Falling natural gas prices will mean less revenue for the Department of Conservation and Natural Resource’s Oil and Gas Lease Fund.
That’s according to Secretary Richard Allan, who testified before the Senate Appropriations Committee yesterday.
Drilling on state forest land provides the revenue for the the Oil and Gas Lease Fund.
“I think we’re all seeing the numbers that are out there, they’ve been dropping steadily,” Department of Conservation and Natural Resources Secretary Richard Allan testified Thursday before the Senate Appropriations Committee.
Allan said although there is a slowdown in activity, “production is increasing, and we’re being very conservative with our numbers.”
He is predicting Oil and Gas Lease Fund will receive between $56 million and $57 million in rents and royalties next fiscal year.
…The department based their projections on an average $3 natural gas price. According to the U.S. Energy Information Administration, Wednesday’s price was $2.54 per million British thermal units (MMBtu).
Allan also fielded a question about StateImpact Pennsylvania’s January report documenting how he had trimmed an environmental research program’s budget by nearly 70 percent, and eliminated projects documenting climate change and natural gas drilling’s impact from a list of recommended grants.
Allan said the 70 percent cut “is not an accurate number.”
“I asked how much are we doing and who has the type of expertise. We found that we were paying over $2 million on existing contracts with outside entities to do all the work, virtually the same type of research that were in the Wild Resources Conservation applications,” he said. “So the 70 percent cut is not an accurate number. The 800 [thousand] was an estimate from the previous year. We reduced it to $251,000 because we felt that we were already achieving the review and scientific research by virtue of all the contracts that we had in place on multiple years and going out multiple years.”
Blake asked, “You can reassure me that the research decisions that you’re making are not steering away from the impacts of this industry?
Allan responded, “Absolutely not.”
StateImpact Pennsylvania stands by its story, which reported the Wild Resource Conservation Program staff initially recommended $780,000 worth of research grants, only to see Allan postpone a board meeting and trim its budget by nearly 70 percent, to $251,683, without soliciting input from anyone involved in the grant program.