Governor Corbett’s 2012 budget proposal shows a projected decrease of more than $3 million from mineral lease royalties. That’s the first decrease since 2003, before the Marcellus Shale rush took off. The reason for the reduction is partly due to depressed natural gas prices, and partly due to a moratorium on new gas leases in state forests. Environmentalists had worried the Governor would open more state forests to drilling. But that’s not on the books yet. All told, the state’s Oil and Gas Lease Fund has about $22 million dollars less to distribute than last year.
The Department of Conservation and Natural Resources will get almost $70 million dollars from the fund. That accounts for about one third of the department’s entire budget, which worries some conservationists.
Former DCNR secretary John Quigley served under Governor Ed Rendell. Quigley says money from the Oil and Gas Fund was originally diverted to DCNR during his watch to keep the state parks open. But he says bankrolling the department with lease money is a slippery slope.
“That’s the problem,” says Quigley. “Your conservation agency shouldn’t be dependent on cutting down trees and drilling for natural gas to keep the lights on.”
Quigley says the department used to get the bulk of its money directly from the general fund. Timber and state park fees also generate revenue for DCNR, as well as federal grants. About 700,000 acres of state forest land has been leased to drilling companies. Much of that is in North Central Pennsylvania, where the Marcellus Shale yields what’s called “dry” gas. Many of the drillers are scaling back those operations for the more lucrative “wet” gas available in areas where the state does not own the land. So leasing more state land may just be a matter of waiting until the market improves.
For some, the fact that Corbett has held off on leasing more forest land is small comfort. The Governor wants to take money usually earmarked for forest conservation and open space and put it all into the general fund. The Keystone Recreation, Park and Conservation Fund, which uses proceeds from real estate transfer taxes, has been zeroed out in his 2012 proposal.
Quigley says Corbett’s new budget also cuts DCNR’s forest research and forestry regeneration.
“The Department of Conservation isn’t even planting trees,” says Quigley.