Pennsylvania Gov. Corbett Encouraging Natural Gas Production

Published April 11, 2011

Pennsylvania Gov. Tom Corbett (R) is holding firm against efforts to impose new taxes or fees on natural gas production in the state. Corbett has also fulfilled a campaign promise to end a moratorium, issued last year by former Gov. Ed Rendell (D), on new natural gas leases in state forests.

Natural Gas Boosting Economy
Corbett cites natural gas production as a key factor in revitalizing Pennsylvania’s economy, and he notes natural gas production is already creating jobs and bringing in new tax revenues and fees.

“There are businesses that have come to Pennsylvania, who’ve hired [20,000 or 30,000] people up in the areas that have been hard-hit over these last 30 years,” said Corbett in a press statement. “There are taxes coming in from that.”

Corbett’s statement is supported by a 2010 Pennsylvania State University study forecasting natural gas production will generate $10 billion in economic activity and sustain 111,000 jobs in the state economy in 2011. Natural gas will also bring in $987 million in state and local taxes in 2011, according to the Penn State study.

Targeting the Golden Egg
However, some legislators argue the state should refuse to lease any more state land for natural gas production and demand more taxes and fees from existing wells on public and private lands. 

State Rep. Greg Vitali (D-Haverford) has sponsored a bill that would impose a three-year moratorium on new natural gas leases on state lands. Rep. Bill DeWeese (D-Waynesboro) has vowed to fight fiercely for higher taxes and fees.

“For Corbett to cavalierly leave hundreds and hundreds of millions of dollars on the budget room floor by not taxing Marcellus Shale is an outrage of unspeakable magnitude,” the March 10, Pittsburgh Post-Gazette quoted DeWeese¬† as saying.

“It’s not surprising at all that governments are already looking to get money from the new shale gas. I think the federal government and every state are going to consider milking as much money as they can,” said Kenneth Green, a resident scholar at American Enterprise Institute in Washington, DC.

“Taxes by definition retard economic activity,” Green added. “So the more you tax it, the less incentive someone has to produce or sell it.”

Environmental Benefits
Todd Myers, director of the Center for the Environment at the Washington Policy Center, says such tax hikes contradict environmentalists’ stated aims. “In terms of the environment, if the state of Pennsylvania is interested in reducing CO2 emissions, this is probably counterproductive because one of the best near-term ways to reduce CO2 emissions is to switch from coal to natural gas,” he observed.

“So it’s kind of a foolish strategy if they care at all about reducing CO2 emissions,” Myers said.

Alyssa Carducci ([email protected]) writes from Tampa, Florida.

For Additional Info:

“The Economic Impacts of the Pennsylvania Marcellus Shale Natural Gas Play: An Update,” Pennsylvania State University College of Earth and Mineral Sciences, May 24, 2010: http://marcelluscoalition.org/wp-content/uploads/2010/05/PA-Marcellus-Updated-Economic-Impacts-5.24.10.3.pdf