Post by pfsc on Apr 3, 2015 14:35:23 GMT -5
Senate Appropriations Committee budget hearing with DCNR
4/1/15, 11:00 a.m., Hearing Room 1 North Office Building By Matt Hess
The committee held a budget hearing with the Department of Conservation and Natural Resources (DCNR).
Sen. Yaw, Chairman of the Senate Environmental Resources and Energy Committee, noted the state forest system consists of 2.2 million acres and questioned how much of that land is utilized by well pads, access roads, and pipelines. Daniel Devlin, Director of the Bureau of Forestry, DCNR, explained that 1,004 permits were approved by the Department of Environmental Protection (DEP) and DCNR and there are currently 608 wells drilled, 232 approved well pads, and the total number of Marcellus wells that are producing is 517. He said 1,600 acres have been disturbed by natural gas drilling activities.
Sen. Yaw questioned how much in royalties the department has received from the active gas wells. Devlin said the department received $120 million last year and this year the royalties are expected to total $130 million.
Sen. Yaw said the governor signed an executive order moratorium on further leasing on state forest land for natural gas activities and it was his understanding that the Commonwealth Court case ruled that only the Secretary of DCNR can issue that type of moratorium. He questioned if the secretary has issued a moratorium. Cindy Adams Dunn, acting secretary of DCNR, responded “no” and explained that the department advised the governor to take a pause on the development. “The build out of the ‘08 and ‘10 leases is 608 with a potential build out of 3,000,” she stated. “The five-year Forest Management Plan gives us a chance to look at the issue. We have an extensive monitoring report that feeds data and information on the impact. Given that oil and gas is just a part of our mission it gives us a chance to assess and evaluate the activity to date.” Sen. Yaw questioned if the secretary issued the moratorium order. Sec. Dunn said she did not issue the order. Sen. Yaw asked if the secretary agreed with the governor’s moratorium order. Sec. Dunn responded, “Yes I did.”
Sen. Yaw said in his district there is a push by DCNR to lease the land under any navigable waterway and questioned if that is included under the moratorium. Sec. Dunn explained that it was not part of the moratorium. “The under-river leasing is a situation where you have private lands, private leases on either side of a navigable river or a stream that is deemed navigable that the companies want to access across that slice of commonwealth property,” she stated. “Our job on behalf of the citizens is to really give what’s due to the citizens the amount of money from that lease…without the lease a company might have to do a well pad on either side to access the resource so we did not include that in the moratorium.” Sen. Yaw explained that in many situations the waterway is a small stream on a farm and without DCNR approval the entire property cannot be leased to the natural gas companies. “You have a small stream that’s three feet wide and runs in the middle of a 200 acre farm and you basically control what happens on that farm,” he stated. Sec. Dunn said DCNR is responding to current law. “We work on behalf of the citizens so we have to retain and give back what is due to the citizens of the Commonwealth,” she stated. “I won’t comment on the size of the streams, I haven’t seen them.”
Sen. Yaw said the National Park Service has attributed a decline in national park attendance to aging demographics and questioned if state parks have experienced the same decline. Sec. Dunn said the state park system has seen an uptick in attendance. “Pennsylvania is doing quite well, we are an outdoor state,” she stated. “We’ve done a pretty good job of getting ahead of this trend and you need to be proactive and look ahead and really react to do it.”
Sen. Vogel questioned why timber sales are down $1.5 million. Sec. Dunn noted that the governor has an interest in the timber industry given his background in cabinets and said he is committed to enhancing the industry. Devlin said the same amount of timber is being cut but the department is not getting the level of bids it has in the past. “A lot of it has to do with the housing market in that it has not rebounded totally though it is certainly on its way up and the industry is doing much than it was a couple years ago.”
Sen. Blake discussed the success of the Heritage Park system and lamented that the funding for the system was eliminated in the governor’s budget proposal. Sec. Dunn agreed that Heritage Parks is an important line item and indicated that the department with work with the legislature and the administration on the issue.
Sen. Teplitz indicated that he has legislation to restore lifeguards at state park beaches and expressed concern about DCNR’s “swim at your own risk” policy. Sec. Dunn argued that the swim at your own risk policy is safer because it requires parents to keep a closer eye on their children and said the policy allows visitors to parks a greater access because requiring a lifeguard shortens the swimming season. Sen. Teplitz affirmed that he will continue to work with the department on the issue.
Sen. Wiley noted that Presque Isle State Park has thousands of visitors a day and inquired about public safety at the parks. Sec. Dunn agreed and said the Presque on a summer weekend can have 25,000 people in attendance. She explained that the attendance varies at different times of the year which makes it difficult to always staff appropriately at times. “It’s a big operation and big demand,” she stated. “What allows this to work is a great, motivated staff…they love their jobs and care about the people.”
Sen. Wiley questioned if DCNR has worked with the Department of Community and Economic Development (DCED) on enhancing tourism efforts. Sec. Dunn emphasized that the governor puts a focus on the departments working together and the department works with DCED on a number of tourism initiatives. “We are really pleased what a strong standing the outdoor world gets in the tourism picture across the state,” she stated. “Just in the state parks we bring $1 billion into the economy and 13,000 jobs across the Commonwealth.”
Sen. Rafferty questioned how enhanced funds through Act 89 for dirt and gravel roads are being utilized. Sec. Dunn said the increase from $1 million to $7 million has had a tremendous positive impact and indicated that the department will provide further details to the committee. Devlin agreed and said some of the funds are being used to enhance state park roads.
Sen. Scavello asked if the governor made any other cuts to the budget to offset the loss of $95 million in revenue because of the moratorium. Sec. Dunn disputed that there was a loss of revenue due to the moratorium. “That money was not going to be coming anyway…if we were sitting here today without a moratorium we would not be seeing that $95 million,” she stated. “Budgets are an estimate that provided way ahead of reality and it was not going to materialize as $95 million, I don’t know what it could have been maybe zero.”
Sen. Scavello questioned if there have been any losses of life at the state parks since the swim at your own risk policy was implemented. Sec. Dunn indicated that three people have drowned. “Lives are lost with lifeguards, nationally even more so because of the complacency factor,” she stated. “We take this very seriously and it was a policy driven decision.”
Sen. Schwank emphasized the importance of Community Conservation Grants and questioned how the increase in the grants will be spent. Sec. Dunn said the grants focus on connecting large trails and the department will survey communities on their trail and park needs.
Sen. Schwank asked how the department will be dealing with gypsy moth infestations this year. Sec. Dunn noted that the department has $2.5 million for gypsy moth funds this year. Devlin added that the department will be spraying for gypsy moths this year and indicated that they expect an increase in that population in pockets of the state. “It’s all going to depend on the spring and it’s a hard thing to budget,” he stated.
Sen. Wagner asked if the administration is committed to not closing any state parks if the budget process is drawn out. Sec. Dunn said she will not recommend park closures and affirmed that the parks will be open as long as they have the resources to keep them open.
Sen. Vulakovich questioned if there is any drilling in the state parks. Sec. Dunn explained that there is no drilling in state parks, noting that the department does not own the mineral rights in 80 percent of the land.
Sen. Vulakovich asked how the department spends royalty funds. Sec. Dunn said the vast majority is in the department’s operating budget and a small portion goes toward recreation and flood control initiatives.
Sen. Yaw reiterated that there is 2.2 million acres in state land and only 1,600 acres is being disturbed for natural gas activities which brings in $130 million worth of income. “It seems to me that it is a really good investment, a way to make a state agency self-supporting, self-sustaining, you’re living off your own resources with a very little appreciable impact,” he stated. Sen. Yaw questioned if there are wind farms on state forest land. Sec. Dunn said there are not. “It’s not in our enabling legislation,” she stated.
Chairman Browne questioned if the department has ever done a financial evaluation of all the state forests and parks. Devlin said the department has never done that type of analysis. “I guess we could do that sort of analysis of course the value is very speculative in terms of current market prices,” he stated.
Chairman Browne emphasized the difficulty in budgeting for funds derived from a severance tax. “I’m concerned about the consistency in how we’re talking about natural gas activity in relation to our own financial position, our own cash flow and how we’re making projections for the severance tax,” he stated. “We’re really struggling with what really is the responsible projection of the severance tax in relation to the governor’s proposal because we don’t hear consistent things for what are expectations are with regard to marketplace and amount that’s generated from that tax is directly driven by the dynamics of the marketplace, price and volumes. If we don’t at least come down to an understanding collectively of what the facts are we would be committing ourselves to spending that based on projections we can’t sustain.”
4/1/15, 11:00 a.m., Hearing Room 1 North Office Building By Matt Hess
The committee held a budget hearing with the Department of Conservation and Natural Resources (DCNR).
Sen. Yaw, Chairman of the Senate Environmental Resources and Energy Committee, noted the state forest system consists of 2.2 million acres and questioned how much of that land is utilized by well pads, access roads, and pipelines. Daniel Devlin, Director of the Bureau of Forestry, DCNR, explained that 1,004 permits were approved by the Department of Environmental Protection (DEP) and DCNR and there are currently 608 wells drilled, 232 approved well pads, and the total number of Marcellus wells that are producing is 517. He said 1,600 acres have been disturbed by natural gas drilling activities.
Sen. Yaw questioned how much in royalties the department has received from the active gas wells. Devlin said the department received $120 million last year and this year the royalties are expected to total $130 million.
Sen. Yaw said the governor signed an executive order moratorium on further leasing on state forest land for natural gas activities and it was his understanding that the Commonwealth Court case ruled that only the Secretary of DCNR can issue that type of moratorium. He questioned if the secretary has issued a moratorium. Cindy Adams Dunn, acting secretary of DCNR, responded “no” and explained that the department advised the governor to take a pause on the development. “The build out of the ‘08 and ‘10 leases is 608 with a potential build out of 3,000,” she stated. “The five-year Forest Management Plan gives us a chance to look at the issue. We have an extensive monitoring report that feeds data and information on the impact. Given that oil and gas is just a part of our mission it gives us a chance to assess and evaluate the activity to date.” Sen. Yaw questioned if the secretary issued the moratorium order. Sec. Dunn said she did not issue the order. Sen. Yaw asked if the secretary agreed with the governor’s moratorium order. Sec. Dunn responded, “Yes I did.”
Sen. Yaw said in his district there is a push by DCNR to lease the land under any navigable waterway and questioned if that is included under the moratorium. Sec. Dunn explained that it was not part of the moratorium. “The under-river leasing is a situation where you have private lands, private leases on either side of a navigable river or a stream that is deemed navigable that the companies want to access across that slice of commonwealth property,” she stated. “Our job on behalf of the citizens is to really give what’s due to the citizens the amount of money from that lease…without the lease a company might have to do a well pad on either side to access the resource so we did not include that in the moratorium.” Sen. Yaw explained that in many situations the waterway is a small stream on a farm and without DCNR approval the entire property cannot be leased to the natural gas companies. “You have a small stream that’s three feet wide and runs in the middle of a 200 acre farm and you basically control what happens on that farm,” he stated. Sec. Dunn said DCNR is responding to current law. “We work on behalf of the citizens so we have to retain and give back what is due to the citizens of the Commonwealth,” she stated. “I won’t comment on the size of the streams, I haven’t seen them.”
Sen. Yaw said the National Park Service has attributed a decline in national park attendance to aging demographics and questioned if state parks have experienced the same decline. Sec. Dunn said the state park system has seen an uptick in attendance. “Pennsylvania is doing quite well, we are an outdoor state,” she stated. “We’ve done a pretty good job of getting ahead of this trend and you need to be proactive and look ahead and really react to do it.”
Sen. Vogel questioned why timber sales are down $1.5 million. Sec. Dunn noted that the governor has an interest in the timber industry given his background in cabinets and said he is committed to enhancing the industry. Devlin said the same amount of timber is being cut but the department is not getting the level of bids it has in the past. “A lot of it has to do with the housing market in that it has not rebounded totally though it is certainly on its way up and the industry is doing much than it was a couple years ago.”
Sen. Blake discussed the success of the Heritage Park system and lamented that the funding for the system was eliminated in the governor’s budget proposal. Sec. Dunn agreed that Heritage Parks is an important line item and indicated that the department with work with the legislature and the administration on the issue.
Sen. Teplitz indicated that he has legislation to restore lifeguards at state park beaches and expressed concern about DCNR’s “swim at your own risk” policy. Sec. Dunn argued that the swim at your own risk policy is safer because it requires parents to keep a closer eye on their children and said the policy allows visitors to parks a greater access because requiring a lifeguard shortens the swimming season. Sen. Teplitz affirmed that he will continue to work with the department on the issue.
Sen. Wiley noted that Presque Isle State Park has thousands of visitors a day and inquired about public safety at the parks. Sec. Dunn agreed and said the Presque on a summer weekend can have 25,000 people in attendance. She explained that the attendance varies at different times of the year which makes it difficult to always staff appropriately at times. “It’s a big operation and big demand,” she stated. “What allows this to work is a great, motivated staff…they love their jobs and care about the people.”
Sen. Wiley questioned if DCNR has worked with the Department of Community and Economic Development (DCED) on enhancing tourism efforts. Sec. Dunn emphasized that the governor puts a focus on the departments working together and the department works with DCED on a number of tourism initiatives. “We are really pleased what a strong standing the outdoor world gets in the tourism picture across the state,” she stated. “Just in the state parks we bring $1 billion into the economy and 13,000 jobs across the Commonwealth.”
Sen. Rafferty questioned how enhanced funds through Act 89 for dirt and gravel roads are being utilized. Sec. Dunn said the increase from $1 million to $7 million has had a tremendous positive impact and indicated that the department will provide further details to the committee. Devlin agreed and said some of the funds are being used to enhance state park roads.
Sen. Scavello asked if the governor made any other cuts to the budget to offset the loss of $95 million in revenue because of the moratorium. Sec. Dunn disputed that there was a loss of revenue due to the moratorium. “That money was not going to be coming anyway…if we were sitting here today without a moratorium we would not be seeing that $95 million,” she stated. “Budgets are an estimate that provided way ahead of reality and it was not going to materialize as $95 million, I don’t know what it could have been maybe zero.”
Sen. Scavello questioned if there have been any losses of life at the state parks since the swim at your own risk policy was implemented. Sec. Dunn indicated that three people have drowned. “Lives are lost with lifeguards, nationally even more so because of the complacency factor,” she stated. “We take this very seriously and it was a policy driven decision.”
Sen. Schwank emphasized the importance of Community Conservation Grants and questioned how the increase in the grants will be spent. Sec. Dunn said the grants focus on connecting large trails and the department will survey communities on their trail and park needs.
Sen. Schwank asked how the department will be dealing with gypsy moth infestations this year. Sec. Dunn noted that the department has $2.5 million for gypsy moth funds this year. Devlin added that the department will be spraying for gypsy moths this year and indicated that they expect an increase in that population in pockets of the state. “It’s all going to depend on the spring and it’s a hard thing to budget,” he stated.
Sen. Wagner asked if the administration is committed to not closing any state parks if the budget process is drawn out. Sec. Dunn said she will not recommend park closures and affirmed that the parks will be open as long as they have the resources to keep them open.
Sen. Vulakovich questioned if there is any drilling in the state parks. Sec. Dunn explained that there is no drilling in state parks, noting that the department does not own the mineral rights in 80 percent of the land.
Sen. Vulakovich asked how the department spends royalty funds. Sec. Dunn said the vast majority is in the department’s operating budget and a small portion goes toward recreation and flood control initiatives.
Sen. Yaw reiterated that there is 2.2 million acres in state land and only 1,600 acres is being disturbed for natural gas activities which brings in $130 million worth of income. “It seems to me that it is a really good investment, a way to make a state agency self-supporting, self-sustaining, you’re living off your own resources with a very little appreciable impact,” he stated. Sen. Yaw questioned if there are wind farms on state forest land. Sec. Dunn said there are not. “It’s not in our enabling legislation,” she stated.
Chairman Browne questioned if the department has ever done a financial evaluation of all the state forests and parks. Devlin said the department has never done that type of analysis. “I guess we could do that sort of analysis of course the value is very speculative in terms of current market prices,” he stated.
Chairman Browne emphasized the difficulty in budgeting for funds derived from a severance tax. “I’m concerned about the consistency in how we’re talking about natural gas activity in relation to our own financial position, our own cash flow and how we’re making projections for the severance tax,” he stated. “We’re really struggling with what really is the responsible projection of the severance tax in relation to the governor’s proposal because we don’t hear consistent things for what are expectations are with regard to marketplace and amount that’s generated from that tax is directly driven by the dynamics of the marketplace, price and volumes. If we don’t at least come down to an understanding collectively of what the facts are we would be committing ourselves to spending that based on projections we can’t sustain.”