Pigging Out? A Tax Would Not Hamper Marcellus Shale Drillers

Pittsburgh Post-Gazette
1 September 2010

Last Friday the head of Pitt's Center for Healthy Environments and Communities said the emissions of hazardous chemicals into the air and water from wastewater ponds at Marcellus Shale gas wells were a cause for public concern.

Conrad Dan Volz told a seminar at the university's Graduate School of Public Health that, with thousands of wells and pumping stations soon to be in operation due to the natural gas boom in Pennsylvania, research is needed to gauge the health effects of contaminants like benzene, toluene and xylene that are being released in greater numbers from fluids that fracture the underground shale.

On the same day, the state Department of Environmental Protection said that 41 of the 74 companies drilling in the shale formations in the state missed the deadline for reporting the production levels of their wells. DEP plans to follow up and get the information required by law; the agency also may pursue enforcement actions.

These are only the latest two reasons why the Legislature should not drag its feet in passing a tax on Marcellus Shale drilling. The revenue is needed to provide adequate oversight of this growing activity and to help mitigate damage that may come to local communities or the environment.

A tax, like the extraction taxes in other states, would also drive home the message that Pennsylvania wants a responsive and responsible drilling industry. Some of those in the industry and their allies in the Legislature argue that this "new" enterprise should not be strangled in the cradle with a state tax, before it can realize its potential as a jobs creator and an engine of economic activity.

While the shale drilling is new to Pennsylvania, it is not new in other states, where many of the same companies have been extracting gas and paying taxes on it for years.

One of those is Fort Worth, Texas-based Range Resources, which opened a division at Southpointe to oversee its work here. Like other corporate citizens, Range has gotten involved in the community, spending $100,000 this year at the Washington County fair's livestock auction. The company spent $36,000 alone on a prize pig, which fair officials said set a state record. The drilling firm then donated the animals back to the fair so they could be auctioned a second time to raise money for scholarships.

Range Resources is sponsoring a $100,000 scholarship program for youths in the Pennsylvania Future Farmers of America to give $1,000 awards to 100 Pennsylvania students next year. While such benefits (cynics would call them payoffs) highlight what the industry can do for communities, they also demonstrate that the companies can afford to pay the same kind of tax they are used to paying in other states.

A $36,000 pig -- or tax revenue to pay regulators to monitor drillers whose pollutants, in the words of Dr. Volz, deserve close inspection? We know what most Pennsylvanians would choose.