked the commission to have a report on his desk by the end of July, but the state General Assembly might undercut his plan.

State Senate President Joseph Scarnati, R-Jefferson, has introduced legislation that would require the drilling industry to pay a local impact fee and wants to include the package in the state budget discussions. The budget must be passed by the end of June. 

Scarnati estimates the impact fee would generate $76 million this year and $150 million by 2014 as the industry grows. The tax would be collected and distributed by the state Public Utilities Commission. 

Under Scarnati’s plan, revenue from the impact fee would be given to local governments in parts of the state with natural gas drilling. Other revenue would be directed to the state conservation districts, which are locally controlled environmental programs. 

Natural gas industry groups have signaled support for the concept of an impact fee, but they have not endorsed any particular proposal. 

Environmental groups have pushed for the application of a broader severance tax on the industry's extraction of gas, with the revenue directed to the state general fund, various environmental programs and local governments in effected regions. 

Root said she would support a local impact fee, but only if the gas industry continued to be responsible for the infrastructure work in the region. 

“I see the roads being repaired in a much more timely fashion with the companies taking care of it, and in ways that our townships can’t necessarily cope,” Root said.

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