Battle begins to place severance tax on Pa. Marcellus Shale drillers

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WASHINGTON, Pa. — The Marcellus Shale boom is not slowing down in Pennsylvania and Gov. Ed Rendell says he is not about to stop it, but is willing to tax it.

No moratorium

Speaking in Washington County Sept. 7, Rendell made it clear he will not sign a moratorium on Marcellus Shale drilling in the Keystone State, which has the largest shale deposit in the United States.

“There is no chance for a moratorium happening in Pennsylvania,” Rendell said.

Protesters

However, a group of protesters outside the meeting felt differently and didn’t back down when the governor stopped to talk to them for over 20 minutes.

They are concerned about the hydraulic fracturing, or fracking, process that uses water in the drilling process, and where the water goes after it is used.

The group declared they wanted a moratorium until research can be completed to ensure the process is safe.

However, when the Farm and Dairy approached the protesters, they declined to give their names and comment further.

Rendell said studies have shown the fracking process is safe and the water can be reused if treated properly. He added the state has hired an additional 105 inspectors for the Department of Environmental Protection to ensure the appropriate processes are being followed.

The governor said he doesn’t support a moratorium because economic growth is the most important thing for the state. He said the Marcellus Shale boom is good for the state and country because it is American-produced energy.

Balance

Recognizing, however, that drilling comes at a cost, the governor pushed for a severance tax placed on drillers to be enacted Jan. 1, 2011.

He said Pennsylvania faces three challenges because of the drilling: road damage, environmental protection, and the lack of training for emergency workers in case of a disaster.

The tax would help to fund these challenges, giving local governments funding for road transportation, and money for fire and safety forces training.

Severance tax

Rendell said his proposal is for a severance tax to be enacted similar to the state of West Virginia. He added almost every state has a severance tax on resource producers.

The tax would be levied on the gas companies and would be 5 percent on the sale of gas, plus an additional 4.7 cents for every 1,000 cubic feet of gas produced.

The money collected would then be paid to the state where proceeds would be divided between state and local governments. Rendell said he would like to see a 40/50 split between local and state governments.

Rendell described the drilling that has occurred this year and planned for next year as a “modern day gold rush” and that the money to be made by the gas companies is staggering.

“I don’t want to kill the golden goose. I just want to make sure the golden goose is paying their share,” Rendell said.

“I will not pass something that is a giveaway for the gas companies,” Rendell said.

The governor expects a battle in the state legislature, but he hopes a vote can be taken in the House by the end of September and then it would move to the Senate.

The Farm and Dairy is producing a three-part series on Marcellus Shale. Check out the first segment on gas well leases and protecting yourself.

About the Author

Kristy Foster Seachrist lives in Columbiana County raising sheep and horses. She earned her degree from Youngstown State University and has worked in both print and broadcast journalism. You can follow her on Twitter at http://twitter.com/fosterk96. More Stories by Kristy Foster Seachrist

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