Aug 13, 2012 Jason News No Comments – Rhonda Duey, Executive Editor

The saying, “It’s not what you know; it’s who you know” definitely applies to operators in the Marcellus shale in Pennsylvania. The Marcellus stands out as perhaps the most contentious shale play in North America thanks to a well-funded and organized opposition that has tried to convince local landowners that hydraulic fracturing contaminates their water wells.

But navigating these pitfalls takes much more than a few PowerPoint presentations or locally distributed flyers, said Alan Novak, president and founder of Novak Strategic Advisors. Novak’s firm, based in Pennsylvania, helps its clients establish community relationships through intense, personalized grassroots campaigns. Pennsylvania is not a bad place to do business, he said. It just takes some getting used to.

The good news

Novak and his company work with Pennsylvania’s Department of Environmental Protection (DEP), an agency he characterizes as responsibly supportive of shale production. “The DEP is not taking the role of police,” he said. “It’s more an approach of let’s figure out how to do this, do it together, and do it right.” DEP is led by Secretary Michael Krancer, who has extensive environmental and business experience. The state also has a governorappointed Energy Executive, Patrick Henderson, who had been the executive director of the Senate Environmental Committee. Henderson and Krancer work closely together on energy and environmental policy. Gov. Tom Corbett also is encouraging shale development. Novak said the previous governor wanted a severance tax but was thwarted by the state legislature, so nothing was ever done. Corbett announced that in lieu of a severance tax there would be an “impact fee” that directs the funds raised to the local communities affected by shale development. Some of that money also will go into dedicated environmental funds. The state legislature enacted Act 13, which imposes an impact fee and not a severance tax, and Act 13 also provides for preemption of local government zoning regulation of gas and oil production. Pennsylvania’s Public Utility Commission (PUC), led by Commissioner Rob Powelson, is regulating elements of the gas industry – pipeline safety and the implementation of Act 13. Powelson spent a great deal of time in Texas researching and meeting with representatives of the Texas Railroad Commission in preparation for the PUC’s role in Pennsylvania in the Marcellus shale and gas plays.

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