The shale gas industry and allies of Gov. Wolf ratcheted up
rhetoric this week over a key component of the state’s stalemated budget
debate: Imposition of a severance tax on natural gas production, Andrew Maykuth
reports in the Philadelphia Inquirer.
rhetoric this week over a key component of the state’s stalemated budget
debate: Imposition of a severance tax on natural gas production, Andrew Maykuth
reports in the Philadelphia Inquirer.
The Marcellus Shale Coalition says the proposed tax is the
harshest in a series of hostile actions the Wolf administration has taken
against the gas industry, one of the state’s better-performing economic sectors
in the last decade.
harshest in a series of hostile actions the Wolf administration has taken
against the gas industry, one of the state’s better-performing economic sectors
in the last decade.
“Since Gov. Wolf was elected, he has been talking about this
industry being successful, but his actions really don’t match the words,”
said David Spigelmyer, president of the coalition. He characterized Wolf’s
manner as a “my way or the highway” approach.
industry being successful, but his actions really don’t match the words,”
said David Spigelmyer, president of the coalition. He characterized Wolf’s
manner as a “my way or the highway” approach.
The Democratic governor is calling the severance tax a mechanism
to fund schools. The tax on gas production would generate $1 billion in its
first full year, most of which would go to education.
to fund schools. The tax on gas production would generate $1 billion in its
first full year, most of which would go to education.
But $225 million
of gas-tax revenue would replace the current shale impact fee, which is
assessed on a per-well assessment and mostly goes to drilling communities.
About $10 million of the severance tax would pay for more drilling enforcement.
of gas-tax revenue would replace the current shale impact fee, which is
assessed on a per-well assessment and mostly goes to drilling communities.
About $10 million of the severance tax would pay for more drilling enforcement.
An additional
$55 million of the severance tax revenue would pay off a proposed $675
million state economic development bond issue, of which $225 million would be
allotted to energy projects, mostly renewable energy.
$55 million of the severance tax revenue would pay off a proposed $675
million state economic development bond issue, of which $225 million would be
allotted to energy projects, mostly renewable energy.
The shale-gas
coalition objects that the gas industry would subsidize competing green-energy
projects.
coalition objects that the gas industry would subsidize competing green-energy
projects.
“A bill of
goods has been sold here that this is all about school funding, and frankly
it’s more about picking winners and losers and funding a broader environmental
activist agenda,” Spigelmyer said.
goods has been sold here that this is all about school funding, and frankly
it’s more about picking winners and losers and funding a broader environmental
activist agenda,” Spigelmyer said.
 |
| Pennsylvania Gov. Tom Wolf |
The governor’s
team says the trade group does not speak for the entire industry. John Hanger,
Wolf’s policy chief, said some industry executives recognize the need for a
severance tax to spread shale-gas benefits across the state.
team says the trade group does not speak for the entire industry. John Hanger,
Wolf’s policy chief, said some industry executives recognize the need for a
severance tax to spread shale-gas benefits across the state.
“We had
more than a few companies coming to Pennsylvania who were amazed that we had no
[shale gas] severance tax,” Hanger said of his time as environment
secretary in the Rendell administration. “Privately, they thought
Pennsylvania was being a chump for not having one.”
more than a few companies coming to Pennsylvania who were amazed that we had no
[shale gas] severance tax,” Hanger said of his time as environment
secretary in the Rendell administration. “Privately, they thought
Pennsylvania was being a chump for not having one.”
The sniping is
occurring amid a surge in rival ad campaigns over the state budget standoff.
Wolf on June 30 vetoed a Republican budget that did not include a severance
tax. Until the impasse is resolved, the state has no budget.
occurring amid a surge in rival ad campaigns over the state budget standoff.
Wolf on June 30 vetoed a Republican budget that did not include a severance
tax. Until the impasse is resolved, the state has no budget.
An affiliate of
the Democratic Governors Association, whose biggest source of funding is
public-employee unions, last week launched commercials bashing the vetoed GOP
plan as letting the oil and gas industry off the hook, underfunding education,
and deepening the state’s deficit.
the Democratic Governors Association, whose biggest source of funding is
public-employee unions, last week launched commercials bashing the vetoed GOP
plan as letting the oil and gas industry off the hook, underfunding education,
and deepening the state’s deficit.
On Monday,
Americans for Prosperity, an advocacy group founded by the billionaire energy
executives Charles and David Koch, kicked off a radio campaign that says Wolf
is “cooking up schemes to hike your taxes.”
Americans for Prosperity, an advocacy group founded by the billionaire energy
executives Charles and David Koch, kicked off a radio campaign that says Wolf
is “cooking up schemes to hike your taxes.”
The shale
coalition says the severance tax is only one of several unfriendly actions Wolf
has taken.
coalition says the severance tax is only one of several unfriendly actions Wolf
has taken.
Wolf remade the Oil and Gas Technical Advisory Board, not to the industry’s
liking. It imposed stricter gas-drilling regulations, which the industry says
would raise costs without increasing environmental protections.
Related news stories:
Was this of value to you? Click here for free updates
The social media icons below make it easy to share
Recent blog posts:
