Shale Creating Local Benefits, Strengthening America

As the USA Today recently reported, “USA now produces more natural gas than any other country” in the world — and Pennsylvanians, in all 67 counties, are “capturing the benefits from responsible shale development,” especially as more clean-burning natural gas is used to power our economy.

These benefits are boosting American security. As the New York Times reports: “Had the shale boom never happened, the United States would currently import more than 10 billion cubic feet of natural gas a day, tightening world supplies. Now the country is poised to export that much as liquefied natural gas by 2020.”

Shale benefits are also being realized locally, through expanded revenues and a strong local workforce which will provide jobs for years to come. And as Department of Community and Economic Development Secretary Alan Walker has stated, Pennsylvania’s “growth is being fueled by the Marcellus Shale industry.”

Broadening and sustaining these benefits, however, requires regulatory certainty and a competitive business climate. And local officials are speaking out about proposals to enact new, job-crushing tax hikes that would make Pennsylvania less competitive. The Tribune-Review reports this under the headline “Community officials worry enacting Pa. shale gas tax will diminish impact fee revenue” today:

“They see a golden goose and want to strangle it,” said Washington County Commissioner Larry Maggi, a Democrat whose county received $4.7 million in impact fees last year — the second-highest total among counties — in addition to about $8 million that went to communities there. “That money should come back to the communities, the county and the area that’s being impacted,” he said. “I’m very much against the money going elsewhere.”

If it all goes to the state, we’d have to beg money from them,” said Chuck Morris, Democratic chair of the commissioners in Greene County, which got nearly $3 million in impact fees last year in addition to $4.7 million that went directly to communities there.

“People look at gas and say that’s big bucks. But it’s also having a tremendous impact on the economy here,” said Butler County Commissioner William L. McCarrier, a Republican. “I don’t want to tax something to the point that we drive it out.”

Maggi said he told gubernatorial candidates his feelings about the fee when they visited Washington County and he plans to talk with lawmakers. Candidates have yet to visit Lawrence Township in Clearfield County, which last year topped all municipalities with $797,000 in impact fees collected.

I am personally concerned,” said township Supervisor Dan Mitchell, a Democrat. “If it wasn’t for that money, we wouldn’t have been able to do a lot.”

Here’s what else they’re saying:

IMPACT FEES BENEFIT LOCAL COMMUNITIES

  • Energy “companies pay $630M in Pa. drilling fees”: Anadarko Petroleum, Chesapeake Energy and others will pay the state of Pennsylvania about $225 million in fees this year for drilling in the gas-rich Marcellus Shale. The fees, enacted in 2012, flow to local governments to fund basic needs like bridges, roads, firefighting equipment and environmental programs. By the end of the year, the recurring charges on nearly 6,500 natural gas wells will have brought more than $630 million to state coffers. (Houston Chronicle, 4/8/14)
  • “State’s Drilling Fee Revenue” Boosted: Pennsylvania’s drilling fee revenue is expected to increase by nearly 11 percent this year, as higher natural gas prices triggered higher fees that deep-shale drillers must pay to the state. Data released by the PUC on Friday show the state expects to collect $224.5 million in 2014 through Act 13’s impact fee assessed on unconventional wells. The state collected $406.7 million in 2012 and 2013. … The majority of Act 13 funds are directly distributed to counties and municipalities all across the state for a variety of environmental, public safety, infrastructure, emergency response and other authorized uses. (Pittsburgh Tribune-Review, 4/4/14)
  • Pa. Natural Gas Impact Fees to Generate More Than $630 Million: By the end of 2014, Act 13 impact fees will generate more than $630 million since the legislation’s passage in 2012. … “We are building a stronger Pennsylvania by harnessing our abundant resources to create jobs for working families, reinvest in our local communities, and protect our environment for generations to come,” [Gov.] Corbett said. … The state expects to collect $224.5 million in 2014 through Act 13’s impact fee, according to data released Friday from the PUC. This is in addition to the $406 million collected in 2012 and 2013. (Pittsburgh Business Times, 4/4/14)
  • Pa. to Collect $224.5 Million in Natural Gas Impact Fees: Pennsylvania expects to collect impact fees totaling $224.5 million this year for unconventional shale gas wells. … The 2013 total surpasses impact fee collections of $204.3 million for 2012 and the $204.2 million for 2011. … More than half of the impact fee revenue is distributed by the state PUC to municipalities and counties where gas drilling is taking place, and can be used for environmental, public safety, road and bridge repairs and emergency services. Impact fee money is also distributed to county conservation districts and a number of state agencies, including the PUC, DEP, Fire Commissioner’s Office and Fish and Boat Commission, for use in drilling oversight programs and activities. (Pittsburgh Post-Gazette, 4/4/14)

A STRONGER AMERICA

  • Yergin: “The global energy equation has changed dramatically in recent years, thanks to shale”: And for the U.S., it’s the first time that our energy position is different. There isn’t this sense of vulnerability, but rather the sense that there’s a new dimension to what we do. There’s new muscle to it. Gas exports will come in three, four, five years. By 2021, the U.S. may be one of the three largest LNG exporters in the world. (Wall Street Journal, 4/8/14)
  • “U.S. Taps New Energy Sources, And Potential Geopolitical Clout”: The recent oil and natural gas boom in the U.S. is paying major dividends for Washington’s geopolitical clout. Thanks to hydraulic fracturing, the U.S. is awash in domestic energy, which is having a ripple effect globally. … The shift from dependency toward self-sufficiency came extraordinarily fast, says Jason Bordoff, director of Columbia University’s Center on Global Energy Policy and a former senior energy adviser to President Obama. A few years ago, the U.S. was expecting to be dependent on natural gas imports from countries such as Qatar. In early 2010, Bordoff says, the administration began to grasp the implications of the oil and gas boom as a result of fracking. “This is a really historic opportunity for the country to dramatically reduce our dependence on energy imports and increase economic activity,” Bordoff says. (NPR, 4/4/14)
  • Shale Boosts American Energy Security: Over the past six years, shale gas and hydraulic fracturing of hard-to-reach crude oil have delivered a wholly unforeseen era of cheap energy in the U.S., sending domestic crude production soaring by 60 percent and natural gas prices tumbling to a third of 2008 levels. By 2016, the U.S. will be producing more oil than Saudi Arabia; by 2020, it will be energy self-sufficient. (Newsweek, 4/8/14)

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