Environmental groups support state drilling tax
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HARRISBURG -- A coalition of several dozen environmental groups is urging the Legislature to generate about $100 million a year in new revenue by slapping a "severance tax" or "extraction tax" on companies that drill for natural gas in areas of Marcellus shale.
The groups proposed that some of the new revenue go to the state's environmental stewardship fund, which pays for cleaning up streams and protecting state forests.
Other funding should go to the state Fish and Boat Commission, the state Game Commission and to county and municipal governments that face added costs, such as repairs to roads and bridges and damage to the environment caused by drilling equipment.
The environmental groups estimated that Pennsylvania could have as much as 363 trillion cubic feet of natural gas deep underground, in the three-fourths of the state that is covered by Marcellus shale deposits. That could be worth as much as $1 trillion.
"Imposition of a severance tax on natural gas is a no-brainer," said Rep. Bud George, D-Clearfield. "The gas industry should not be asking for a free ride any longer."
The tax rate isn't set yet, and likely would be the subject of intensive legislative discussions. But at a rate of 4.7 cents per thousand cubic feet of gas, the rate of tax used in West Virginia, the Keystone State could gain about $100 million a year in new revenue, proponents said.
Rep. David Levdansky, D-Forward, chairman of the House Finance Committee, said 39 states with natural resources, including Texas, Louisiana, Oklahoma and West Virginia, tax natural gas as it comes out of the ground.
This severance tax would be in addition to natural gas leasing fees that the state already imposes on drillers. Gov. Ed Rendell wants to use $174 million from those lease fees to help erase the estimated $2.3 billion budget deficit for 2008-09.
More details in tomorrow's Pittsburgh Post-Gazette.
First Published March 16, 2009 1:30 pm
