On behalf of the 5,000 member businesses and organizations — employing 140,000 people — the Greater Lehigh Valley Chamber of Commerce recognizes the economic benefits and opportunity for energy independence that shale gas formations can bring to Pennsylvania’s businesses, commerce and communities.
What does the Marcellus Shale industry mean to the Lehigh Valley and all of Pennsylvania?
Aside from a handful of groups that rely on permanent crisis for support, people in this state realize the importance of this new energy resource. The natural gas being extracted from the shale two miles underneath us is providing jobs, energy independence and, to the surprise of many, tax revenues — $1.4 billion in state and local taxes during 2009-10 alone.
Some critics talk about how Gov. Tom Corbett should make the drillers “pay their fair share.” But what does this term, “fair share,” mean?
Is it the more than $76 billion that shale gas contributed to the gross domestic product in 2010 that is expected to increase to $231 billion in 2035?
Or the 600,000 jobs the industry supported in 2010 — expected to grow to more than 1.6 million by 2035?
Or is it the spinoffs that have created a boom in support industries, ranging from engineering to environmental services to pipe manufacturing to residential and commercial construction?
When critics say “fair share,” they mean they want dollars from the prosperous gas industry to pay or subsidize other industries and projects. Some critics are falsely saying the state is providing billions in subsidies to the fossil fuels industry. Some are saying to focus subsidies on expensive renewable sources of energy. But what about the impact on commonwealth families?
Philadelphians are already enjoying lower energy bills. In the Lehigh Valley, engineering firms and support businesses are expanding because of jobs in the Marcellus fields — while reducing carbon emissions. With record low prices and home heating bills that have dropped by 40 percent this winter, some folks still think another tax will solve our problems.
On behalf of the 5,000 member businesses and organizations — employing 140,000 people — the Greater Lehigh Valley Chamber of Commerce recognizes the economic benefits and opportunity for energy independence that shale gas formations can bring to Pennsylvania’s businesses, commerce and communities. We also understand the need to protect our environment, natural resources and infrastructure from adverse consequences from developing and extracting shale gas.
What “fair share” should mean is a per-well impact fee — precisely the approach the Corbett administration and the Legislature have been discussing — not an additional tax. The impact fee would focus money on the towns and counties that actually host the drilling sites, ensuring repairs for wear and tear on the area and underwriting increased environmental enforcement.
But the value of the industry extends beyond the impact fee. As a jobs report by President Obama’s administration put it: “Of the major fossil fuels, natural gas is the cleanest and least carbon-intensive for electric power generation. By keeping domestic energy costs relatively low, this resource also supports energy intensive manufacturing in the United States.”
The Chamber believes that an impact fee on natural gas extracted from shale gas formations should be established, subject to the following conditions:
- This fee should be used solely to address direct and indirect impacts, both present and future, associated with natural gas extraction. This includes, but is not limited to, remediation of environmental contamination, infrastructure repair and maintenance, public safety issues, and increased regulatory agency costs associated with properly overseeing the associated industries, and a reasonable fund to address non-recoverable and unexpected costs that are not otherwise covered by responsible parties.
- This fee should be imposed, collected and managed at the state level so that all impacts, including those that may occur “downstream” from well locations, may be addressed in an equitable and consistent manner.
- Funds raised through this assessment should not be added to the state’s general fund nor be available for any other purpose, but instead should be set aside in a trust fund and used solely for purposes outlined above.
Slowly, everybody’s catching on. In Pennsylvania, we got this one right. The Chamber encourages its current and future members to explore the business opportunities Marcellus Shale presents to Pennsylvania.
The members of the Greater Lehigh Valley Chamber of Commerce are committed to working with Gov. Corbett’s administration, our public officials and the gas industry to ensure all Pennsylvanians prosper and grow for generations to come.
T. Anthony Iannelli is president and CEO of the Greater Lehigh Valley Chamber of Commerce.
NOTE: Click HERE to view this column online.