MSC Statement on Pa. Shale Development

Pittsburgh, Pa. – In response to massive new tax proposals touted by candidates in Pennsylvania’s gubernatorial campaign, the Marcellus Shale Coalition released the following statement on behalf of its member companies:

“Over the past four years, our organization has worked to foster a constructive dialogue with policymakers on a bipartisan basis at all levels of government. It’s a commitment that will continue because affordable energy, economic growth and prosperity must transcend politics.

“This common sense and collaborative approach is on display across the Commonwealth, where Democrats, Republicans, labor and industry are coming together to breathe new life into the refineries in Philadelphia, the manufacturing base throughout the state, and communities reaping record revenue through the impact fee. Across Pennsylvania, farmers are prospering, small towns and small businesses are thriving, and for the first time in recent memory, many communities have a greater sense of hope thanks to responsible, tightly-regulated natural gas development.

“Not only is shale development generating huge amounts of revenue – more than $1.8 billion in state taxes and more than $400 million in impact fees paid to date, along with supporting nearly a quarter-million Pennsylvania jobs, but it is supporting vital local projects and priorities across the Commonwealth. One of the many projects benefiting from impact fee revenue across the state is $3.4 million directed to bridge repairs in Montgomery County. This is in addition to the $750 million shale producers have invested in road and infrastructure improvement projects. What’s more, shale development, according to a recent IHS study, is increasing U.S. household incomes by an average of $1,200 in 2012 alone.

“Unfortunately, some candidates for office have embraced misguided, job-crushing policies that would throw a wet blanket on this positive, widespread progress. Specifically, these candidates refuse to recognize or acknowledge that other major energy-producing states with a severance tax do not have a corporate net income tax or have far more competitive corporate tax structures than Pennsylvania’s, which has among the nation’s highest rates. Further, states with severance taxes have capital recovery periods, and thus revenues are not generated for a number of years. Pennsylvania’s impact fee, however, is paid immediately. Given these clear facts and economic realities, massive new energy taxes – in addition to the already enacted impact fee – would without question result in less capital investment into the Commonwealth, fewer jobs and even less revenue generated for the citizens of Pennsylvania.

“More than 100 rigs were operating in Pennsylvania in 2012. Yet today, given low natural gas prices and the increasing number of competitive shale plays across the country, there are roughly 50 rigs operating. To be sure, new energy taxes will reduce development in Pennsylvania, and more capital – not less – will be directed to other states or countries. Every square inch of the Commonwealth is benefiting from this generational opportunity. It would be irresponsible and ill-advised to advance massive new energy taxes that would strike an unnecessary blow to one of our economy’s most important, thriving and promising sectors.”

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