Tell the Truth: PennFuture’s Tax in Search of a Problem

Harrisburg, PA – Commonwealth Foundation President and CEO Matthew Brouillette was on hand Wednesday in Pittsburgh to counter claims that natural gas drilling is a scourge on the environment and an economic drain on Pennsylvania. Brouillette’s Pittsburgh stop coincides with the kickoff of PennFuture’s “Keep the Promise” tour, a two-week, seven date traveling road show that calls for a severance tax on natural gas drilling – a tax aimed at shaking down the natural gas industry in order to line the proverbial pockets of environmental alarmists and their special interest allies.

“It’s pretty funny that these staunch environmentalists are planning to spend the next two weeks crisscrossing the Commonwealth, leaving carbon footprints in their wake, to gin up support for a tax that, if enacted, wouldn’t even go toward environmental causes,” said Brouillette. “They’re calling their tour ‘Keep the Promise.’ We’re countering that with ‘Tell the Truth’ – about the environmental impact of drilling, about the positive economic impact of drilling and, most importantly, about the real reason behind this push for a gas tax.”

What PennFuture and their allies neglect to mention is that a proposed natural gas jobs tax won’t be used to fund environmental initiatives. Instead, it will be turned over to the General Fund, to help foot the bill for years of overspending in Harrisburg. The natural gas industry has brought tens of thousands of direct and indirect jobs into Pennsylvania, and is expected to generate 111,000 jobs and nearly $1 billion in revenue to the Keystone State by 2011. Meanwhile, unemployment in the state continues to hover around 9 percent.

“Years of failed economic policy and drunken-sailor spending in Harrisburg shouldn’t be remedied by sending the bill to an industry that is creating jobs and wealth in this state,” said Brouillette. “That’s just bad public policy.”

Though opponents of natural gas drilling have a tendency to weave apocalyptic tales of poisoned water and decimated landscapes, the facts don’t support such forays into melodrama. Accidents will happen. Accidents have happened. But drilling is very tightly regulated at a number of levels, and there are mechanisms in place to impose fees and fines when accidents occur. Often, the fines assessed are well beyond the cost of clean-up and investigation. Consider the Clearfield well blowout that resulted in $400,000 in fines, despite a bottom-line investigation and clean-up cost of only about $50,000.

Despite PennFuture’s dogged attempts to paint the natural gas industry as unrepentant environmental plunderers, the history of natural gas drilling is clear: what they break, they fix, often leaving communities with better infrastructure than existed when they arrived. Opponents of drilling point to road damage in rural areas where most drilling takes place. It’s a legitimate concern but, again, there are laws and regulations in place to remedy and redress any damage that may be caused.

Between fines, fees and existing taxes, Pennsylvania is already one of the most expensive states in which to drill. A survey of petroleum companies found that the Commonwealth is as desirable to drillers as Cambodia or Syria – and that’s without the severance tax. Imposition of such a tax would likely send a message to the natural gas industry that they – nor their jobs, their improvement of infrastructure, or their infusions of dollars into the state’s coffers – are not welcome here. Clearly the goal of PennFuture and its allies who are pushing for a severance tax on gas companies is to shake them down, then send them packing to other states that welcome their investments.

“There is not one iota of credible evidence that natural gas drilling is not a net positive: for the economy, for communities in which drilling is occurring and even, ultimately, for the environment,” said Brouillette. “This push for taxes is just another special interest cash grab, preying on gas companies simply because they have deep pockets.  It is a tax in search of a problem.”

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The Commonwealth Foundation ( is an independent, non-profit public policy research and educational institute based in Harrisburg, PA.