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March 14, 2013

Fracking foes hope Madigan can sway lawmakers

(Continued)

The regulatory bill would require oil and gas companies to test water before and after drilling, hold them liable for contamination and require disclosure of fracking chemicals as well as air and water pollution controls. Madigan's office helped negotiate and draft the bill.

Gov. Pat Quinn has called the legislation a "jobs bill." Studies have estimated up to 40,000 jobs could be created in southern Illinois, where energy companies are eyeing the New Albany Shale, a formation roughly 5,000 feet below the surface.

Industry, lawmakers and the governor's office have been negotiating how much money energy companies would pay to help support a regulatory program, and how much they might pay in extraction, or "severance," taxes. Illinois currently does not impose taxes on coal, gas or oil extraction.

But high-volume drilling has not yet begun in Illinois, so that offers a chance for the state to make some money from the outset if the regulatory bill is passed. Many other states have imposed similar taxes on fracking, and Madigan last year floated the idea of a 12 percent extraction tax, though those involved in negotiations say that number has since been whittled considerably.

"Madigan's office ... has made sure that a very tough regulatory bill was produced," said Allen Grosboll, a legislative director at the Environmental Law and Policy Center. "On the other hand, the speaker continues to wield the threat of a moratorium and in doing so, I think he is ensuring ultimately agreement both about tough regulations and about revenue."

Mark Denzler, vice president of the Illinois Manufacturers' Association, said he was surprised that Madigan endorsed a moratorium. He said such a ban, even if temporary, "would jeopardize the compromise we reached, as well as revenue and jobs for Illinois."

Denzler said a tentative deal was reached Wednesday on fees and taxes, and he expected them to be included in an amendment to the regulatory bill.

 

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