Other Opinion

OTHER OPINION: SHALE DRILLING

October 11

Gas ‘impact fee’ well short of fair

ALTHOUGH Pennsylvania Gov. Tom Corbett has called for counties and local municipalities to impose an impact fee on firms extracting natural gas from the Marcellus Shale formation, it doesn’t go far enough and virtually gives away a Pennsylvania resource.

Corbett called for an impact fee of up to $160,000 per well paid over 10 years to help pay for the cost to regulate the drilling and fix any environmental damage.

If Corbett’s proposal were to clear the Legislature intact, 75 percent of the funds collected would be split by counties and municipalities that are home to the drilling for a wide range of uses, including improvements to roads, bridges and water and sewer systems. The revenue also could be used for social services and emergency responders.

The remaining 25 percent would go to the state for environmental protection, road and bridge improvements, health studies, emergency response and pipeline safety.

Corbett estimates that the plan would generate up to $120 million in the first year and up to $195 million by the sixth year, which hardly would register in a state budget of $27.15 billion.

It is substantially less than the proposals put forth by many in the Legislature, including some in the governor’s own Republican Party. Nevertheless, legislative leaders generally offered early support for the governor’s impact-fee proposal.

But as we have said before, Pennsylvania is the largest gas- and oil-producing state in the nation that does not impose an extraction tax.

Concerns that a tax would kill the industry, as Corbett reiterated, are unfounded. If the gas deposits in the Marcellus Shale are going to be tapped, the drillers are going to have to do business in Pennsylvania. The drillers are not going anywhere. The jobs will be created.

State officials owe it to the people they represent to extract a fair price from the companies doing business in Pennsylvania, and that means more than $160,000 per well over 10 years.

Reading Eagle

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