Sunday, June 13, 2010

Pennsylvania Severence Tax - What, Where, How, and When

The severance tax on natural gas is not a bad idea for Pennsylvania.  I would recommend the following:

1. The Severance Tax should be applied to all natural gas development that is being done by non-PA small  businesses and I do not believe the tax should apply to relatively shallow vertical wells.
2. The Severance Tax should not be used to bailout the PA State Budget, fund school programs, fund the development of any Marcellus Shale Centers or Economic Research, but should be used to invest in the State infrastructure, alternative and renewable energy, invest in cleaning up contamination associated with leaking underground gasoline (abandon sites), capping and cementing abandon wells, stabilizing and remediating mine land, community education and workforce development for non-petrochemical industry, buying development and mineral rights, and specific growing greener initiatives that related to water reuse, stormwater management through community redevelopment using "smart growth" and low-impact development and similar projects.

3. Since the gas is a state resource, a portion of the revenue should be used to reduce state and school tax burden of the homeowners and landowners. 

Here's a taste of their extensive wish list. A severance tax could . . .



1.Plug this year's budget shortfall.  - No

2.Monitor public health impact. - No  - this should be an industry funded study with 3rd party review.

3.Preserve state's natural resources.- YES- but we should own the mineral and gas rights and consider developing

4.Create an escrow fund for community adjustments.- No - This should be accomplished by the Company funding local projects and monies collected by real fines.


5.Fund research on economic, environmental, and health effects. No - this should be an industry funded study with 3rd party review or a federal project.
6.Aid affected municipalities. No - This should be accomplished by the Company funding local projects and monies collected by real fines - higher road bonds
7.Aid affected counties. No - This should be accomplished by the Company funding local projects and monies collected by real fines, permit review fees at local level and possibly stormwater inspections.
8.Help municipalities deal with crime.No - there is a lot more crime associated with drugs.  They can collect fines and other court costs.

9.Cover the costs of environmental cleanup.- Yes for projects that are not related to current natural gas development - but abandoned sites such as landfills, gasoline stations, etc.

10.Fund infrastructure repair. - YES - especially water and sewer and stormwater projects, developing alternative energy systems, and making public buildings energy efficient.

11.Cover emergency services. No- this should be funded by the Company and covered by fines.

12.Mitigate other social costs of drilling. No- What social costs???


 13.Build roads. No- this should be funded by the Company and covered by fines.


14.Build bridges.No- this should be funded by the Company and covered by fines.

15.Train employees for natural gas jobs. No- this should be funded by the Company through grants - we should fund alternative energy and renewable energy training and installation.

16.Extend Gov. Rendell's Growing Greener II program, which already received $625 million of taxpayer dollars.  YES - but projects need to be more focused
17.Make bond payments for Growing Greener. YES

18.Preserve farmland. YES- but mineral, wind, and gas rights should be included.this land should be used for the community benefit -this means that land needs to be managed for the economic and environmental benefit of the community.  This may not mean just farming - but energy projects.
19.Purchase open spaces.YES- but mineral, wind, and gas rights should be included.  If we purchase open space - this land should be used for the community benefit -this means that land needs to be managed for the economic and environmental benefit of the community.



20.Fund state parks. NO - this should be funded by higher fees at the park, leasing gas, and grants from Industry.

21.Help with environment restoration.   Yes - If we are speaking about mine land, abandon landfills, but not old industrial sites.

22.Aid mine reclamation.- Yes

23.Plug old wells. Yes

Using a gas tax a a "dedicated funding stream" has been suggested, for a number of state government funds, including:
1.The Environmental Stewardship Fund.- Yes, but projects have to be focused and sustainable
2.Conservation District Fund - Yes, but the conservation districts should also be able to obtain fees from gas permit reviews and on-site inspection of stormwater facilities.
3.The Pennsylvania Game Commission - Yes - if they can use to purchase land with mineral, wind, and gas rights.
4.The Pennsylvania Fish and Boat Commission - Yes - if they can use to purchase and obtain water rights- but a large junk of funding should come from permit review fees and fines.
5.LIHEAP - NO  - Not paying a gas bill - but only weatherization that improves energy efficiency and the installation of alternative and renewable energy - if this is done on rental properties the landowner most either report the benefit as income or pay a portion of the value of the improvement. 6.Hazardous Sites Cleanup Fund - YES
7.Liquid Fuels Tax Fund- but this should target the purchase of equipment that is energy efficient and perhaps uses alternative and renewable fuels and should cover the installation of alternative and renewable energy on public buildings (if this is possible)

A very interesting calculator - I am not confirming that it is accurate.

Check out the Severance Tax Ticker online: www.pennbpc.org/severance-tax-ticker.
The Ticker can be embedded on other web sites by copying the "Embed Code" from the upper-right-hand corner of the Ticker. View the methodology used to create the Ticker: www.pennbpc.org/severance-tax-ticker-methodology

These are just my thoughts -article in development
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1 comment:

  1. I can not disagree more on the following statement made by Citizens Marcellus Shale Commission.

    "State lawmakers are getting closer to adopting a Marcellus Shale drilling tax that COULD pay for drilling impacts and restore cuts to education, colleges and universities."

    A few items

    1. Drilling impacts need to be paid by the drilling company. Larger and more significant fines and cleanup cost
    2. Monies should not go to industry job training.
    3. Monies should not cover the cost of maintaining a PADEP program or hiring inspectors that is why we have permit fees.
    4. Monies should not be use for road projects to support drilling and development – industry should pay
    5. Monies should not be used for pension obligations or maintaining govts budget
    6. Monies should not restore cuts in colleges and university budgets

    The funds are the citizens of PA

    Monies should fund

    1. Alternative renewable energy and energy conservation.

    2. Installing energy conservation in homes not tax credits – grants- install a geothermal system in every private home in Pennsylvania – over giving money to a college for a short term goal.

    3. Education grants – Not Loans- to citizens- let citizens pick which college the students can attend and give them purchasing power.

    4. Reduce tax burden on homeowners

    5. Our real problem – Stormwater Management and the lack of real infrastructure.

    6. Promote Sustainable Economic Development

    7. A program to fix private wells in Pennsylvania.

    Give the power (financial power) back to the citizens and individuals of PA and not the 501c3, Universities, Govt, and other NGOs

    Just my thoughts



    Brian Oram, PG
    Citizen

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