This is the fourth in a series of interviews with the gubernatorial candidates on issues related to shale gas development in Pennsylvania.
Meet the candidate in a brief video, and read a more detailed transcript of our interview below. Both the video and transcript have been edited, separately, for length and clarity. The primary is on May 20th.
Name: Tom Wolf
Party affiliation: Democrat
Residence: Mount Wolf, York County
Occupation: Chairman and CEO, The Wolf Organization, Inc.
Campaign website: www.wolfforpa.com
Q: Do you support a severance tax or the current impact fee on natural gas extraction?
A: I’m proposing a 5 percent severance tax I call it, although I’m not quite sure what the distinction is between that and an extraction tax or even the impact fee. The impact fee is about 1.3 percent of market value right now, depending on your calculation, and [most] of that goes to local government. My severance tax would be imposed as a percent of the market price at the wellhead which right now I think is around $4 per thousand cubic feet, which according to some estimates would raise around $700 million in the first year. The hope is as the price goes up, as demand goes up, it would be higher in the future.
Q: How would you spend the money?
I would use it for four things. The first thing is it would be replacing the impact fee so that a part of the $700 million would have to go to support localities willing to shoulder the burden of having this extraction industry in their areas.
The second part would be to pay for the enforcement of the regulations that we need to have in place to make sure that we’re not destroying our environment. I am sensitive to and I understand and appreciate the genuine concerns of environmentalists who are concerned that this might effect our other natural resources in Pennsylvania and we need to do everything in our power to make sure we’re doing this right.
Third, I think we need to make sure we’re building a bridge to a sustainable energy future and to the extent that other administrations have done this in the past, I think they’ve been successful at creating demand for products that are sustainable, renewable and non-polluting like wind and solar. I would like to use some of that money to fund building that bridge. Right now, it is not economical given the price of electricity for photovoltaic cells to be installed. The cost and the efficiency does not warrant making that kind of investment, but each year, we get better and the producers of photovoltaic cells make their products much more efficient, so we’re moving to the point where they will be economical.
Fourth, and I think the biggest chunk is to fund education and to use that to restore the billion dollars that was cut by this administration from our K-through-12 education program.
Q: How is the state doing with environmental oversight of the gas industry?
A: I think it’s not doing a very good job at this point. I think the regulatory infrastructure is underfunded, so we’re not actually enforcing the regulations that are in place. As a second issue, we need to make sure the regulations that are in place are adequate, but even those in place right now, we seem to be having a problem enforcing them. Third, we have a problem in terms of just granting permits. We don’t have enough people in the Department of Environmental Protection to keep up with demand. If the price, as I hope it will, rises and demand increases for more drilling, I think we’re going to have trouble keeping up with the demand.
Q: Do you support any changes to any of the current moratoriums? Note: There is currently a moratorium on new oil and gas leasing in state parks and forests and on hydraulic fracturing in the Delaware River Basin.
A: There’s a moratorium on the Delaware River Basin. I support continuation of that moratorium and I support a moratorium on drilling in any state lands, forests. I think the state has done quite enough to be used as a place where drilling can take place. That started in the Rendell administration. I think we ought to return to the idea that state lands are there to preserve our natural resources and as such, they ought to be places of refuge, places people can go to see nature in its great beauty and unvarnished beauty and for that reason I’m against further drilling on those lands.
Q: How would you ensure Pennsylvanians benefit from oil and gas jobs?
A: I think the best way to do that is to make sure our education system is providing the skills most relevant and necessary to the industry. I think if we do this right, this could be a very constructive force for Pennsylvania’s economy. It could create good jobs and it could be an industry that actually puts us in the vanguard of economic development in the country.
Q: Could the state be doing more to protect the interests of royalty owners?
A: I believe the state should be doing more to support the property owners who are leasing their lands and looking for royalty streams. It is a highly unregulated portion of the industry and as a result, landowners are being treated very differently and in some cases unfairly. I am not sure what the best solution is, but the state needs to play an active role in making sure the landowners in Pennsylvania who are giving up their land and allowing drilling have basic consumer rights and [that] they know what they’re getting into and that both sides in the agreement live up to their sides of the bargain.
Q: What are your views on man-made climate change?
A: Well, I believe that we ought to in this case as in every case, we ought to be listening to the scientists who are telling us what’s going on. I think there is a lot of evidence from a lot of very bright people that human beings are playing a big role in climate change and are there uncertainties? Absolutely. Are we dealing with areas of theory in some cases? Absolutely, which is what we always do and we have to make decisions based on the best theories that we have out there. And it looks like we need to do something and we need to do something quickly.
Pennsylvania is a big state and has a responsibility to play a constructive role. We have a climate change impact statement that the [Department of Environmental Protection] is supposed to come out with. We need to do that on time, we need to make sure that the department is doing what it’s supposed to be doing under the act in place right now and I think we ought to be looking for opportunities wherever we can to make sure that we’re eliminating the potential sources of climate change. [That is] why one of my four things for the money coming out of the severance tax would be to make sure that we’re building a bridge to a sustainable energy future, not just building up one more entrenched interest around a carbon-based energy source.
Q: Describe your long-term vision for Pennsylvania’s energy economy.
A: I think the bridge that we’re building has to be for everybody, not just Pennsylvania, that we need an energy future that is sustainable, renewable and clean. At this point, there are certain hydroelectric sources that fit that bill, but so does wind and so does solar. We need to figure out how to move to that energy future where we are powering our economy, our homes, our cars, our trains, planes, with something other than a carbon-based fuel.
What we need to make sure we do in this case with natural gas is make sure we are exploiting it, that we’re using it to make Pennsylvania’s economy stronger and we need to do it right so we’re not destroying the environment. But we also need to do it in a way that we make sure this is a bridge to a sustainable energy future. This is not the end point. We’re on the way to something else.