04/15/24 - 66 New Stories - REAL Environmental & Conservation Leadership In PA: http://tinyurl.com/msuwtctm
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House Republicans Unveil State Forest Marcellus Shale Leasing Proposal - Video Blog
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The House Republican Energy Task Force this week unveiled the "Energize PA" plan to expand natural gas drilling on 390,000 additional acres of state forest land during the next three years.
The proposal would provide an additional $260 million per year for state and local governments and conservation districts while promoting the creation of 7,000 new private-sector jobs in Pennsylvania's emerging Marcellus Shale natural gas drilling industry.
The Pennsylvania Budget and Policy Centercommented on the proposal saying it was not viable alternative to a severance tax because it allows drillers on private lands, but far the most areas where drilling occurs, to avoid paying anything back to the communities involved and for environmental restoration.
The Marcellus Shale Committee, representing the drilling industry, issued a statement supporting the proposal.
“I believe our plan is superior to the governor’s, not only in its potential to yield more revenue and jobs, but also in the sheer fact that it does not present a tax burden for anyone. Under the governor’s plan, individual landowners will pay the energy tax," said House Minority Leader Sam Smith (R-Jefferson). "These folks are already paying income taxes on royalty payments. They will be taxed twice if the governor’s energy tax is assessed, and that is just not right.
“Our plan ensures that the revenues from the leasing of the state forest land support not only state government and the deficit we face, but also the host of local governments and conservation districts charged with supporting local infrastructure and conserving the environment.
“The discovery of the Marcellus Shale formation has created unprecedented opportunity for Pennsylvania’s citizens and businesses. We need to look carefully at how we manage the extraction of this natural resource in order to ensure the process is fair to everyone involved. I believe the plan we put forth today represents a step in the right direction.”
Video Blog: Rep. Smith Introduces Proposal
"My bill is about promoting job creation at a time when our state's workers are suffering the consequences of a national economic downturn," said Rep. Dave Reed (R-Indiana), prime sponsor of the legislation - House Bill 1050 - and one of two co-chairs of the House Republican Energy Task Force. Video Blog: Rep. Reed Outlines Specifics of Proposal
"During these difficult economic times, we need to enact state policies that will encourage job growth in the private sector," said Rep. Tina Pickett (R-Bradford), a co-sponsor of the legislation and the other co-chair of the House Republican Energy Task Force.
The proposal would directly result in the creation of 7,300 new private-sector jobs during the next decade. This is a stark contrast to the potential effects of a new tax proposed by the governor in February, which experts predict could cost Pennsylvania approximately 53,000 jobs during the next five years.
"We're looking at a net difference of 60,000 jobs between our plan and the governor's proposal," Rep. Reed said. "The question we need to ask is, do we want to gain jobs or lose them?"
Rep. Reed's bill would lease 130,000 acres of state forest land to natural gas drilling companies in the upcoming year. Another 130,000 acres would be made available in each of the following two years for a total of 390,000 acres during the next three years.
The legislation would establish a minimum bid payment of $2,000 per acre. With 130,000 acres available per year, that would bring in approximately $260 million per year. That money would be split among the state, municipal governments and conservation districts.
Of the total amount, 80 percent - or approximately $208 million - would go toward filling the state's projected $2.3 billion budget deficit. Local governments that host existing natural gas, oil or coal shallow well drilling sites would share 12.5 percent - or $32.5 million - of the money. Local governments that host new Marcellus Shale drilling operations would share 2.5 percent - or $6.5 million - of the money. Conservation districts across the state would share the remaining 5 percent - or $13 million - to pay for programs that protect the environment.
The lawmakers say the local government share of the money is important because natural gas drilling operations often have a significant impact on local budgets. The local funding share of the revenue would be split evenly between the host county and the host municipality. Reed's proposal would provide local governments with the money they need to maintain important infrastructure, including roads and water systems.
In February, Gov.Rendell proposed adding a new severance tax to natural gas drilling operations in Pennsylvania. A new tax would make it less attractive for natural gas drilling companies to expand their operations in the Commonwealth, leading to fewer job opportunities for Pennsylvania workers.
"We have an industry that wants to grow here and create more jobs and the governor responded by putting up a roadblock," Rep. Reed said. "The governor travels across the state handing out cardboard checks to corporations that promise to deliver jobs. Now, we have an employer that isn't asking for any money from the Commonwealth and the governor wants to tax them!"
"If any other industry was promising to create 100,000 new good-paying jobs over the next decade, the governor would be holding a news conference to hand them cardboard checks financed with taxpayer dollars," Pep. Pickett said. "Why is he threatening to kill these new jobs with a severance tax?"
The Energy Task Force members say their proposal renders unnecessary the governor's call for a new severance tax on the natural gas industry. The governor's severance tax proposal, which he made in an effort to fill the $2.3 billion state budget deficit, would provide only $107 million compared with the $208 million under the Energy Task Force's proposal. The governor's severance tax proposal also includes no money for local governments or conservation districts.
"My bill provides more money for the state, new dollars for local governments and conservation districts and would not jeopardize job opportunities in this emerging industry," Rep. Reed said. "In all three important areas - revenues, the environment and jobs - our plan is better."
The House Republican Energy Task Force, co-chaired by Reed and Pickett, is made up of the following Republican House members: Karen Boback (R-Columbia/Luzerne/Wyoming), Keith Gillespie (R-York), Jim Marshall (R-Beaver), Dave Millard (R-Columbia), Mike Peifer (R-Monroe/Pike/Wayne), Chris Ross (R-Chester), and RoseMarie Swanger (R-Lebanon). The task force is one of several that were created by the House Republican Policy Committee, which is chaired by Rep. Stan Saylor (R-York).
The task force held informational meetings with natural gas industry experts and executives to develop a workable proposal that would provide revenue for the state, local governments and conservation districts without enacting a new tax on natural gas companies.
Drilling Industry Reaction
The Marcellus Shale Committee, the Independent Oil and Gas Association of Pennsylvania and the Pennsylvania Oil and Gas Association issued the following joint statement today regarding the introduction of House Bill 1050 to increase leasing opportunities on state forest land and provide millions of dollars in revenue from that activity to local conservation districts, municipal governments and the Commonwealth.
"Significant natural gas reserves can be found in Pennsylvania's state forest land, and the opportunities it can create for new jobs and new revenue for state and local government and conservation districts is even more significant. This industry is poised to develop these gas reserves responsibly and in cooperation with the state Bureau of Forestry and the Department of Conservation and Natural Resources. Advances in technology, including the development of multiple wells from a single pad and horizontal drilling techniques allow for a far more efficient means of securing natural gas reserves, impacting fewer acres in development, a reduced number of roads to access this single location, fewer gathering pipelines and far less surface disturbance.
"Leasing 130,000 acres of land for three years amounts to less than 20 percent of the state's total forest resources, and will produce an indigenous source of clean energy and provide good-paying jobs to thousands of people. The distribution of funding from leasing and royalty payments among local and state governments and conservation districts ensures that revenue is directed where it can meet the needs of communities and programs that protect the environment.
"This approach to create sustainable, long-term revenue for the Commonwealth through responsible leasing of land is sound and deserves the support of the legislature." PA Budget and Policy Center
Sharon Ward, director of the Pennsylvania Budget and Policy Center, issued the following statement in reaction to the Republican proposal-- "Natural gas drilling in the Marcellus Shale comes with substantial environmental costs for state and local governments that should be paid by those who profit from this industry. The House Republican Energy Task Force proposal allows drillers to avoid this tax by increasing drilling on public lands and increasing the risk of contamination of public waterways—resources that support wildlife and the state's tourism industry.
"A severance tax, like the one proposed by Governor Ed Rendell, is the most sound vehicle to ensure that the high cost of natural gas drilling, including new wastewater treatment plants, environmental monitoring and road and bridge improvements, are not left to taxpayers to shoulder. Natural gas drillers already pay severance taxes in 27 gas-producing states across the United States. The task force's proposal is another example of knee-jerk anti-taxism that rejects any tax regardless of the need or merit.
"Every new gas well requires more than three million gallons of water, which is contaminated in the mining process and must be appropriately handled to safeguard public water supplies. Mark Wilson, a marketing manager with GE Water & Process Technologies, called the Marcellus Shale water 'the worst on the planet.' Lawmakers would better serve the public by protecting Pennsylvania's natural resources and ensuring that groundwater is safe for citizens and for water-dependent industries.
"As the state works to balance next year's budget amidst a recession and a multi-billion dollar budget shortfall, a severance tax is necessary to prevent cuts in education, health care for senior citizens and public safety. It is also necessary to stop property taxes from increasing to compensate for declining state support.
"Pennsylvanians want to see their representatives protect our natural treasures and act responsibly about serious environmental and fiscal issues. The House Republican energy plan misses the mark on all those fronts."
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3/27/2009 |
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