Ask the governor and legislators -why are they letting gas companies give us the shaft

Posting our action alert on natural gas drilling in reaction to the Governor's suggestion that it is off the table during budget negotiations. Please contact him and state legislators!

Multi-billion dollar energy companies have spent $1 million in lobbying money in Pennsylvania this year to try to stop legislators from enacting a severance tax on natural gas extraction. Their money appears to be working, as the state budget negotiations are going forward without a severance tax.

These companies stand to make billions off of our natural resources, and yet Pennsylvania remains the only state with large operations that does not charge a severance tax. These fees can help to cover costs for damaged roads and bridges, contaminated drinking water and other environmental regulations. Instead, the legislature would foist those costs onto Pennsylvania taxpayers rather than force industry to clean up their own mess.

Tell Harrisburg enough is enough. Demand a severance tax -- that could bring hundreds of millions of dollars into the state coffers each year -- be included in budget negotiations.

Listen to PennFuture’s President and CEO Jan Jarrett explain how taxpayers lose, then take immediate action - before it’s too late.

It does strike me as odd

that if the gap between the State Senate on the one side and the House is one over revenue why Rendell would be offering eliminating a new revenue source from an extremely enviromentally destructive form of mining. How is that supposed to be a move toward solving the problem of a revenue gap? Less tax revenue but more environmental clean-up costs would seem to be a move away from balancing the budget. Maybe its just me.
MrLuigi, my cat, actually only types half as badly as I do.

Perhaps it has something to

Perhaps it has something to do with the $1 million that gas industry has spent in lobbying costs this year?

Had a recent car breakdown in Towanda, PA

After a camping trip.

Anyway, I had read that this Marcellus Shale gas exploration stuff was a big deal but had no idea how big a deal it was until I realized that a gas exploration company had entirely leased out one of I think two motels in the entire county. And my bad luck, it turned out to be the cheap one.

People don't realize the scale of investment and profit expectations going into this stuff right now.
MrLuigi, my cat, actually only types half as badly as I do.

Key Pa. House Democrats still backing the drilling tax

As the Allentown Morning Call's Harrisburg correspondent reported Monday:

<< House Democrats weren't toeing the administration's line this afternoon.

"We believe all revenue options should be in the mix," said Brett Marcy, a spokesman for House Majority Leader Todd Eachus, D-Luzerne. Marcy conceded that the state probably wouldn't see much money from a severance levy this year. But he argued the it would see major bucks over the next few years.

"We believe it makes sense for big oil and big natural gas to pay their fair share," said Marcy, whose boss, along with House Speaker Keith McCall, D-Carbon, represent voters deep in the heart of shale country. >>

And today, the chairman of the House Environmental Resources and Energy Committee issued this statement:
Rep. George: Fair tax on natural gas drillers is alive and well

<< "...after reading the governor’s entire remarks, I understood the reasoning and the pressures he is facing as he seeks compromises to reach a budget accord." ...

"I am going to press ahead with a severance tax through my House Bill 1489, perhaps with the idea that it will take effect April 1, 2010," Rep. George said. "This would give the industry time to prepare, and will avoid an even more super-heated political arena next year, when the governorship and the entire House is up for election.

"Revenue shortfalls in the billions of dollars are forecast for next year and in 2011, so a fair and reasonable severance tax is coming," Rep. George said. "I thank my House leadership, especially Speaker Keith McCall, for standing firm on this issue, which is one of fairness for Pennsylvania taxpayers.

"This is Round One," Rep. George said. "As the governor indicated, the fight is not over, and House Bill 1489 is alive and well." >>

(In the interest of disclosure, I work for state House Democrats.)

Thanks for the

petition link. Please keep us updated.

Among the many offenses, is the thought of how a state can promote so many taxes against its citizens through expanded gambling - from video poker to table games to downtown casinos - while letting billion dollar energy companies slide by.

Its popular to justify economic inequality as phony moralism

"We shouldn't unstack the deck against poor people because they are poor as a result of their lax morals". The belief in gambling addiction as a revenue source is based on viewing it as a way to tap into that of "letting the 'bad' people with gambling addiction problems pay". Its partially a way to tap into distrust of "people not like us" and partially a misguided belief that we have more of functioning meritocracy than we actually do.

Also regular people don't spend a million dollars in lobbying efforts, mining companies and the gambling industry do.

OK thats the morning teaspoon of cynicism for the day.;)
MrLuigi, my cat, actually only types half as badly as I do.

Only tangentally related

but Mike K. over at Rortybomb has a great post related to blaming poverty on the poor, by finding the roots of poverty (and wealth, for that matter) in people's genes, as stupid a right wing line of thinking as anything else that links them to the ideas of Berlin circa 1935.

As commenter Ed notes:

It is mind-boggling how economists are unable to process simple causal relationships like “I bet parents who have more income can afford expensive private schools and SAT prep courses.” Nope. They always have to leap straight into eugenics.


So don't mess with those virtuous Marcellus Shale gas magnates by taxing them; you'd be screwing around with Nature and the Natural Order of Things.

Right because "Natural Order" = Big Oil, Big Gas

In fact its so "natural", it justifies a tax holiday for folks who profit by tearing open the sides of mountains and dumping toxic runoff in our streams and rivers. Ouch, did I say that?

BTW - are we really on of the only states in the union that doesn't tax mining even though when mining companies screw up the environment, it falls on taxpayers to clean up the mess? That's idiotic public policy.
MrLuigi, my cat, actually only types half as badly as I do.

Why NatGas Prices are so Low Right Now

It's not really because of the new gas finds, but because recent developments in drilling technology came online within the past 5 years and have all kicked up production simultaneously while at the same time there's been a lot of investment in LNG storage above and below ground.

That's flooded the market with gas at the same time a ton of people are cutting back on gas because it was starting to get too expensive for consumers to use relative to electricity and George Bush's efforts to re-energize (and subsidize) the coal industry which came back to life while he was president.

NatGas production for power stations hasn't changed much over the years so that's considered a constant.

Since part of my retirement fund is invested in NatGas, I watch this market for opportunities. I've been long Kinder Morgan (biggest NG pipeline owner in the US) and now I'm considering shorting it because of the NatGas price crash that's apparently ahead.

Even if we do want to start throwing on taxes on NG extraction, the development for the short-term is going to be muted because the prices of this commodity are just simply too low and are expected to go even lower.

Helen is right

Pennsylvania is the one of only states in the union that does not tax mineral extraction. And by not taxing Marcellus Shale gas extraction that means the state has to look to other revenue streams - which makes turning to streams like casinos and video poker all that more absurd. This type of extraction is taxed everywhere else in the country.

The two issues should be linked, more often.
MrLuigi, my cat, actually only types half as badly as I do.

my problem with what the governor said

This whole silly notion that it's a "new industry." It's not new at all. These companies have been building rigs in other states for years now. Moving here is nothing new for them. If they need to reach a new location in Texas, they do the leasing, do the tests, move the rigs and build the well.

All a new state means is slightly different laws to do the same process. It's silly. It's not a new industry at all and waiting to tax it means we miss the most productive period of the well, the very start.

I do diverge from PennFuture a bit, tho. I'm all for using part of the money to fund conservation efforts that have been de-funded, but the first priority should be using it to pay for the prevention that will prevent well sites from turning into superfund sites. Folks I know have said that when there are inspections it doesn't seem to louse up ground water, so let's use some money to hire more people to watch.

This Too Will Pass, for the guts in your cerebrum.

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