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API-PA: New year, same bad idea – Severance tax would stifle job growth and economic benefits for local communities across Pennsylvania

Reid Porter | | 202.682.8114

Harrisburg, Pa., February 7, 2017 – API-PA Executive Director Stephanie Catarino Wissman today criticized Governor Tom Wolf’s third attempt to implement a severance tax on Pennsylvania’s natural gas industry.

“Here we go again," said Wissman.  "Governor Wolf should look at ways to assist projects that expand Pennsylvania energy leadership rather than place a punitive tax on the industry that would harm consumers and tens of thousands of jobs in Pennsylvania. Rather than calling for another severance tax, we can work together help provide affordable and reliable energy needed to run households and businesses all over the commonwealth.”

Pennsylvania is the only state that requires an additional impact tax that is collected from every shale well drilled in the state. Since the enactment of Act 13 of 2012, the impact tax has distributed more than $1 billion, the bulk of which goes directly to local communities. Pennsylvania’s Independent Fiscal Office projects that market conditions will result in lower revenues this year; however, recent history has shown that even in a down year for the industry, revenue to the commonwealth is expected to be over $187 million.

“Investing in pipeline projects throughout Pennsylvania would bolster the impact tax, allowing currently shut-in gas to get to market, thereby increasing tax collections,” said Wissman. “This way, all Pennsylvanians benefit by increased impact tax investments and the environmental benefits of increased natural gas usage.”

Pennsylvania is an epicenter of America’s energy renaissance. Thanks, in large part, to the production happening throughout Pennsylvania, household budgets across the nation grew in 2015 by $1,337 due to utility and other energy-related savings in 2015. Sitting atop the prolific Marcellus and Utica shale plays, Pennsylvania is a natural gas production powerhouse – thanks to modern hydraulic fracturing and horizontal drilling. The U.S. Energy Information Administration reports that the two plays provided 85 percent of U.S. shale gas production growth since the start of 2012, reflecting the blossoming production from shale and other tight-rock formations through safe fracking.

The API-PA is a division of API, which represents all segments of America’s oil and natural gas industry. Its more than 625 members produce, process, and distribute most of the nation’s energy. The industry also supports 9.8 million U.S. jobs and is backed by a growing grassroots movement of more than 25 million Americans.

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