Natural Gas Companies, Policy Group at Odds Over Tax

Pittsburgh Post-Gazette
25 June 2010

Natural gas companies are pushing to avoid two-thirds of the proposed extraction taxes that a Pennsylvania policy group is supporting.

But Pennsylvania Budget and Policy Center Director Sharon Ward urged state lawmakers Thursday to oppose what she called "front-end and back-end exemptions" being considered for natural gas drillers.

Ms. Ward said that under the exemptions drillers would not have to pay taxes during the first three years of production and once a well is past its prime and production dwindles.

The taxes, which some see as a crucial component to this year's budget, would cover less than a quarter of a well's average lifespan, she said.

Ms. Ward was joined at a news conference by state Rep. David Levdansky and Jan Jarrett, president of the environmental group PennFuture.

"I don't really think at this point there needs to be any additional givebacks to an industry that is characterized by ... increasingly large, multinational energy giants," said Mr. Levdansky, D-Forward.

But Nathan Benefield, of the conservative Commonwealth Foundation, said it is unfair to tax natural gas companies in Pennsylvania on a higher level than other businesses.

"I don't think they understand what a tax exemption is," he said. "What they are calling for is a new tax specifically on those new companies."