Energy Industry Pumps Legislators

Money flows to local campaigns in effort to avert tax on gas

Pittsburgh Post-Gazette
12 May 2010
By Tom Barnes, Harrisburg Bureau

HARRISBURG -- For several years, energy companies that drill for natural gas in Pennsylvania have been speaking out against Gov. Ed Rendell's plan to slap an "extraction tax" on the gas they will pump from deep underground.

These major firms, which include Dominion, Consol, Chesapeake Energy, Range Resources and others, are also putting their money where their mouths are -- pumping sizeable contributions into the campaign coffers of state politicians in an effort to avert the new tax, citizen watchdog and environmental groups said Tuesday.

"The natural gas industry made $2.85 million in campaign contributions to Pennsylvania candidates (and) political action committees between Jan. 1, 2001, and March 29, 2010," said Common Cause/Pennsylvania Director Barry Kauffman, who was joined by officials from the League of Women Voters, Penn Future and the Pennsylvania Budget and Policy Center, a liberal group.

Most of the big recipients of the gas industry largesse were politicians from Western Pennsylvania. Topping the list was Attorney General Tom Corbett of Shaler, the leading Republican candidate for governor in Tuesday's primary, at $361,000, with 93 percent of that money coming since January 2008.

Other large recipients included Lt. Gov. Joe Scarnati of Jefferson, who's also the top GOP state senator, $105,000; Gov. Ed Rendell, $84,000; Allegheny County Executive Dan Onorato, a Democratic candidate for governor, $59,000; state Rep. Dave Reed, R-Indiana, $57,000; state Sen. Don White, R-Indiana, almost $50,000; Auditor General Jack Wagner, also a Democratic candidate for governor, $44,500; Sen. Jake Corman, R-Centre, $33,800; state Rep. Bill DeWeese, D-Waynesburg, $29,000; House GOP Whip Mike Turzai of Bradford Woods, almost $26,000; Sen. Jane Orie, R-McCandless, $24,000; state Sen. John Pippy, R-Moon, $21,000.

Mr. Kauffman said he fears the large contributions will buy the energy companies influence with the Legislature, especially in efforts to block creation of an extraction tax, on natural gas pumped from areas of Marcellus shale. Mr. Kauffman said he's also concerned about the companies' attempt to stop legislative efforts to protect the environment and underground drinking water from drilling-related damage and efforts to help municipalities pay to fix roads damaged by drilling equipment.

Mr. Rendell wants to raise $160 million a year from a severance tax as one step in erasing the state's current $1 billion budget deficit. Democratic gubernatorial candidate Joe Hoeffel wants an even higher tax, to generate $300 million a year. He hasn't gotten any gas industry donations since a one-time amount of $2,000 in 2004.

Republicans who control the state Senate have opposed such a tax on gas extraction, and say Mr. Rendell should reduce state spending rather than enact new taxes.

A conservative group, the Commonwealth Foundation, said that big labor unions, whose officials sit on the board of the Pennsylvania Budget and Policy Center's parent group, gave $27 million to state politicians in the 2007-08 election cycle alone, which the foundation said is far more than what energy companies donated.

Foundation President Matthew Brouillette said sarcastically that he was "shocked, shocked to learn that an industry would start getting involved in political activity when politicians threaten to tax and regulate them."

In a related matter, Mr. Rendell said Tuesday that the state can generate the $180 million it needs to balance the fiscal 2010-11 budget without getting revenue from leasing additional acres of state forestland for gas drilling.

The state will lease, to Anadarko Petroleum Group, almost 33,000 acres in state forests, for a lease payment of $120 million. This money, combined with a $60 million surplus from forest leasing revenue from fiscal 2009-10, would eliminate the need to open to leasing any more state forest land in the next year. The state already has 700,000 acres open for drilling, about one-third of the total 2.1 million acres of forestland.

The state House last week approved a three-year moratorium on the leasing of any additional state forestland for drilling, in order to protect the forests. Mr. Rendell said he supports the moratorium, but the chances of getting the bill through the Senate are doubtful. Some senators say the state could erase some of the budget deficit through additional lease revenue.

Bureau Chief Tom Barnes: tbarnes@post-gazette.com or 717-787-4254.