Friday, October 22, 2010

No tax on Drillers

Rendell calls gas severance tax dead this year

An effort to enact a state severance tax on natural gas production during the past 18 months ran into a dead end Thursday amid a round of political recriminations. Gov. Ed Rendell pronounced the push to enact a severance tax on natural gas production dead this year - a tacit recognition that the legislative session is effectively over until January and his term in office ends that month too. Rendell said the unwillingness of Senate and House Republican leaders to negotiate in good faith on a compromise tax is responsible for the breakdown.

The argument that a tax on gas extraction will chase away the drillers is laughable as just about every other state has one. The natural gas market is a world wide market just like oil. The gas extracted in PA doesn't stay in PA but is put onto the world market so consumers in the Commonwealth are already paying a severance tax to other states. The Pennsylvania Budget and Policy Center explains.

Across the country, 96% of natural gas is produced in states that have severance taxes. Pennsylvania, however, remains one of the only energy-producing states without one.

While some policymakers in Pennsylvania worry about the impact of a severance tax, studies in Wyoming, Utah and other states have shown that tax rates have little effect on natural gas production. Rather, drilling decisions are made based on the location of reserves and the expected price of natural gas.
This weekend, Pennsylvania will reach a new milestone - $100 million in revenue lost by the Legislature’s failure to approve a natural gas severance tax. The Pennsylvania Budget and Policy Center is tracking in real-time how much severance tax revenue has been lost since October 1, 2009 by not having a tax in place. View the Severance Tax Ticker here.

This is not surprising since we have the best legislature and candidates that money can buy.

The Money Game: Marcellus Shale Cash

It might seem odd that Kim Pegula, a self-described "homemaker" from Boca Raton, Florida, would donate $180,000 to help state Attorney General Tom Corbett become the next governor of Pennsylvania. ...To be sure, Ms. Pegula is no ordinary homemaker, but is responsible for an 8,000-square-foot, Tuscan-style estate in the exclusive St. Andrews Country Club that is currently on the market for $5.4 million... A study of reports filed with the Pennsylvania Department of State shows that in the 18-month period between January 1, 2009, and last June 30, drillers gave at least $751,762 to candidates-nearly triple their total of $276,802 for 2008.

One thing is very clear: the gas companies believe that their interests will best be served through the election of Republicans. Of the grand total of $1,028,564 contributed in 2008, 2009 and the first half of 2010, fully 82 per cent, or $843,884, went to Republican candidates.

Corbett accepted $311,803 in natural gas money
while his Democratic opponent in the Nov. 2 gubernatorial election, Allegheny County Executive Dan Onorato, took $94,000. State Auditor General Jack Wagner, who lost to Onorato in the Democratic primary, received $26,250.
For the record, Corbett opposes taxing natural gas, saying it would hurt a fledgling industry.

If this wasn't bad enough SRS points out that they not only don't want to tax this activity but want taxpayers to subsidize it.

Bill proposes State funding for marcellus infrastructure

Our environment is being raped in slow motion and the perps want us to pay for the pleasure. The water in Dimock has been poisoned by the gas drilling but Cabot Oil won't accept responsibility for its actions. Instead of making it right for the families affected Cabot pours money into the coffers of friendly politicians that will help them to avoid paying for the damage they have done and will do in the future. Yes, $12 million to build a water pipeline to service 16 families is madness. Expect more madness in the near future. The question is who will pay for the madness?

117th Democratic State Rep candidate Richard Shermanski sent this statement:

Shermanski Declares Death of Severance Tax Bill "Offensive"

The failure of the Pennsylvania legislature to enact a severance tax in the state was called "irresponsible" by Governor Rendell. Richard Shermanski, candidate for the 117th district, would also call it offensive. Given Pennsylvania's budget struggles, leaving a $70 million hole in the revenue plans is bad - but the issue of safety is another matter entirely.

"I'm committed to making sure that gas extraction is done safely. How can we make sure it's safe? We must have monetary reserves on hand to make sure that we can quickly respond to a disaster on the scale of the Gulf of Mexico oil spill we saw just months ago. A tax will put in a position to do just that," Richard said earlier today.

Richard said that House Republican leadership and their loyal foot soldier, Representative Karen Boback, had been more concerned about making sure the corporate interests were assured of higher profits
than safety of Northeastern Pennsylvanians.

"Pennsylvania will be the only mineral rich state in the country without a severance tax. The argument that a tax here would force companies elsewhere is absurd."

As we progress into the next legislative session, it's imperative that we tackle this issue. I want to pass this tax so that our commonwealth can improve financially - and, by extension, the lives of the citizens in Northeastern Pennsylvania will improve financially. Richard also said, "That House Republicans would look out for these out-of-district corporations over the potential safety of the families in the 117th and elsewhere is simply offensive."


Anonymous said...

Ms. Pegula and hubby Terrence also gave $88 million, the largest gift ever made, to PSU for a new hockey arena after selling their East Resources' Appalachian shale lands to Royal Dutch Shell for $4.7 BILLION. They still have 350,000 shale acres left here!! I am sure there is lots more dough for no-tax $$$Corbett$$$ if he becomes Gov. Voting has never been more important than this election.

Anonymous said...

If the Gas Drillers thought Onorato had a chance to win, they would have pumped just as much money into his campaign. Big money doesn't give to ideologues they give to who they think is going to win.
Just naive individuals believe anything else, all you have to do is look at the picnic thrown for a dem congressmen around Dimmock