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Frack attack

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Illinois

* Subscribers know a lot more about this, but here’s an AP story from earlier in the week…

Illinois’ powerful House speaker said Wednesday that he supports a moratorium on high-volume oil and gas drilling, weighing in on the issue one day before a House committee is scheduled to consider competing bills involving the practice.

It was unclear how much sway that Speaker Michael Madigan, a Chicago Democrat, would have over lawmakers’ decisions, especially since more than 50 House members already have signed on to a bill that would regulate hydraulic fracturing, or “fracking” - the key to jumpstarting the practice in Illinois. Some suggested his comments might be meant to pressure industry over drilling fees and taxes.

But environmentalists and landowners, who rallied at the Statehouse this week to urge lawmakers to impose a moratorium, said they welcome the support.

“We take the speaker at his word and hold him to it that he recognizes a moratorium as the only true way to protect public health and the environment from the rolling environmental disaster that fracking has been,” in other states, said Bruce Ratain, state policy associate with Environment Illinois. “This is what real leadership looks like.”

Madigan, who introduced a failed drilling moratorium last year, would not elaborate except to say, “read about what happened in Pennsylvania.” The issue there has become controversial, including over water quality near drilling sites.

* Environment Illinois praised Madigan’s announcement…

One day after nearly a hundred concerned citizens converged on Springfield, Ill., to call for a moratorium on fracking, House Speaker Mike Madigan, D-Chicago, announced March 13 his support for legislation to stop the dirty drilling technique in Illinois.

House Bill 3086 in the House (sponsored by state Rep. Deb Mell, D-Chicago) and Senate Bill 1418 (sponsored by state Sen. Mattie Hunter, D-Chicago) both call for a moratorium on fracking in Illinois, and are scheduled for committee hearings in Springfield.

“In state after state, fracking has been a rolling environmental disaster — contaminating drinking water, making nearby residents sick, and turning rural landscapes into industrial zones,” said Bruce Ratain, state policy associate for Environment Illinois. “We praise Speaker Madigan for looking carefully at the facts about fracking, and joining the growing call to keep it out of Illinois.”

Liz Patula, a member of SAFE (Southern Illinoisans Against Fracturing Our Environment), had the following response: “I said it yesterday in the Capitol and I will say it again today: New York’s Assembly just voted to extend its moratorium on fracking. Don’t the citizens of Illinois deserve the same protection?”

While in Springfield, activists also held a rally and press conference in the Capitol rotunda, and delivered materials or met with every legislator in the House and Senate.

* The following day came this announcement…

Backers of a measure to regulate high-volume gas and oil drilling in Illinois announced Thursday they have agreed on the fees and extraction taxes that drillers would pay the state if lawmakers approve a plan to regulate the practice.

More…

Under the agreed rates, well operators also would pay a 3 percent-per-barrel extraction, or “severance,” tax during the first two years of operation. That tax would scale up after the second year, depending on the well’s average monthly production. The highest tax rate would be set at 6 percent.

Denzler told legislators he was “reticent” to estimate how much revenue fracking could generate for Illinois, because production among wells varies. But he provided an overview using an estimated model: Production of 200 barrels a day per well, at a 3 percent tax rate, would generate just under $200,000 per year per well.

Denzler’s group is among those that helped draft Bradley’s proposal.

Gov. Pat Quinn, who has called the legislation a jobs bill, reiterated his support Thursday, a day after House Speaker Michael Madigan said he supports a moratorium on fracking. Quinn cited the endorsement from some environmental groups that helped craft the legislation.

If you think that Madigan’s moratorium announcement moved the industry to accept the tax rates, you’d be right.

posted by Rich Miller
Friday, Mar 15, 13 @ 11:09 am

Comments

–If you think that Madigan’s moratorium announcement moved the industry to accept the tax rates, you’d be right. –

Then it was a good move.

3%-6% seems within range as other states.

Comment by wordslinger Friday, Mar 15, 13 @ 11:18 am
Leverage 101

Comment by b Friday, Mar 15, 13 @ 11:20 am
Everyone should re-listen to Jack Tichenor’s recent interview with Speaker Madigan. It was chock full of valuable nuggets and a rare glimpse into the Speaker’s mind.

Madigan made the linkage pretty clear to Jack and his listeners last week, saying essentially that taxes (amount and purpose) were an open question and there was a lot of support for a moratorium. You don’t need to be a statehouse insider to read between those lines.

Madigan also made some other very interesting comments on a few other subjects.

Comment by 47th Ward Friday, Mar 15, 13 @ 11:26 am
Well, at least we know the Dems, at the end of the day, are most interested in the taxes to be earned, rather than the false concern about the environment.

Comment by Downstate Friday, Mar 15, 13 @ 11:41 am
Excellent article in the March ‘13 National Geographic about fracking and the effect it has had on North Dakota. I’d encourage everyone to look at it.

Comment by Anon Friday, Mar 15, 13 @ 11:46 am
Announcing last call always brought everyone back to the bar.

Comment by Arthur Andersen Friday, Mar 15, 13 @ 12:16 pm
How does the bill address the immense uptick in truck traffic fracking brings?

Looking thru a recent National Geographic article on how this is going down in the Bakken, I look at the hundreds of semi-trailer truck trips a day hauling water, chemicals, waste, gravel, and equipment back and forth to and from these well sites. And I think about the quality of the county roads, the last time I drove in Southern Illinois. Does IDOT have a plan to deal with the heavy road use and wear-and-tear? Do the counties? How will the towns near these sites handle the true traffic increase?

Fracking will mean lots of jobs for truck drivers and truck-support businesses like garages and fuel stations. And later, local road crews will have a time, keeping up with patching and re-grading roads that were only ever meant to see a few grain truck runs a season. Who is paying for the road work? The frackers? Or is this like airports and interstates, where we subsidize the infrastructure with tax money?

Comment by Newsclown Friday, Mar 15, 13 @ 12:36 pm
First of all, the New Albany Shale is not even close to the Bakken; Southern Illinois will not become the next North Dakota.

There will be problems with fracking whether we start now or wait 10 years. However, Bradley’s bill goes a long way toward addressing those issues and it is a very good bill in terms of protecting the environment and the local residents. It also shows that the GA is willing to address future issues that may and probably will arise.

A moratorium would not solve anything, and the next regulatory bill could easily be less protective than Bradley’s bill. The smart move is to take this bill and work with local folks to pass a bill that addresses issues with roads, etc. that arise as we move forward. We should not let the perfect be the enemy of the good; there is no such thing as a perfect bill.

Comment by Pot calling kettle Friday, Mar 15, 13 @ 12:59 pm
Newsclown, there is a vast difference between the nature of existing infrastructure in North Dakota and that which already exists in Southeastern Illinois. Rural roads are already in place for the truck traffic involved in the removal of coal from much of that area of the state. These roads have been built to handle repetitive semi-truck traffic and are extensive.

The roads in the Dakotas are not at all similar to the existing infrastructure in S.E. Illinois. It is also true that existing pipeline and railroad assets might give Illinois a temporary advantage.

Comment by JoeVerdeal Friday, Mar 15, 13 @ 1:11 pm