At a campaign stop in Harrisburg Friday, Democratic gubernatorial candidate Tom Wolf repeated his pledge to enact a new tax on Pennsylvania’s natural gas production.
“I want to put a five percent severance tax on that gas,” he told a crowd of supporters. “And do it responsibly, from an environmental point of view.”
Gas companies are currently required to pay an impact fee for each well. In the past three years, the fees have generated more than $630 million. Most of the money is sent back to the local communities that host drilling.
Wolf, a York County businessman, says at current production levels his gas tax could generate $1 billion per year.
“This would take the place of the impact fee,” he explains. “It would include a big chunk to make sure the localities had money coming back to them.”
When asked by StateImpact Pennsylvania what constitutes “a big chunk,” he wasn’t sure.
“Down to the specific penny? I don’t have that,” he said.
Wolf wants to spend the rest of the tax revenue on increased drilling oversight at the state Department of Environmental Protection and investments in renewable energy and public education. He has a wide lead in the polls against incumbent Governor Tom Corbett.
Here’s something Governor Tom Corbett and his democratic challenger Tom Wolf agree on: Each calls Pennsylvania’s Marcellus Shale natural gas a “game-changer” for the state’s economy. But they disagree on how to get the most out of the gas boom for all Pennsylvania residents. Comparisons to Texas keep coming up in the race. And natural gas production has recently put Pennsylvania second only to Texas. So how exactly does Texas tax the gas drillers, and how is it different in Pennsylvania. StateImpact Pennsylvania drills down into the sometimes taxing and dull fiscal policy to get at the answer.
How does Pennsylvania tax natural gas?
In 2012 the state implemented the “impact fee.” This is a flat fee charged to each well. The levy can change from year to year based on natural gas prices and the Consumer Price Index, but in 2013, gas companies paid $50,000 for each new well they drilled. Smaller, vertical wells were $10,000. The impact fee has so far generated $636 million in three years.
Sixty percent of the impact fee revenue stays at the local level, going to counties and municipalities hosting wells. The rest goes to various state agencies involved in regulating drilling and to the Marcellus Legacy Fund – which gets spread out around the state for environmental and infrastructure projects.
Like other businesses in Pennsylvania, the gas industry gets charged corporate taxes as well. At 9.99 percent, Pennsylvania’s corporate tax is considered high. It’s unclear how much the drillers actually pay, because many are not registered in the state and do business elsewhere. Governor Corbett says he has not done an analysis on what the drillers pay in corporate taxers. But he says when combined with the businesses that support and serve the industry, the total revenue is $2.5 billion for the past six years. Continue Reading
Governor Corbett has signed two bills providing more transparency for people who have leased their property for natural gas drilling.
A landowner advocacy group calls the measures “helpful” but says more action is needed.
One measure would require drillers to submit monthly gas production reports; they are currently required to report every six months. The second bill requires companies to file a document with the county recorder of deeds surrendering a lease once it has expired.
Monthly production reports will bring Pennsylvania in line with other major gas-producing states. Some landowners have complained they are not able to compare the monthly gas production figures on their royalty statements with the bi-annual data collected by the state.
Governor Corbett signed a pair of bills Wednesday dealing with two hot-button environmental issues. The first would eliminate stream buffer requirements for the state’s cleanest waterways. The second measure gives legislators a role in crafting a federally-mandated carbon reduction plan–a top priority for the state’s coal industry.
The stream bill removes the 150 feet buffer requirement between new developments and Pennsylvania’s cleanest streams. It was supported by the Pennsylvania Builder’s Association. The law only applies projects that need stormwater discharge permits and are adjacent to the state’s “high quality” or “exceptional value” streams – a small percentage of waterways. Supporters have said the buffers amounted to eminent domain that restricted landowners. Environmental groups criticized the measure as a step backwards.
A separate bill approved by Corbett requires legislative approval of a federally-mandated carbon pollution plan. Under proposed rules recently put forth by the federal Environmental Protection Agency, Pennsylvania will have to cut its carbon emissions by 32 percent over the next 15 years. The new climate policy will mean major changes for the state’s energy industries.
63-year-old anti-fracking activist Vera Scroggins will be back in court next week facing fines and possible jail time in an ongoing fight with one of Pennsylvania’s biggest gas drillers, Cabot Oil & Gas.
Cabot wants Scroggins to be held in contempt of court for allegedly violating an order to stay at least 100 feet away from its work sites. A hearing is scheduled for next Wednesday in Susquehanna County.
Scroggins maintains her innocence.
“I just hope to be cleared of the charges and be a free person like anyone else in my county,” she says. “I want to be able to move through all the public roads here without having to worry about counting my steps.”
Scroggins has been a thorn in the company’s side for years. She frequently gives unofficial tours of drilling sites and carries a video camera. Cabot says she has repeatedly trespassed on its property, and her activities pose a safety risk to workers and visitors.
In a motion filed last week, Cabot attorney Amy Barrette claims Scroggins came within 10 feet of an access road to a well site.
“Ms. Scroggins’ conduct constitutes a blatant disregard for this Court’s Order,” wrote Barrette. “Such a flagrant violation of the clear terms of this Court’s Order must not go unchecked.”
The company is also seeking to have Scroggins cover its attorneys fees. A Cabot spokesman did not respond to requests to comment.
The feud made international news earlier this year, after Cabot got a judge to agree to bar her from all the land it owns or has leased. The restrictions went beyond blocking her from operational work sites. The prohibited area included large swaths of land the company has leased but not developed– encompassing public spaces like restaurants, grocery stores, and a hospital. It amounted to nearly 40 percent of Susquehanna County. Cabot later said it didn’t intend for the order to be so broad.
The state Department of Environmental Protection has levied a $306,570 fine against a Texas pipeline company for multiple violations involving construction of two gas pipelines in 2012 and 2013.
According to the DEP, the flawed work was performed by PVR Marcellus Gas Gathering LLC of Williamsport. That company was later acquired by Regency Marcellus Gas Gathering of San Antonio, Texas.
“Many of these violations occurred over a significant period of time,” DEP Director of District Oil and Gas Operations John Ryder said in a statement. “We expect that Regency has made operational changes to avoid problems of this nature during future pipeline construction projects.”
DEP oversight of pipelines is limited to matters related to water quality (for example, a stream crossing) and issues with erosion and sedimentation.
A bill approved by the state House and Senate would change the way drillers report gas production figures. The measure now awaits Governor Corbett’s signature.
Under current state law, gas companies have to file reports twice a year with the state Department of Environmental Protection (DEP). House Bill 2278 would require monthly production reports– a common practice among other major gas-producing states.
Transparency around gas production figures has become a sore point for some landowners who have questioned the accuracy of their monthly royalty payments. Since royalty checks are typically distributed on a monthly basis, it has been difficult for landowners to verify the information they receive from gas companies with the bi-annual gas data posted on DEP’s website.
The U.S. Energy Information Administration (the statistics arm of the federal Department of Energy) has also said monthly reporting in Pennsylvania would make its job easier.
Officials from at least seven government agencies, the railroad CSX and the refinery in South Philadelphia responded to a faux fiery train accident on a rail bridge in the city’s downtown Friday morning.
While there was no real emergency, the scenario was based on a minor derailment that happened in January that left six tanker cars intact, but leaning across the Schuylkill Arsenal Bridge.
The Philadelphia Fire Academy buzzed with activity as officials wearing badges from a variety of local, state and federal agencies made radio calls and worked in units to evacuate residents within a half mile of the hypothetical accident scene.
A picture of a crude oil tanker engulfed in flames was displayed on a screen at the front of the room. A coordinator with a microphone called out new details and told officials to stand by for more information.
It was one of several training exercises that have taken place in Pennsylvania and across the country as an increase in accidents involving these oil trains has prompted emergency officials to make sure first responders are prepared. According to a spokesman for CSX, a similar training is planned for next week in Bucks County.
“It’s critically important that we do it here in a simulated scenario rather than try to figure all of this out in an actual emergency,” said Joe Sullivan, Chief Inspector of Homeland Security and Counterterrorism with the Philadelphia Police Department.
As many as 75 trains hauling crude oil from the Bakken Shale in North Dakota roll through Pennsylvania each week on their way to refineries on the East Coast.