Energy Tomorrow Blog
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 12, 2015
Wall Street Journal: The U.S. government Monday conditionally approved Royal Dutch Shell PLC’s plans to drill in the Arctic Ocean this summer, removing the biggest remaining obstacle before the company can explore for oil and natural gas in the Arctic’s frigid, isolated waters.
The announcement adds to a mix of decisions by the Obama administration that have restricted and granted new domestic fossil-fuel development.
Though affecting just one company, the approval is a victory for the oil-and-gas industry, which has criticized recent regulations affecting the sector, including tougher requirements on hydraulic fracturing and trains hauling flammable oil. Monday’s approval is tied to regulations proposed by the government in February for Arctic drilling operations off the coast of Alaska that could pave the way for additional companies exploring in the region.
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.
Posted April 16, 2015
The Wall Street Journal: A former White House economic adviser is calling for changes to a 2005 law mandating increased use of alternative fuels in the nation’s transportation supply, adding a key voice to a growing chorus of people who say the policy is not working.
In a report published Thursday, Harvard University professor Jim Stock, who served on President Barack Obama’s Council of Economic Advisers in 2013 and 2014, proposes several reforms to the biofuels mandate, known as the renewable fuel standard, including some requiring congressional approval.
The report adds to a growing body of politicians and experts who are questioning the law’s effectiveness amid regulatory uncertainty and lower oil prices.
Posted March 27, 2015
Posted March 11, 2015
Posted March 6, 2015
More on the plan by new Pennsylvania Gov. Tom Wolf to increase taxes on energy production in the commonwealth.
As lawmakers mull over Wolf’s proposal to add a 5 percent tax on the value of natural gas at the wellhead, plus 4.7 cents per thousand cubic feet of gas extracted – effectively a 7.5 percent tax, according to Cabot Oil & Gas Corp.’s George Stark – the key issue is its potential effect on future energy development in Pennsylvania.
Certainly, fundamental economics holds that if you tax something more, you’ll almost certainly get less of it. And that should give lawmakers pause.
Posted March 3, 2015
Posted February 20, 2015
Posted January 22, 2015
Small business owner Laura Ross in Washington, Pa., has a stake in safe energy development and environmental stewardship.
In the new television ad below, Ross talks about how her café and other businesses in town have seen an economic boost because of nearby energy development. But she’s also mindful of the environment, because her business carries items produced by local farms. The fact that hydraulic fracturing has been done safely for more than 65 years is reassuring to her and her patrons.