Misinformation Fuels Severance Tax (or Fee)

It’s not surprising that so many Pennsylvanians believe the state needs a severance tax, when they are bombarded with biased and misleading information.

A recent example comes from the Patriot News’ Editorial Board, which entirely misconstrued the Dimock Pipeline incident. Cabot Oil and Gas offered to install home treatment systems for all houses with contaminated well water in the community. It was the Department of Environmental Protection (DEP) who insisted the municipal water pipeline be built, despite the fact that both the community and the local municipality didn’t want the pipeline.

Yes, taxpayers are left to foot the bill for the new $12 million waterline, but it is a result of a pushy DEP, and not an irresponsible drilling company shirking responsibility.

Places where drilling is actually occurring show the highest level of support for the industry, which isn’t surprising when you visit these areas and hear how the industry has vitalized the community.


And contrary to the claims of the tax-fee proponents, drilling companies are paying for the “social costs” of the gas industry by investing in local communities and rebuilding local infrastructure, putting millions into repairing and improving local roads.

Yet some politicians are still demanding a severance tax, which is unlikely with Governor-elect Corbett in office. However, Sen. Scarnati has floated a “local impact fee” (subscription required) in areas where drilling is occurring. But it has yet to be demonstrated that additional funds are needed for this purpose, above what drillers are already paying in state and local taxes and fees, DEP fees and fines, and road bonding and maintenance agreements.

Here is what Bradford County Commissioner Douglas McLinko, who’s community is in the heart of the Marcellus Shale development, had to say about a severance tax,

Any concerns raised about Marcellus Shale development are being resolved locally. A severance tax would only impede the economic growth while stymieing cooperation between industry and government. Frankly, local officials and community leaders will address Bradford County’s needs without Harrisburg grabbing its resources and wealth.