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Ed Rendell’s Frack Attack

2:22 pm in Uncategorized by ThirdandState

By Sharon Ward, Third and State

Former Governor Ed Rendell got into some hot water last week with an op-ed in the New York Daily News touting the economic benefits of hydrofracking. ProPublica quickly outed the Governor for his ties to the drilling industry, and Rendell owned up to the fact that he is a consultant to Element Partners, which has investments in the gas industry. The Daily News has added a note to its web site disclosing the financial arrangement.

Rendell’s piece touts the industry’s economic benefits, repeating the claims of an IHS/U.S. Chamber of Commerce analysis that the Pennsylvania Budget and Policy Center critiqued back in December for overstating the employment and tax benefits of shale.

The natural gas industry in Pennsylvania is like a new baby: it’s tiny but gets all the attention. Through a coordinated and well-financed public relations effort (remember My Range Resources?) and a legion of lobbyists, the industry has given an impression of its importance that just doesn’t square with the facts.

In 2012, the natural gas industry provided one-half of one percent of all jobs in Pennsylvania. The IHS report claims the industry contributed $900 million in state and local corporate tax revenue, one-third of all corporate taxes collected by the state in 2012, but the Department of Revenue puts the number at less than one-fifth of that amount (see Table 2).

Don Gilliland of The Patriot-News made a similar point in a column after a Chamber of Commerce event in Harrisburg in July, announcing a multi-million dollar “Shale Works for Us” public relations campaign. Gilliland ripped into the industry for stating — in a promotional effort the sponsors claimed was designed to “get out the facts” — that shale created 140,000 jobs in 2010 alone, while the Pennsylvania Department of Labor and Industry reported just 23,618 shale jobs since 2008. (The Chamber numbers came from the infamous “Penn State” study that Penn State subsequently disowned — see here and here).

So why does this matter? The industry cleverly uses this economic promise to beat back regulation or any other attempt to limit or manage natural gas development. Gilliland cleverly gets the chamber spokeswoman Karen Harbert on record about its strategy, to use its PR effort to “ensure no hindrance or regulatory barriers” to natural gas drillers.

Rendell urges New York Governor Andrew Cuomo to seize the opportunity that gas drilling provides, but Cuomo should use Pennsylvania as a cautionary tale rather than a guide. The economic benefits of gas development in Pennsylvania have been routinely overstated, while its costs have been minimized or ignored. The hype has only served to undermine reasonable environmental and land use restrictions necessary to blunt the short-term impacts and limit long-term harm.

Marcellus Shale Update in PA: Giving Away the Store

1:41 pm in Uncategorized by ThirdandState

A blog post by Michael Wood, originally published at Third and State.

While the Pennsylvania Senate has delayed a vote on a Marcellus Shale drilling fee, state House Republican Leaders are trying to build support for a fee plan that looks a lot like Governor Corbett’s proposal.

On Monday, the Pennsylvania Budget and Policy Center crunched the numbers and found that the Corbett plan would give Pennsylvania one of the lowest drilling tax rates among major energy-producing states.

The average Marcellus Shale gas well is projected to generate $16 million over its 50-year life. The Corbett plan would generate $160,000 in revenue per well — an effective rate of 1%. A comparable well in Texas would raise $878,500 – five times more than Governor Corbett’s plan.

We also looked at three other leading drilling tax and fee proposals before the General Assembly. The effective tax rates for those and the Corbett plan range from 1.0% to 4.7%.

Plan Total Fee/Tax Revenue Effective Fee/Tax Rate
Scarnati: SB 1100 $505,000 3.1%
Quinn: HB 1700 $710,000 4.4%
Murt/DiGirolamo: HB 1863 $770,000 4.7%
Corbett/Ellis $160,000 1.0%

Other shale gas states ask much more from drillers.

State Drilling Tax Revenue Effective Tax Rate
Arkansas $555,700 3.4%
Texas [2] $878,500 5.4%
West Virginia $993,700 6.1%




A message for state lawmakers: Don’t give away Pennsylvania’s future with a weak drilling fee/tax bill.

Making the Case for Better Marcellus Shale Protections and a Drilling Tax in Pennsylvania

1:13 pm in Uncategorized by ThirdandState

Map of Marcellus Shale (graphic: chuckchuckchuck)

A blog post by Chris Lilienthal, originally published at Third and State.

Before this busy week slips by, I wanted to highlight two things of note related to drilling in the Marcellus Shale in Pennsylvania.

First, on Monday, the Citizens Marcellus Shale Commission released its final report and recommendations. It couldn’t have come soon enough, as the state Senate began moving Marcellus Shale legislation this week.

Over the last three months, more than 500 people have weighed in with the Commission on their concerns and suggestions to better protect local communities and the environment from the negative impacts of drilling. Many citizens testified that Marcellus Shale drilling has moved too quickly and that public officials entrusted to protect their constitutional right to clean air and water have let them down.

The Pennsylvania Budget and Policy Center was one of the eight civic and environmental organization that came together to form the Citizens Commission. You can read more about the report at our web site.

On Tuesday, PBPC also participated in a press conference with Representatives Gene DiGirolamo, Tom Murt and Mike Sturla, along with advocates for the environment, education and working families, to call for drillers to pay their fair share.

Several speakers observed that there is strong public support for a drilling tax in Pennsylvania that protects the environment and invests in Pennsylvania’s future, including the education of our next generation.

Representative Murt put it best when he explained why he is sponsoring a Marcellus Shale tax bill in the state House with Representative DiGirolamo and a long list of co-sponsors from both parties: “I was motivated not only by a desire to make sure our gas drillers pay their fair share but to make sure this thriving industry contributes to making Pennsylvania a better place.”

“Almost every other state that is taking Marcellus Shale gas out of the ground does already have some type of tax,” said Representative DiGirolamo. “We in Pennsylvania do not as of yet. … We’re trying to figure out what’s best for Pennsylvania.”

Things will start to move fast next week as the Senate votes on its Marcellus bill. Check out the Better Choices for Pennsylvania web site to see how you can help.