Rendell Favors W.Va. Model for Natural Gas Severance Tax
Washington PA Observer Reporter
7 September 2010
Gov. Ed Rendell told a roomful of state, local and county officials,
leaseholders and environmentalists Tuesday that the state Legislature
has four to five weeks to pass a severance tax on natural gas drilled
in Pennsylvania’s Marcellus Shale strata.
During an hour-long press conference at the county office building, the
governor was adamant about two things. He told protesters outside and
repeated during a press conference inside that he won’t support a
moratorium on drilling in Pennsylvania.
“We can’t have a moratorium, and we should not have a moratorium,” he
said, noting that the economic potential of the Marcellus Shale is too
great.
At the same time, Rendell also said he’ll veto any severance tax
proposal that isn’t sufficient to provide the necessary environmental
protections for the state’s highways and bridges, its hunting and
fishing grounds and its water resources.
“I’m not going to sign something that’s a giveaway to the (oil &
gas) industry,” he said.
“The battleground is the next four to five weeks,” Rendell said, adding
that he expects “a fair tax” to handle all protections of the state’s
natural resources without chasing away an industry that he said has led
the state in employment opportunities during the current recession.
“I don’t want to kill the golden goose,” he said. During the press
conference, which also featured comments from state Department of
Environmental Protection Secretary John Hanger and John Arway,
executive director of the state Fish & Boat Commission, Rendell
said he favors enactment of a severance tax based on the one that West
Virginia levies on its Marcellus Shale drillers.
He said that levy is a 5 percent fee on the price of natural gas at the
wellhead and 4.7 cents on every thousand cubic feet of gas produced.
But whether the Legislature will be able to deliver what the governor
wants or any version of a severance tax won’t occur until lawmakers can
sort out the myriad proposals for such a levy, according to state Rep.
Tim Solobay, D-Canonsburg.
When asked how many proposals are on the table in Harrisburg, Solobay
raised his hands.
“As many as you can count on both hands,” he said.
Later, he told reporters that there are so many variables that it was
impossible to say “what the final product will look like.”
Solobay said the final version that has the best chance of passing will
be one that considers the necessary environmental protections as well
as language that lets the drilling industry become more efficient.
“If it’s just the tax only and nothing else, it’s going to be a hard
vote,” Solobay said.