Emma Lee / WHYY
Governor Tom Corbett speaks about taxing the Marcellus Shale in an interview at WHYY in Philadelphia
StateImpact Pennsylvania’s Susan Phillips sat down with both candidates for governor and pressed them on energy issues. The candidates visited WHYY in Philadelphia, where several reporters interviewed them for about ten minutes each. Wolf has proposed taxing the Marcellus Shale gas differently than Governor Corbett. Wolf wants to charge a 5 percent tax on the market value of the gas at the wellhead. This is called a “severance tax” or some call it an “extraction tax.” Corbett wants to stick with the current impact fee, which charges a flat fee of $50,000 a well. The following is the transcript and audio of StateImpact’s interview with Governor Tom Corbett, edited for time and clarity.
Lindsay Lazarsky / Newsworks/WHYY
Democrat Tom Wolf talks to reporters at the WHYY studio in Philadelphia.
StateImpact Pennsylvania’s Susan Phillips sat down with both candidates for governor and pressed them on energy issues. The candidates visited WHYY in Philadelphia, where several reporters interviewed them for about ten minutes each. Wolf has proposed taxing the Marcellus Shale gas differently than Governor Corbett. Wolf wants to charge a 5 percent tax on the market value of the gas at the wellhead. This is called a “severance tax” or some call it an “extraction tax.” The following is the transcript and audio of StateImpact’s interview with Democrat Tom Wolf, edited for time and clarity.
Tom Gralish / The Philadelphia Inquirer
Governor Tom Corbett (L) with Democratic challenger Tom Wolf (R) at a debate in Philadelphia in October.
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
Marie Cusick/ StateImpact Pennsylvania
"If there's a change-- and the electorate will determine that-- we'll work with Governor Wolf," says David Spigelmyer, president of the gas industry trade group, the Marcellus Shale Coalition."But today our administration is a Corbett administration, and we've worked hard to make sure we have rigor to our rules in Pennsylvania."
When members of Pennsylvania’s largest gas industry trade group got together for their annual conference last week they were a bit worried.
Anyone paying attention to voter polls or listening to the rhetoric coming out of Harrisburg knows there is the very real possibility of two major changes for the gas industry— a new Democrat in the governor’s mansion and a new tax on gas production.
Most of the noise created by natural gas development is temporary. After drilling and fracking, the workers and equipment are gone. A gas well in production is pretty quiet; it’s basically just a bunch of pipes in the ground.
But compressor stations can stay noisy for years– even decades. The facilities are necessary to process and transport gas through pipelines. When it comes to noise regulations, they’re governed by a patchwork of local, state, and federal rules.
This summer the state Department of Conservation and Natural Resources (DCNR), which manages public forest land, is trying to get a handle on how these persistently noisy places affect both people and wildlife.
The agency launched a pilot study to analyze the components of compressor station sound. It’s aimed at figuring out which parts of the noise are the most irritating.
Courtesy of Tom Jones, SkyTruth
Paul Woods, left, and David Manthos with the nonprofit SkyTruth check out results from their data-scraping bot at their office in Shepherdstown, West Virginia. SkyTruth says the chemical disclosure website FracFocus is flawed.
The website FracFocus.org was built to give the public answers to a burning question about the shale boom: what exactly were companies pumping down tens of thousands of wells to release oil and gas?
Today, FracFocus has records for more than 77,000 wells. Pennsylvania is one of 14 states requiring operators to use the website as part of their chemical disclosure laws, according to the U.S. Department of Energy.
However, transparency about those chemicals remains elusive.
In the past few years, the Marcellus Shale has rapidly become one of the most productive gas plays on the planet. But for many people in Southeastern Pennsylvania– the state’s most populated region– the boom has been out-of-sight and out-of-mind.
The region is beginning to experience the tradeoffs long familiar to those who live on top of the Shale—more job opportunities and more disruption.
Thousands of supporters of natural gas development marched to the steps of the state Capitol in Harrisburg today. Estimates of up to 3,000 people from all over the state hopped on buses and turned out for the day-long event, hosted by the state’s main gas industry trade group—the Marcellus Shale Coalition.
Bob Beck works for a company called New Pig Energy, which builds liners to help contain spills.
He lives outside State College and came to the Capitol to show his support for what he feels is a misunderstood business.
“I think there’s a lot of people who really don’t understand the industry,” he says. “They feel there’s a lot of contamination that goes on. I don’t think really realize everything the industry does to prevent that from happening.”
Others at the rally felt the same way.
A proposal to build a plant that would transform Pennsylvania’s cheap, abundant natural gas into more expensive motor fuel is generating controversy in Berks County. If built, the gas-to-liquids (GTL) plant would be one of the first facilities of its kind in the United States.
But industry analysts say there’s a reason these kinds of plants are so rare– the economics often don’t make a lot of sense.
“Homes all around”
Jen Byrne watches and worries as children run around the playground behind the day care she owns. If the plant is built in South Heidelberg Township, it would be—literally–in her backyard.
Marie Cusick/StateImpact Pennsylvania
Jen Byrne owns SpringRose Childcare in Sinking Spring.
“I thought there’s no way they’d put that right there,” she says, looking out at the empty lot. “We have all these children here. There’s homes all around. My biggest concern is air and water pollution.”
The idea behind the GTL facility is to transform Pennsylvania’s natural gas into expensive liquid motor fuel–it would produce gasoline that can go right into a car.
The facility is projected to cost $800 million to $1 billion and produce about 500,000 gallons per day of gasoline and liquid petroleum. It’s planned for a 63-acre site about 10 miles west of Reading. Although the land is zoned for light industrial uses, it’s currently an empty field surrounded by residential neighborhoods.
Marie Cusick/StateImpact Pennsylvania
The newly-formed South Heidelberg Township Community Association opposes the GTL plant.
Once word got out about the plans, a concerned citizens group quickly organized. They printed up bright red “Stop the gas refinery” yard signs, t-shirts, and flyers. Nearly 300 people attended a recent meeting hosted by the group.
A Canadian developer, EmberClear, is seeking to develop the GTL plant. Jim Palumbo is a project manager for the company. He says the plant will create about 150 permanent jobs.
“We have an abundance of natural gas in the state. It makes all the sense in the world to use it in some fashion,” he says. “We want to be good neighbors. We don’t want to do something that would be a detriment to the neighborhood.”
Katie Colaneri/StateImpact Pennsylvania permalink
The company store, once owned by Jones & Laughlin Steel, sits abandoned in Bobtown, Pa.