FEBRUARY 7, 2012

Stop the Job-Killing Marcellus Tax!!!

A job-killing Marcellus Shale tax is being rammed through the legislature right now! With great speed and little transparency, House Bill 1950 was turned into a job-killing tax, littered with corporate welfare and handouts.

See our video discussing the tax

Corporate welfare highlights in the bill:

• $6.3 million to Environmental Stewardship Fund (Growing Greener) through fee; then in 2013, it redirects $20 million from the Oil and Gas Lease Fund -- otherwise dedicated for state parks and forests.
  • Growing Greener has been use to subsidize solar and wind projects, and even advocacy groups like PennFuture.
    
• More than $11 million over three years to bribe the Shell cracker plant to the state.
  
• Nearly $20 million over three years for natural gas vehicle development.
  
• $1 million for rail freight assistance.
  
• Beautification project grants, via Commonwealth Financing Authority!

posted by KATRINA CURRIE | 00:55 PM | 0 comment

JANUARY 30, 2012

Debunking Severance Tax Rhetoric

Here's my letter to the editor in the Public Opinion responding to Matthew Major's fact-deficient editorial on drilling:

Matthew Major's editorial on corporate welfare and best drilling policies scrapes the bottom of the content barrel, failing to accurately explain either topic to readers.

"Corporate welfare" is taking tax dollars and giving them away to fund otherwise unprofitable businesses like Solyndra. Major is calling for singling out the drilling industry -- which is creating tens of thousands of jobs, rescuing families from foreclosure, and generating prosperity for small-business owners -- to impose yet another tax on it.

Pennsylvania already has the 10^th highest tax burden in the nation, and the drilling industry pays the same taxes as every other business in the state. This amounts to more than $1.3 billion in state taxes since 2006. Other states that have natural gas taxes have friendlier business climates-for instance, Texas and Wyoming have neither income nor corporate taxes.

Major's line about legislators sacrificing the environment for drilling - straight from the anti-drilling, frackophobic handbook -- is based on emotion, not science or experience. The Department of Environmental Protection continually evaluates and improves regulations to ensure protection. Even a cursory review of the Governor's proposed drilling regulations shows the new rules are far from the industry handout Major claims. Most of the setback requirements and bonding requirements exceed those of neighboring states.

Gov. Tom Corbett is pushing for a principled natural gas impact fee where local governments can charge a fee if a driller is not paying for its impacts. Unfortunately, special interest groups, tax-and-spend politicians, and Major unwisely see the industry as a cash cow for unsustainable statewide projects. People should not lose out to bad policy and the politics of fear.

posted by KATRINA CURRIE | 05:00 PM | 0 comment

NOVEMBER 23, 2011

Lt. Gov. Cawley & Marcellus Shale on The BOX

Lieutenant Governor Jim Cawley is the latest guest on The BOX Podcast hosted by Matt Brouillette.

They discuss Marcellus Shale misconceptions, Gov. Corbett's impact fee, and the vast potential for job growth Marcellus represents.

Click here to listen online or to download The BOX Podcast.

posted by JOHN BOUDER | 10:25 AM | 0 comment

OCTOBER 28, 2011

State Energy Mandates Cost up to $440 million

A new study by Penn State scholars found Pennsylvania's alternative energy mandates will cost taxpayers up to $60 million next year and up to $440 million in ten years. Twenty-five to 30 percent of this price tag stems from meeting the state's solar requirements.

While solar looks bright on the surface, any jobs that depend on government assistance are overshadowed by a dependency on taxpayer pocket books. Accord­ing to the Federal Energy Information Administration, solar energy producers already get 55 times more sub­si­dies per megawatt hour than coal, and 95 times more than natural gas. Moreover, state solar energy is 10 times more expen­sive than elec­tric­ity from nat­ural gas and nearly six times more expen­sive than coal.

Given that Pennsylvania families can ill afford higher energy costs in this sluggish economy, Harrisburg policymakers are pushing a bill that would make these mandates more expensive.

House Bill 1580 would require that all solar credits used to fulfill the state's mandate be purchased from in-state companies, instead of companies within the PJM territory (PJM manages the electricity market in Pennsylvania and in all or parts of 12 other states and the District of Columbia).

The Penn State study shows that Maryland and Jersey—states in the PJM market that already require solar credits be purchased in-state—have solar credit prices that average 40 percent and 160 percent higher than Pennsylvania.

So just to recap, solar power drives up electricity prices for consumers, while lower prices for natural gas are reducing consumers' electric bills and saving Pennsylvanians on heating costs. Yet legislators are considering mandating the former and taxing the latter.

To learn more about Pennsylvania's alternative energy mandates, known as the Alternative Energy Portfolio Standards, click here.

posted by KATRINA CURRIE | 04:30 PM | 0 comment

OCTOBER 7, 2011

Regulation or Electrification?

The Wall Street Journal brings to light new documents showing the Environmental Protection Agency operates as an overbearing parent, not a servant of the people. New regulations targeting air quality and mercury production in coal-fired power plants are projected by the Federal Energy Regulatory Commission (FERC) to reduce electricity production by 8 percent. That's 81 gigawatts of power no longer available, which is enough electricity to power about 8,100 Pennsylvania homes for a year.

This is in addition to the EPA's other job-killing regulations that will increase electricity rates by 13 to 17 percent in Pennsylvania and cost thousands of jobs.

Why is the EPA rushing these punitive rules at a time of great economic uncertainty?

FERC says less burdensome regulations could have the same net benefit, so it's not about protecting the environment. Following the proposed reduction in output, consumers would be more susceptible to power outages and rolling blackouts during peak usage. Your power would be less reliable just when you need it the most. Clearly, the EPA places real people's welfare last on its priority list.

The Journal ends its article by assuring us that FERC has the power to overrule the EPA if their regulations are deemed too costly. One federal bureaucracy may be overseeing another, but consumers will never have real protection while we have regulation without representation.

posted by JOHN BOUDER | 09:30 AM | 0 comment

OCTOBER 3, 2011

Evaluating Gov Corbett's Marcellus Shale Impact Fee

Gov. Tom Corbett unveiled his Marcellus Shale impact fee proposal in Pittsburgh today. Corbett's proposal represents a significant improvement from some of the leading tax and fee proposals.

Framework

Counties have the option of imposing a fee to compensate for drilling's impact, outlining the maximum charge for each year of production for the first 10 years. This allows each county to assess the true impact of gas drilling—since many counties report no increase in costs—and charge an appropriate fee. The proposal appears to allow counties to charge different fee rates, based on impacts, as long as the fee doesn't exceed the maximum rate for each year.

The fee could be used for a limited number of expenses related to gas drilling (more on this below), with a portion of the revenue sent back to the state for transportation, well plugging, pipeline inspection, and a handful of other uses. The fee would also be a flat rate per unconventional well. These limits make the proposal truly a fee, rather than a tax in disguise.

Most of the revenue from the fee (75 percent) would be kept locally, divided between counties, municipalities with drilling, and municipalities without drilling. None of the revenue would go to the state General Fund, or for Growing Greener. This is the key distinction between an "impact fee" and a tax supported by special interests who just want more funding.

Suggestions for Improvement

First, the limits for use of the impact fee should be narrowed to exclude items that are not direct impacts of gas drilling—e.g., low-income housing, social services programs, and judicial system costs. These costs are the effect of population increases, and should be addressed through current local tax structures. If the current tax code needs to be adjusted to reflect the unique transitory nature of the drilling boom, that should be addressed separately.

Second, the fee would allow for counties to offer credits against the fee for investments in natural gas infrastructure. While the details are limited, it appears this would include supporting natural gas fueling stations and conversion of public transit fleets to natural gas vehicles—which are not impacts of gas drilling. Rather, any credit should be tied to expenditures that companies make to pay for their identified impacts. This would include road improvements funded by gas drillers. With an estimated $200 million spent by drilling companies in 2010 on road repair, legislators should be careful not to discourage future investments in local infrastructure.

Regulatory Changes and "Energy Independence"

The bill more than doubles the required distance between a drilling site and bodies of water, private wells, and public drinking water systems. Drillers would also assume responsibility, unless proven otherwise, for water contamination within 2,500 feet of a well, up from 1,000 feet. The proposal drastically increases violation fines and penalties, and increases well bonding costs by more than 400 percent.

Gov. Corbett's proposal also touched on promoting more use of natural gas-powered vehicles to foster "energy independence." The details are still sketchy, and there are no costs identified. But it sounds eerily similar to the state "Marcellus Works" proposal or the Congressional "NAT GAS" Act. These proposals are based largely on the "Pickens Plan" (from which T. Boone Pickens would profit substantially) to subsidize natural gas vehicles. Consumers, businesses and local governments don't need taxpayer subsidies to encourage them to save money, as these plans suggest, nor should the state try to pick winners in our energy future.

Corbett Marcellus Announcement

posted by NATHAN BENEFIELD, KATRINA CURRIE | 02:19 PM | 0 comment

AUGUST 22, 2011

EPA Regs Kill PA Jobs

Cap and Trade may be officially dead in Congress but the EPA is busy resurrecting it in a far more disastrous policy agenda that kills thousands of Pennsylvania jobs and send electricity rates through the roof.

The first of these regulations is called the Cross-State Air Pollution Rule (CSAPR). Finalized on July 7th, the mandate will affect coal and gas fired electric plants in 27, mostly eastern, states by reducing the transport of pollutants, like Sulfur Dioxide (SO2) and Nitrogen Oxide (NOx).

In Pennsylvania, power plants must reduce emissions of SO2 by 33 percent and NOx by 10 percent in the next six months. The mandate ignores the reality that major power plant systems are required to reduce emissions, like scrubbers, which could take more than four years from design to installation to accomplish.

On top of an unreasonable timeline, the EPA is trampling over state sovereignty by skipping the traditional State Implementation Plans and directly imposing federal rules on utilities, which some believe is a clear violation of the law.

Why rush when industry is already complying with current standards to reduce pollution? According to U.S. Energy Information Administration, the US cut SO2 emissions 50 percent between 2000 and 2009. And NOx emissions have been cut from 5.6 million to 2.3 million in the same time.

The CSPAR rule along with another regulation, called the Utility MACT rule, is estimated to cost 59,000 jobs in Pennsylvania from 2013 to 2020 and increase electricity rates by an average of 13 to 17 percent as utilities shutdown or idle plants to meet emission requirements.

Nationally, the Brattle Group found that the cost of investing in scrubbers and Selective Catalytic Reduction units across the country could run up to $120 billion by 2015. Even the EPA's extremely conservative cost estimate indicates that the price could be $2.8 billion annually, with $2.2 billion borne by consumers each year.

The only justification for these measures is a bunch of highly speculative and so far unproven death statistics that will undoubtedly wreak havoc on the energy industry.

posted by ELIZABETH STELLE | 05:10 PM | 5 comments

APRIL 28, 2011

Orwellian Tax Speak: Call It a "Fee"

Call it a "fee" or call it "knockwurst" if you like, but the latest proposal for a "local impact fee" on natural gas drillers is not only still a tax, but an unnecessary and punitive one.

While individuals and corporations should pay for the government they use, especially those companies that are clearly using and impairing taxpayer-funded assets, the fact of the matter is the natural gas industry is already paying more than their "fair share." 

For example, according to a Penn State University analysis, the natural gas industry paid an estimated $100 million in state and local taxes directly from industry.  Moreover, the industry paid business taxes, individual taxes on wages, and taxes on royalties and lease payments of $289 million in 2009; will pay upwards of $100 million in royalties to the state from drilling on state-owned lands this year; $1.7 billion in royalty and signing bonuses to private landowners in 2009; $11 million to the Pa. Department of Environmental Protection in fees (which entirely pays for DEP costs of inspection); and, $200 million in local road repairs and improvements in 2010.

Despite calling it a local impact fee, 40 percent of the money from this proposal would be redirected to things not specifically related to "local impact."  Therefore, this "fee" is really just another tax.  If this were truly a "fee" to pay for government services being utilized, then supporters would be able to identify what "impact" is not already being paid for and limit the cost of the fee to those purposes. 

Unfortunately, this is just another scheme to tax one of Pennsylvania's only growth industries (other than government) to pay for years of overspending in Harrisburg.

NOTE: See the "More Info" page to read the "Marcellus Shale Impact Fee" summary from Sen. Scarnati.

posted by MATTHEW BROUILLETTE | 03:24 PM | 1 comment

APRIL 26, 2011

Marcellus Shale 101 Presentation

Last week, I presented the case against a natural gas severance tax to a Penn State journalism class. Below is my presentation providing an overview of Marcellus Shale development in Pennsylvania.

Marcellus Shale Presentation

To learn about the facts of natural gas drilling in Pennsylvania, check out EnergyFactsPA.com.

posted by KATRINA CURRIE | 03:14 PM | 1 comment