MSC in PennLive: Raising drilling permit fees by 150 percent will hurt Pennsylvania’s economy

Concerns of scarcity, rising prices, men and women in uniform protecting our nation and increasing dependence on foreign nations to fulfill our energy demands defined the energy outlook of the early and mid-2000s. America was not “apt to return to a period of relative abundance and low prices, anytime soon,” then-Federal Reserve Chairman Alan Greenspan famously said.

What a difference a decade makes. In just a few short years, and continuing today, the domestic shale revolution has transformed America into a global energy production leader. Pennsylvania’s shale gas resources have helped position the U.S. to become a net energy exporter for the first time in almost seventy years.

Thanks to shale, the United States is the world’s number one oil and natural gas producer – a feat nearly unimaginable a dozen years ago.

Pennsylvania quickly emerged as the nation’s second largest natural gas producer – resulting in direct benefits for consumers, manufacturers, and not to mention, improved air quality. In fact, it was shale development that carried Pennsylvania through the depths of the Great Recession at the turn of the last decade.

Hard-working Pennsylvanians realize energy savings of $1,100 – $2,200 per household, according to Public Utility Commission data, as wholesale electricity and natural gas prices have plummeted thanks to our abundant supply.

As clean, domestic natural gas maintains its position as the largest electricity production source, carbon emissions tied to the power sector continue to fall, according to new federal data, soon to reach levels not seen since the Reagan administration. This sustained improvement in air quality has saved more than 26,000 lives since 2008, according to new University of California San Diego research.

While consumers, manufacturers and our shared environment have been the shale revolution’s clear winner, as we enter a new decade, Pennsylvania’s energy job creators face strong market challenges. Amid a global downturn in energy prices, the competition for capital investment needed to create jobs and grow the economy is increasingly fierce.

Focusing on balancing the supply-demand equation through modernizing and expanding our energy infrastructure and increasing in-basin use among power generation and manufacturing, are steps in the right direction. Progress on pipeline build-out and completion of the petrochemical plant under construction in Beaver County will help drive production growth and support thousands of good-paying jobs, especially among the region’s building trades.

Connecting under-served communities to abundant, affordable natural gas and increasing its use, are keys to fully realizing shale’s long-term economic and environmental opportunity. Without supportive state and federal policies, realizing those shared benefits will be more challenging.

Misinformed policy positions from some presidential candidates to ban the safe, responsible use of hydraulic fracturing are alarming. Should such a ban be enacted, more than 600,000 Pennsylvanians would be out of work and our state’s economic output would take a $261 billion hit, according to a U.S. Chamber of Commerce report. It is no wonder voters “fear the economic impact,” a Rasmussen Reports survey found, of such a ban.

At the state level, it is against this backdrop of scarce investment dollars, declining rig counts and slowing permit applications that Gov. Wolf prepares to give the annual budget address. Unfortunately, Pennsylvania took a step back this month, gaining the undesired title spot as the state with the highest permit fees. PA DEP permit fees will increase 150 percent to $12,500 per well, and we are deeply concerned that such a significant hike will further discourage development in Pennsylvania.

With the increase in funding, we are hopeful the Department of Environmental Protection will take meaningful action at addressing notoriously long permit delays, that often run more than six months, which will help boost Pennsylvania’s competitiveness.

Strengthening Pennsylvania’s tax and regulatory structure by not increasing energy taxes, has helped to better position the Commonwealth to attract job-creating investment. As a result, Pennsylvania’s unique natural gas impact tax is on track to generate nearly $2 billion through this year.

Just as energy predictions in the early 2000s were inaccurate, it is impossible to predict what the 2020s have in store. For certain, our economy demands affordable, reliable energy and, with the right actions and policies, Pennsylvania’s energy abundance will play a central role for decades to come.

David Spigelmyer is president of the Pittsburgh-based Marcellus Shale Coalition.