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Energy Tomorrow Blog

The Impact of Impact Fees

analysis  pennsylvania  energy industry  severance tax  natural gas development  economic impacts 

Mark Green

Mark Green
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.

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Access to Reserves is Key to Energy Production

news  arctic  oil and natural gas development  permian basin  pennsylvania  new york  hydraulic fracturing  infrastructure  gasoline prices  offshore energy 

Mark Green

Mark Green
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.

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Study: Tax Proposal Could Cost PA

analysis  pennsylvania severance tax  oil and natural gas development  shale energy  tax revenues  economic impacts  production 

Mark Green

Mark Green
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.

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Sound Regulation, Policy Choices Key to Energy Growth

renewable fuel standard  rfs34  biofuels  energy exports  crude oil production  pennsylvania  fracking  solar 

Mark Green

Mark Green
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.

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Energy Exports and Fueling the Energy Revolution

american energy  lng exports  exports  Economy  fracking  new york  pennsylvania 

Mary Leshper

Mary Schaper
Posted March 27, 2015

LNG Wold News Blog: Dominion said it has celebrated with its international business partners and Maryland community leaders the construction of the Dominion Cove Point LNG liquefaction project. Kenichiro Sasae, the Japanese ambassador to the United States, and Maryland Gov. Larry Hogan joined Dominion Chairman Thomas F. Farrell II at the ceremony, along with Diane Leopold, president, Dominion Energy; Kazuhiro Takeuchi, president, CEO, and general manager for the Americas, Sumitomo Corp of Americas; Jayanta Sinha, president, GAIL Global U.S.A., and Steven R. Weems, president, Calvert County Board of County Commissioners.

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Embracing America’s Energy Abundance

american energy  exports  fracking  pennsylvania  taxes  ethanol  rfs34 

Mary Leshper

Mary Schaper
Posted March 11, 2015

The Hill (Congress Blog): The ongoing shale oil renaissance and the United States’ abundant natural resources has transformed our energy landscape, allowing American consumers access to affordable fuel supplies and spurring significant investment and job growth across our economy. But in order for this renaissance to continue, it is critical that lawmakers ensure that U.S. policy keeps pace so that our energy resources are being leveraged to provide the maximum benefit to the nation’s economy and international geopolitical interests.

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PA Energy, Taxes and Golden Eggs

energy tax hikes  pennsylvania  natural gas development  economic benefits  fracking 

Mark Green

Mark Green
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.

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Pennsylvania’s Taxing Proposal

energy taxes  shale energy  natural gas  pennsylvania  taxes 

Reid Porter

Reid Porter
Posted March 3, 2015

If it ain’t broke, don’t fix it.   That colloquialism should guide Pennsylvania policymakers on energy tax policy. The commonwealth already has a successful tax system in place that generates significant revenues and local funding from energy development without jeopardizing jobs. As reported by the governor’s Department of Environmental Protection, Pennsylvania continues to increase its natural gas output, producing more natural gas each of the past three years.

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The Wide-Ranging Benefits of American Energy

american energy  Economy  Energy Security  Environment  jobs  new york  pennsylvania  fracking  alaska  arctic 

Mary Leshper

Mary Schaper
Posted February 20, 2015

EIA Today in Energy: Working natural gas in storage has surpassed five-year average levels for the first time in more than a year. At 2,157 billion cubic feet (Bcf) as of February 13, stocks are 58 Bcf greater than the five-year average. Recent extremely cold weather may result in high stock withdrawals for the week ending February 20, which could again push stocks below their five-year average. However, natural gas production in February and March that is forecast to average 5 Bcf/day above the year-ago level is likely to contribute to healthy inventories and moderate prices as the nation moves from winter into spring.

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Balancing Safe Energy, Environmental Protection

shale energy  safe operations  hydraulic fracturing  horizontal drilling  fracking  safety standards  economic benefits  pennsylvania 

Mark Green

Mark Green
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.

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