July 2009 Vol. 236 No. 7

Government

Pennsylvania Looks To Marcellus Shale To Solve Budget Problems

Citizens for Pennsylvania’s Future (PennFuture), joined by House Majority Leader Todd Eachus (D-Luzerne), House Environmental Resources and Energy Committee Chair Camille “Bud” George (D-Clearfield), House Finance Committee Chair David Levdansky (D-Allegheny), Douglas J. Austen, Ph.D., Executive Director of The Pennsylvania Fish and Boat Commission (PFBC), Ed Troxell from the Pennsylvania State Association of Boroughs, Sharon Ward from the Pennsylvania Budget and Policy Center called for a severance tax on natural gas drilling, with portions of the tax invested in the land, water, wildlife, and the communities that bear the brunt of this drilling.

“The Marcellus Shale offers us a tremendous opportunity to expand our supply of domestic fuel and, through the proposed severance tax, bring revenue into the state, at a time when our budget forecasts are so dire,” said Jan Jarrett, president/CEO of PennFuture. “But it also offers a tremendous risk to the land, water, and wildlife that makes Pennsylvania so special. These drilling operations use millions of gallons of water and scar our land, at least temporarily. And, given that damage, it is only fair that a portion of the severance tax goes to protect the environment.

“The severance tax proposed is identical to the tax the drillers already pay in West Virginia,” said Jarrett. “Yet the drillers and their compatriots complain the tax will kill their ‘infant industry.’ Reality is far different. Drilling in the Marcellus Shale has been going on since 1995. The EPA has already permitted over 1,150 Marcellus wells; about 350 of those permitted wells have been drilled with about 100 already producing this liquid gold for huge multi-national companies. In addition, most of the companies are incorporated in such a way that they pay no corporate net income tax. And if they don’t find the severance tax onerous elsewhere, why here?”