Tax Hike on Marcellus Shale Jobs Wrong Approach

Member Group : News Releases

For Immediate Release

June 15, 2010

Contact: Travis Windle, 724-312-2230, [email protected]

MSC: Tax Hike on Marcellus Shale Job Creation the Wrong Approach

Group urges commonsense reforms, dialogue aimed at safely expanding natural gas development, jobs in Pa.

Canonsburg, Pa. – The Pennsylvania state House of Representatives is currently considering what would be the nation’s most onerous taxes on the environmentally responsible development of clean-burning, job-creating natural gas from the Commonwealth’s Marcellus Shale formation. Kathryn Klaber, president and executive director of the Marcellus Shale Coalition (MSC), issued this statement:

"Pennsylvanians continue to face troubling economic times, with nearly one out of every ten citizens in the Commonwealth out of work today.

"Despite this difficult climate, the environmentally-safe development of the Marcellus Shale’s natural gas resources continues to create tens of thousands of good-paying jobs at a time when they’re most needed. This responsible development is not only generating hundreds of millions of dollars in tax revenue for state and local governments, but it’s also delivering clean-burning, homegrown energy supplies to struggling families in the form of affordable natural gas for home and water heaters, as well electricity.

"We will continue to work closely with the General Assembly, the governor and his administration, as well as county and local officials, to craft commonsense solutions – especially modernizing our outdated regulatory framework – that encourage competitiveness, expanded job creation and energy security.

"Unfortunately, this enormous tax hike and misguided call for blanket moratoriums on shale gas production not only put Pennsylvania on a path to become one of the least competitive energy-producing states in the country but also threatens critical capital investments, which are essential for continued job growth. Instituting new taxes and an unnecessary moratorium will only drive away jobs – what a missed opportunity that would be."
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Fact Sheet: A Taxing Concern for Pennsylvania

Letter: MSC Letter to the General Assembly

Pennsylvania Manufacturing Association: "The state can benefit from gas extraction in the Marcellus Shale strata, as long as it does not place too great of a tax burden on it. ‘There’s a huge potential for long-term growth from the Marcellus Shale; all we have to do is not screw it up,’ he said, adding that in addition to drilling jobs, the activity also ratchets up demand from other industrial sectors here, as well as creating employment in building out the pipeline infrastructure." (Washington Observer-Reporter, 6/15/10)

Penn State Economic Impact Study: "The imposition of any significant severance tax on Marcellus natural gas output could induce a redirection of investment flows to other shale plays. Any revenues gained from a severance tax could be offset by losses in sales and income tax receipts resulting from lower drilling activity and natural gas production as producers shift their capital spending to other plays." (5/24/10)
Commonwealth Foundation: "A severance tax on natural gas would negatively impact the industry’s development and stunt Pennsylvania’s economic recovery and growth. … Natural gas companies are paying among the highest business taxes in the nation. In fact, most drilling companies pay Pennsylvania’s Corporate Net Income Tax, Capital Stock and Franchise Tax, leasing fees, and royalty payments. … If a severance tax on natural gas is passed, landowners’ royalties will also be taxed, reducing the benefit to these Pennsylvanians." (Pennsylvania’s Natural Gas Boom, 6/10)