State House GOP calls for more natural gas leases
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HARRISBURG -- House Republicans have come up with an alternative to Gov. Ed Rendell's proposed "severance tax" on natural gas that comes from areas of Marcellus shale in Pennsylvania.
They are proposing leasing fees on a total of 390,000 additional acres of state forest lands that would be made available for gas drilling over the next three years.
This would be an alternative to Mr. Rendell's call for a new tax at the wellhead, based on how many cubic feet of gas is actually taken from the ground. In his 2009-10 budget he thought that $107 million in new revenue would be generated for the state.
Republicans said a leasing fee is a better idea than a new tax. A bill by Rep. Dave Reed of Indiana would lease 130,000 of additional state-owned forest land in the first year, with a like amount in the second and third years.
There would be a minimum bid payment to the state of $2,000 per acre, which would produce $260 million per year. Some money also would go to local governments and conservation districts.
The state would get a second source of revenue under the Reed plan -- a royalty based on how many cubic feet of natural gas are actually taken from the additional forest land.
Last year the state Department of Conservation and Natural Resources leased 74,000 acres of state forest land for gas exploration, which brought in $174 million. Mr. Rendell has proposed using that money to help erase the current $2.3 billion budget deficit.
Mr. Reed said the state has a total of 2.1 million acres of forest land, and he is proposing leasing only 390,000 additional acres. He said it would be up to DCNR officials to decide on what additional areas of state forest are leased for drilling.
There will be much debate in the House and Senate over the dueling gas-revenue plans before June 30, the deadline for adopting a 2009-10 budget.
Rendell spokesman Chuck Ardo said the governor "has always said he's willing to listen to ideas other than his own, although he continues to believe that his severance tax proposal has merit."
More details in tomorrow's Pittsburgh Post-Gazette.
First Published March 24, 2009 11:13 am
