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87 Percent Support Marcellus Shale Natural Gas Tax For Environment - Video Blog
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A coalition of environmental, conservation, and sporting groups; municipal officials and state legislators this week launched a campaign in support of a severance tax on natural gas drilling saying a new poll shows 87 percent of the public supports a severance tax if it benefits the environment.
 
“The breadth of support for conservation funding is astounding,” said Andy Loza, of the Pennsylvania Land Trust Association. “Support for the idea of dedicating severance tax revenues to conservation cuts across every region of the state and every demographic group. And that support also extends to dedicating a portion of gas lease revenues on public land to protecting our environment.”
 
 
Representatives of Pennsylvania’s oil and gas industry expressed concern about continuing calls for the imposition of a severance tax on natural gas extraction in Pennsylvania at this time, citing a number of factors that could combine to slow the development of the industry and the economic benefits it will provide across the Commonwealth. (See below)
 
The groups advocate that a portion of tax revenues should be dedicated to conservation, local governments dealing with environmental damage, and the Fish and Boat Commission and the Game Commission.
 
As part of the campaign, the group unveiled a recent statewide poll which showed that the majority of Pennsylvanians support taxing natural gas drilling, and nearly 9 out of 10 want a portion of the tax revenue used to protect Pennsylvania’s land, water, and wildlife.
 
“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 and 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. This poll shows that our citizens recognize that it is only fair that a portion of the severance tax goes to protect the environment.”
 
Douglas Hill, Executive Director of the County Commissioners Association of Pennsylvania agreed, saying, “Local governments are under increasing strain, and the Marcellus Shale drilling is exacerbating the problem.” Stressing that counties see this as more than a revenue issue, he continued, “Dedicating a small portion of the new severance taxes to help local governments dealing with the drilling operations and other environmental problems just makes good sense.”
 
"Implementing a severance tax is a no-brainer and failing to do so would be a no-gainer for Pennsylvania," said Rep. Bud George (D-Clearfield), Majority Chair of the House Environmental Resources and Energy Committee.
 
“Our Game Commission and Fish and Boat Commission are in difficult financial straits, constantly underfunded as they carry out their duty to protect our land and water,” said Rep. David Levdansky (D-Allegheny) Majority Chair of the House Finance Committee. “It is vital to remember that the commissions are charged under state law to protect and manage all species in the interests of all Pennsylvanians. Therefore it is appropriate and worthy to use a portion of the severance tax to invest in the work of the commissions to improve habitat and public access to our land and water, and to grow our burgeoning wildlife recreation industry.”
 
The statewide poll was conducted from February 28 - March 3 by the bipartisan polling team of Fairbank, Maslin, Maullin & Associates and Public Opinion Strategies.
 
In addition to municipal officials and state legislators, the members of the coalition include 10,000 Friends of Pennsylvania, American Farmland Trust, Appalachian Mountain Club, Audubon Pennsylvania, Berks County Conservancy, Central Pennsylvania Conservancy, Centre County Farmland Trust, Chesapeake Bay Foundation, Citizens for Pennsylvania’s Future (PennFuture), City Parks Association, ClearWater Conservancy, Countryside Conservancy, Delaware River Greenway Partnership, Delaware Valley Earth Force, E.L. Rose Conservancy of Susquehanna County, Eastern Pennsylvania Coalition for Abandoned Mine Reclamation, Eden Hill Conservancy, Foundation for Pennsylvania Watersheds, GreenSpace Alliance, Heritage Conservancy, Independence Conservancy, Kennett Township Land Trust, Keystone Trails Association, Lake Erie Region Conservancy, Lancaster Farmland Trust, Land Conservancy of Adams County, Lebanon Valley Conservancy, Montgomery County Lands Trust, Natural Lands Trust, Open Land Conservancy of Chester County, Pennsylvania Council of Trout Unlimited, Pennsylvania Federation of Sportsmen's Clubs, Pennsylvania Wildlife Federation, PennEnvironment, Pennsbury Land Trust, Pennsylvania Environmental Council, Pennsylvania Land Trust Association, Pennsylvania Recreation & Park Society, Philadelphia Water Department, Preservation Pennsylvania, Radnor Conservancy, Shermans Creek Conservation Association, Sierra Club Pennsylvania Chapter, Somerset County Conservancy, Susquehanna Greenway Partnership, The Conservancy of Montgomery County, The Nature Conservancy, The Trust for Public Land, Western Pennsylvania Conservancy, Wildlands Conservancy, Wissahickon Valley Watershed Association, Crossroad Gift & Thrift, Fjordstone Inc., J. W. Crouse Inc., Hometown Green, Montgomery Rehab Associates, Schmid & Company Inc., This Leaky House, and Veterinary Medical Specialists of Pittsburgh.
 
Oil and Gas Industry Concerns
 
Pennsylvania Oil and Gas Association President Stephen Rhoads urged caution in approaching any tax proposal that can influence investment decisions being made by exploration and production companies.
 
“In this economic environment, companies actively involved in the development of Marcellus Shale must carefully determine where their manpower, equipment and resources should be committed and operated for an extended period of time,” said Rhoads. “Pennsylvania is competing against states around the country for that investment, and a severance tax, imposed just as the industry is getting a foothold on this important shale development, will have a considerable negative impact on the state’s ability to compete with those states.”
 
“We must also be careful because a tax like this also could undermine the economic viability of the Commonwealth’s indigenous shallow gas industry,” Rhoads said. “All of Pennsylvania’s current production comes from economically marginal shallow wells. Producers operating these wells make a significant economic contribution to many rural Pennsylvania communities.”
 
Rhoads also emphasized the need to consider the efforts by the natural gas companies to work with communities and individual property owners regarding issues rather than attempt to mandate tax revenue be allocated to local governing bodies.
 
“Our industry works cooperatively with property owners and the communities in which we do business to provide compensation for equipment such as pipelines and support structure, doing so on a site-specific basis to understand and resolve concerns.,” he said. “Further, we have a strong track record and continuing commitment to repair and restore local roads that might be affected during the drilling process, building a relationship with local officials that typically results in improved road conditions and related facilities.
 
“More taxes are not the answer,” added Rhoads. “The number of onshore drill rigs in operation has decreased in the last year, and the price of gas, the availability of credit and the business environment faced by the drilling companies all will be factors in determining which states see drilling activity and the economic benefits it provides.”
 
The committee also presented information regarding comparisons being made by some organizations between Pennsylvania and West Virginia, which imposes a severance tax on natural gas extraction:
 
-- In the decade leading up to the year 2000, the number of wells drilled each year in Pennsylvania and West Virginia was nearly identical. Since that time, as natural gas prices trended higher, the number of wells drilled in West Virginia each year has been approximately half of the amount drilled in Pennsylvania.
 
-- The number of wells influences the number of workers employed. According to recent published reports, West Virginia supports 10,000 fewer jobs in the oil and gas industry than Pennsylvania, an employment rate that will continue to be influenced heavily by Marcellus Shale drilling activity.
 
-- Pennsylvania's shallow wells historically have produced smaller volumes of crude oil and natural gas, making them only marginally profitable. An additional tax on those shallow conventional wells, which are being drilled in many counties across the state, will have an extremely negative impact on that portion of the oil and gas industry.
 
 
 
 
 

3/20/2009

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