Energy Tomorrow Blog
Stephanie Catarino Wissman
Posted March 16, 2021
Pennsylvania Gov. Tom Wolf is again proposing a severance tax on the commonwealth’s natural gas industry – the seventh such tax proposal in as many years. Like the others before it, this is a bad idea that could harm the benefits of energy production to the state and nation.
Wolf has teed up his latest tax proposal as a “commonsense” solution to the state’s economic recovery efforts. But it’s really a tax-and-spend scheme that could have negative consequences for all Pennsylvanians.
The fact is the effects of a natural gas severance tax would extend beyond industry. Because natural gas production boosts the commonwealth’s broader economy and supports technical education, infrastructure and many other public services, everyone would be impacted.
Posted February 18, 2020
Another year, another punitive natural gas tax proposal from Pennsylvania Gov. Tom Wolf, his sixth bid for a severance tax in six years.
We say “punitive,” because Wolf’s tax hike would effectively punish an industry that has been good for Pennsylvania, contributing $1.7 billion in impact fees since 2012 while boosting the commonwealth’s economy and supporting hundreds of thousands of jobs.
Posted June 28, 2019
Here's some quantification for the broad, public good the natural gas industry is doing in Pennsylvania – nearly $252 million distributed to counties and municipalities in state impact fees paid by natural gas operators, the highest total since the fee was implemented in 2012.
Behind the numbers: county and municipal governments that host shale wells will receive $135 million, the Marcellus Legacy Fund – for statewide initiatives including greenways, trails and recreation, watershed restoration, flood control, abandoned mine drainage abatement and abandoned well plugging – will receive $90 million and $18 million will go to state agencies.
Posted February 5, 2019
Back in 2015, Pennsylvania Gov. Tom Wolf’s first year in office, we first likened his bid to hike taxes on natural gas production to killing the goose that lays golden eggs. That’s because over the years natural gas production has significantly benefited Pennsylvania – the nation’s No. 2 natural gas producer – in jobs, economic lift and impact fees paid by industry that have helped support public infrastructure, storm and water systems, public safety, housing and more, all over the commonwealth.
Negatively impacting a key Pennsylvania industry doesn’t make sense. Yet, in this new year, Wolf is back with a new tax scheme that could hamper natural gas production and its benefits – a proposal to borrow money to invest in infrastructure that would be paid back through a new natural gas production tax. Again, a tax on top of the impact fees industry already pays.
Posted August 9, 2017
Total up industry’s economic contributions to Pennsylvania – helping to support its schools, first-responders, local infrastructure and jobs, lots of them – and it’s a pretty fair amount. But not fair enough for some. Last month a narrow majority in Pennsylvania’s state Senate voted for a $600 million tax increase that would hit natural gas producers and natural gas and electric users while also hiking taxes on communications services – all of which could significantly impact Pennsylvania consumers.
Posted July 28, 2017
The latest severance tax proposal in Pennsylvania, targeting natural gas production as well as consumer items and services, is a story of lawmakers risking harm to ongoing energy activity and economic growth – already providing significant benefits to people all across the commonwealth – instead of working to expand opportunity through pro-growth policies. Unfortunately, the tale being written by the state Senate could be about less natural gas production (and potentially less revenue to the commonwealth), less economic growth and fewer benefits to Pennsylvanians.
Posted June 2, 2015
The Huffington Post (Sean McGarvey): The American job market is the best it's been in six years, according to the latest government data. The jobless rate is below 6 percent for the first time since 2008.
And in 2013, the United States became the world's top producer of oil and natural gas – surpassing Russia and Saudi Arabia.
This U.S. energy boom is creating many new jobs here in America, and it's a leading contributor to American workers' vaulting out of the unemployment line and into the middle class. Our leaders must continue to support domestic energy exploration, which is proving our nation's strongest job-growth engine.
According to the American Petroleum Institute, investments in updating U.S. energy infrastructure alone could generate an estimated $1.14 trillion in capital investments – creating both jobs and energy savings from now until 2025.
Posted May 18, 2015
Sometimes, amid the back and forth of discussions over energy policy, it’s helpful to talk about the real-world impacts of various policy choices.
Right now in Pennsylvania, a proposed natural gas severance tax that would supersede the state’s existing impact fee is being debated vigorous – chiefly because the current impact fee has been good for the commonwealth, very good.
It’s been so good that some question the wisdom of swapping the current system for a severance tax – especially given a recent study showing that the net effect likely would be less energy development, resulting in billions in economic losses and nearly 18,000 fewer jobs supported by 2025. We’ve likened it to the proverbial folly of killing the golden egg-laying goose.
So, if the current impact fee has been good for Pennsylvania, can we be more specific? Yes.
Posted May 8, 2015
The Hill: Sen. Lisa Murkowski (R-Alaska) took her biggest step to date toward a large-scale overhaul of federal energy policy on Thursday, introducing 17 bills she said could make up parts of an energy reform package this session.
The bills cover a myriad of topics, from electricity reliability to the Strategic Petroleum Reserve to the production of methane, hydropower or helium. Any of the bills could make up the backbone of a broad energy reform effort, something Murkowski, the chairwoman of the Senate Energy and Natural Resources Committee, has made one of her top priorities this session.
“Does this mean all of them are going to part of a broader bill? No,” she said at a briefing with reporters. “But does it mean these are my ideas I would like to have folks catch up on? Yes, absolutely.”
One high-profile piece of legislation missing from the slate introduced Thursday: a bill to lift the federal ban on crude oil exports. Murkowski said she will release that bill separately next week.
Posted May 7, 2015
The oil and natural gas industry’s recent tax revenue and economic contributions to the Commonwealth of Pennsylvania look like this: more than $630 million through the state’s existing local impact fee since 2012, including $224 million in 2014 alone; more than $2.1 billion in state and local taxes; annual contributions to the state economy of $34.7 billion, boosting the bottom lines of more than 1,300 businesses in the energy supply chain.
Gov. Tom Wolf, who has proposed new industry taxes, says the state is “getting a bad deal.” We suspect a lot of states would like to have things so rough.
Nevertheless, the governor is pushing for an additional natural gas severance tax of 5 percent on the gross market value of production, plus a fixed fee of 4.7 cents per thousand cubic feet (Mcf) produced. The governor also wants an artificial floor of $2.97 per Mcf regardless of the actual price of natural gas. All suggest unfamiliarity with the story of the goose that laid golden eggs.