DCNR examining gas royalty payments âvery closelyâ
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Marie Cusick

Marie Cusick / StateImpact Pennsylvania
Acting DCNR Secretary Cindy Dunn talks with legislators at a House budget hearing Monday.
The state Department of Conservation and Natural Resources expects to bring in $130 million from natural gas drilling royalties this year. Much of the money will be used to fund the agencyâs general operating expenses.
At a budget hearing before the House Appropriations Committee Monday, acting DCNR Secretary Cindy Dunn told legislators itâs a âlong-termâ goal to wean the agency off royalty money.
Environmentalists complain it poses an inherent conflict of interest for DCNRâ which is supposed to balance conservation with resource management. Governor Wolfâs spending plan would make the department slightly less reliant on royalties, but they would still make up over a third of its $342.6 million proposed budget.
âItâs not a good set-up to have the agency funded by extracted resources. Markets and prices go up and down. Things change,â said Dunn. âWill we be off of it in the short term? I donât think itâs realistic.â
Rep. John Maher (R- Allegheny) also asked about the problems some people have had with gas companies paying royalties properly.
âHas DCNR undertaken an organized effort to audit the statements you receive from drillers?â
State Forester Dan Devlin said DCNR has multiple levels of oversightâ including an internal review and a contract with Penn State to check gas volume information. The agency is also hiring an outside firm to audit how gas companies report price data.
âWe are looking at it very closely,â said Devlin. âWhenever we find discrepancies we contact the companies. For the most part, theyâve been pretty amenable to fessing up and giving us what the Commonwealthâs due.â
As StateImpact Pennsylvania has previously the reported, DCNR is also in the process of investigating some drillers for shortchanging the state.
Dunn was also questioned about plans to expand drilling in the Loyalsock State Forestâ specifically in a 25,000 acre swath of the forest known as the Clarence Moore landsâ a treasured area for wildlife and recreation.
âWhat is the status of evaluating that, and where are we on timelines?â asked Rep. Garth Everett (R-Lycoming).
Although the state does not own the mineral rights under the Clarence Moore lands, it does have surface rights on about 18,000 acres. Anadarko Petroleum, along with Southwestern Energy, can exercise surface control on about 7,000 acres. Opponents want DCNR to use its control over the remaining 18,000 acres as leverage to keep development off the most sensitive areas.
Under the Corbett administration, DCNR said its hands were tied and it had to allow the companies to develop their mineral rights.
âThat position hasnât changed,â said Dunn. âWeâre just taking fresh eyes on that to see if we completely agree. The discussions are still fairly early on.â
DCNR has said it will allow a 15 day public comment period when it has a final development plan from Anadarko and Southwestern, but so far there is no final plan.