Four Key Things to Watch in Governor Corbett's Budget Address

In last year’s budget address Governor Tom Corbett promised to make Pennsylvania the “Texas of the natural gas boom.” That hasn’t happened yet.
A year later, gas prices have continued to plunge, partly due to a glut created by the shale boom, and partly due to mild winter weather. Several gas companies, like Chesapeake Energy, have announced scaling back on natural gas production. And forecasters, such as the U.S. Geological Survey and the Energy Information Agency, have reduced the amount of recoverable natural gas they think lies beneath Pennsylvania.
The governor’s speech likely won’t even be the main event of the day, when it comes to drilling. The Senate and House are expected to pass a natural gas impact fee today, after more than a year of debating the issue. (More than three years, if you count the back-and-forth over whether or not to impose a severance tax, which began to heat up in 2009.)
Still, the governor’s budget address sets the legislative agenda for the year, so here are four things to watch for:

1) Lean times for the state’s coffers mean likely budget cuts for environmental programs. The Department of Environmental Protection and the Department of Conservation and Natural Resources are two likely places to trim. Environmentalists say they’re lean enough. So big savings may have to come from somewhere else in the budget. But with school districts across the state on the brink of bankruptcy, don’t count on any budget increases for forests, state parks, and wildlife protection.
2) During his campaign for office, Corbett said he’d be willing to lift the moratorium Democrat Ed Rendell placed on leasing out additional state forest land for drilling. But it hasn’t happened yet. Some environmentalists worry it could be in his new budget. Others who have actually seen the budget say there’s no plan to reverse the moratorium. Corbett may be waiting for higher gas prices in order to maximize the revenue. PennFuture and other environmental groups have deluged the Governor with a letter campaign against lifting the moratorium. PennFuture CEO Jan Jarrett opposes leasing the forest at all, but adds that doing so now would amount to a “fire sale.” Although the highly unpopular move may not be mentioned in Corbett’s speech, look to see if it’s in the fine print under revenue projections.
3) The environmental restoration fund Growing Greener is all but bankrupt. The impact fee would direct $20 to $30 million in leasing revenue into the Environmental Stewardship Fund each year, beginning in 2013. But Growing Greener has become a skeleton of its former self when it was established ten years ago under then governor Tom Ridge.
4) Revenue projections from permit fees. More than 3000 Marcellus wells have been drilled since the boom began in 2005. One glimpse into the future may be what the Corbett Administration expects from the shale rush.

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