Two Democratic candidates for governor issued calls yesterday for a tax on the burgeoning natural gas production anticipated in the state over the next few years.

Such a tax was considered by the Legislature during this year's lengthy budget battle, but the governor and lawmakers decided to hold off on the tax after heavy lobbying by the industry. Although such levies are common in other gas-producing states, a variety of Harrisburg leaders said they were reluctant to tax an infant industry before it was firmly established in the state.

Businessman Tom Knox proposed a fee aimed at producing $100 million annually as part of a series of energy policy recommendations. Montgomery County Commissioner Joe Hoeffel coupled his call for a 5 percent tax on the value of gas production with a series of proposals to guard against environmental degradation from the nascent but growing industry.

While calling the state's natural gas deposits "a virtual gold mine," Mr. Hoeffel emphasized the need to guard against pollution from the process that uses vast quantities of water to fracture shale beds far below the earth, releasing embedded gas. While there is some debate on the overall environmental effects -- natural gas use is an alternative to coal, which produces significantly more greenhouse gases -- there have been numerous reports of contamination of well water and of water treatment plants facing overwhelming challenges in treating the large quantities of waste water produced by the process.

Mr. Hoeffel said he would guard against such effects by strengthening state water quality laws and urging Congress to strengthen federal oversight of the industry. He would earmark the 5 percent extraction fee he proposes for a variety of environmental goals, including water cleanup, parks and decontamination of mines and abandoned industrial sites.

Mr. Knox said he would pour $100 million annually from a gas extraction tax into a new Energy Development Fund.

It's tough to compare the two tax proposals because the Knox camp couldn't immediately specify the rate for their tax while the Hoeffel campaign did not supply a revenue estimate for its version of the levy.

The Knox plan revenues would similarly be targeted toward a menu of green goals including job training, energy efficiency tax credits and research.

On the consumer end of the energy equation, Mr. Knox is concerned about the effects of deregulation of electricity rates. While many Western Pennsylvania customers have dealt with deregulated rates for several years, most parts of the state are facing the lifting of state price ceilings over the next two years.

Mr. Knox would buffer the effects of the forecast rise in rates by creating a statewide power purchasing authority to bring greater negotiating power to the state's consumers.

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