Wednesday, October 5, 2011
Unless the county is guaranteed at least 50 percent of the revenues from future natural gas drilling at Pittsburgh International Airport, Rich Fitzgerald says he'd be "reluctant" to allow anyone to drill there.
Fitzgerald, the Democratic candidate for Allegheny County Executive, made the comments during a Wednesday rollout of his plans for the airport if he's elected next month. Fitzgerald said half the proceeds would go to the airport authority to "reduce landing fees and maintain the facility" and the other half would be used for direct property tax relief.
Politicians across the state have been looking to cash in on the burgeoning interest in drilling for natural gas in the Marcellus Shale. And the county-owned airport sits in the western suburbs -- which is one of the more active markets for gas leasing.
There's just one problem: FAA regulations require that all proceeds from drilling on airport land to be reinvested into the airport. Funds are not currently allowed to be used for any other purpose -- property tax included.
Accroding to a March Associated Press report, for example, the city of Beaumont , Texas was waiting on more than $35 million in gas drilling royalties at its own airport. But though officials wanted to use the proceeds to patch a budgetary shortfall, the funds are still tied up.
Fitzgerald says he wants to negotiate with the FAA for a 50/50 split on the cash. If those talks don't succeed, he says, drilling at the airport likely won't happen.
"We'd have to take a look at what the options would be," Fitzgerald said. "But I would think if the taxpayers don't participate and don't benefit from the drilling revenues, it would be difficult to get that through county council."
Fitzgerald has said that any Marcellus Shale drilling would be competitively bid, and would have to have the approval of county council. Drilling on public land would also have to be thoroughly vetted through a public-hearing process, he says.
During the recent rollout of his airport plan and at recent debates, Republican challenger D. Raja has also acknowledged the FAA restrictions. But he doesn't regard them as a disincentive.
Raja's plan is to use the money to develop airport property into a "specialized business and research park known as the Innovation Zone... Revenue from the airport development could provide the county enough revenue to pay down the remaining debt on the international airport and in turn allow the county to lower landing and gate fees."
"All of the revenues from the airport have to stay t the airport and that's one of the reasons why I propose this innovation zone," Raja said. "It will at least allow us to get indirect results from the shale royalties.
Fitzgerald says if a deal can be struck with the FAA, it could mean as much as $36 million up front for the county, and another $10 to $15 million annually.
"I know the FAA wants to keep all of that revenue at the airport, but we're going to work with our congressional delegation and the FAA to see if we can split that," says Fitzgerald. "I think 50 percent of that money should stay at the airport, but I also believe 50 percent has to go to the taxpayers of Allegheny County for property tax relief."
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