“Massive” Energy Tax Hike Threatens Shale’s Economic, Environmental Benefits

Consumers, manufacturers, and our environment are all benefitting from locally-produced, affordable natural gas. As laid out in a recent Scranton Times-Tribune news story under the headline “Gas and Power March Together,” the paper reports that shale development is creating a “wave of projects” that are generating reliable, affordable and clean electricity across the Commonwealth.

Beyond creating thousands of good-paying union construction jobs, these natural gas power generation projects across the nation and throughout Pennsylvania are helping to dramatically boost air quality. In fact, power generation-related CO2 emissions are at a 27-year low, according to the federal Energy Information Administration. And while the benefits of using more natural gas are clear, our environment is being protected at every phase of the development process. For example, tightly-regulated shale development is not impacting Pennsylvania streams or groundwater, according to a new Susquehanna River Basin Commission (SRBC) report.

Commenting on the SRBC’s data, the MSC’s Dave Spigelmyer said: “SRBC’s data – as well as other studies, including EPA’s exhaustive hydraulic fracturing study – not only reflects the strong, rigorous and modernized regulations in place that ensure environmental protection but also the industry’s focus and commitment to continuous operational improvements.”

But even higher energy taxes threaten these game-changing economic and environmental benefits. Put simply, there couldn’t be a “worse time for an excessively higher energy tax.”

Yet some in Harrisburg, Gov. Wolf included, suggest that the “industry is showing no signs of slowing down.” But these claims have been fact-checked by the Williamsport Sun-Gazette, which offers this in a recent editorial: “If the state decides to get greedy during a soft energy market, the results can turn from layoffs to moving operations elsewhere.”

Here’s what they’re saying:

  • “Gas Industry Can’t Handle a Severance Tax”: “Natural gas production is growing faster in Pa. than anywhere else in the country and Neptune’s recent decision to place their headquarters in Washington Co. proves the industry is showing no signs of slowing down,” Gov. Tom Wolf said. We don’t know what references he used to make that statement, but here are the facts. … For every job created in oil and gas production, three more jobs are created in the supply chain and six more in the broader economy. Even during a slowdown, the natural gas industry remains the shining light amid Pa.’s cloudy economic portfolio. But there are no figures to indicate the industry is going through the boom times that Gov. Wolf wants to tout to rationalize his desire to add a gas severance tax on top of the gas impact fees the industry already is paying. … If the state decides to get greedy during a soft energy market, the results can turn from layoffs to moving operations elsewhere. The gas severance tax is not a gamble the governor or the Legislature are in a position to make on behalf of residents, taxpayers and workers in Pa. (Williamsport Sun-Gazette editorial, 8/16/15)
  • “Massive Tax Increases Will Not Move the State Forward”: Despite the fact that this industry has created more than 200,000 direct and indirect jobs – including union jobs, engineers, blue-collar workers and truck drivers – the administration continues to call for this punitive tax. At a time when the price of natural gas is at an all-time low, this tax (along with Pa.’s already burdensome corporate tax climate) would drive companies to other states or shale playstaking good paying, family-sustaining jobs and economic opportunity with them. … The bulk of the revenue from the Wolf administration’s proposed severance tax would not go to education. The language in the governor’s plan actually calls for a substantial portion to go towards payments for alternative energy subsidies with not one dollar guaranteed to go toward education. These massive tax increases are not in the best interest of Pa.’s residents and will not move the state forward. (Patriot News op-ed, 8/17/15)
  • Even Higher Energy Taxes “Will Cost Good-Paying Jobs”: Pennsylvanians — local government officials and consumers as well as union members and small businesses — have a clear answer: Now is the absolute worst time to raise Pa.’s energy tax on natural gas to the nation’s highest. In addition to the nearly 250,000 good-paying Pa. jobs tied to or supported by the natural gas industry, shale is delivering broad local benefits in the form of lower energy costs, more opportunity for small businesses and huge amounts of tax revenue benefiting our communities. … Our region’s union workforce agrees too. Jim Kunz of the International Union of Operating Engineers Local 66 recently said that natural gas has been “a godsend” for his union members. LiUNA’s Dennis Martire has said that shale is “a lifeline to family-supporting jobs.” … Even higher energy taxes will cost good-paying jobs, jeopardize shale’s broad benefits and slow our region’s economic recovery. Further, Gov. Wolf’s massive energy tax increase proposal coupled with new onerous regulations discourages capital investment when we need it most. (Butler Eagle letter, 8/15/15)