As an attorney working with oil and natural gas producers and oil-field services companies, I see firsthand the well-paying jobs Pennsylvania’s growing energy industry is creating every day throughout the commonwealth. A new tax on natural gas production would slow the pace of development and lead directly to a loss of jobs and reduced economic activity.
The existing impact fee (tax) on production from unconventional wells is already raising significant revenue for communities across the commonwealth. Natural gas prices are historically low and are likely to remain so, given the huge increase in production across the Appalachian Basin and existing pipeline and gathering constraints. Pennsylvania is a high-tax state by any measure, and many oil and gas operations have already shifted to our neighbors in Ohio and to other states. Singling out this industry for still more taxes will hurt our economy and will likely lead, over time, to a net loss of revenue here because of decreased oil and gas operations. That will mean a loss of all of the positive ripple effects that those operations create.
Would we single out the coal, dairy or timber industries for a tax on production? No, nor should we. For the same reasons, we should not single out the oil and gas industry. It is bad public policy to single out a successful, job-generating industry for additional taxes.
Our lawmakers should know that if they pass a new tax on oil and gas production, that tax will likely not ultimately result in a net increase in revenue and will result in job losses.