May 4, 2018 4 min read

Pipelines, politics and a proposed severance tax dominated a natural gas news conference Thursday.

“Governor Wolf’s latest proposal to raise taxes on Pennsylvania’s natural gas industry is as misguided as the others,” said Stephanie Catarino Wissman, executive director of Associated Petroleum Industries of Pennsylvania.

Wissman addressed reporters in a statewide conference call, along with David Spigelmyer, president of Marcellus Shale Coalition; Gene Barr, president of Pennsylvania Chamber of Business and Industry; and Bob Beatty, chairman of Pipeline Gas Market Development Committee. They were largely in concert with one another on their sentiments regarding the oil and gas industry.

Gov. Tom Wolf is pushing a severance tax in his proposed budget, a levy that gas-producing companies are paying in other states. In Pennsylvania, this would be in addition to the impact fee, which producers pay per operating well. The impact fee has raised more than $1 billion, with much of the money going to communities impacted by the industry.

Wissman called a severance proposal “misguided,” saying the tax on top of the impact fees could cause gas companies to cut production from operating in the Keystone State, where the oil and gas industry has been strong.

“The facts haven’t changed,” she continued. “Raising costs for one of the state’s major economic engines is bad economics. It’s bad for Pennsylvania employment, and bad for hundreds of local businesses in the natural gas supply chain, including many that dot the landscape of Pennsylvania’s main street economy.

“Instead of looking for ways to raise costs for one of Pennsylvania’s most dependable job-creating sectors – jeopardizing investment in all 67 counties – state officials should prioritize pro-energy policies such as building out more energy infrastructure to help Pennsylvania consumers, workers and the environment continue to benefit from our state’s vast natural gas resources.”

Spigelmyer, whose coalition represents about 200 natural gas-related companies, said the severance proposal “is full of political rhetoric. I say it’s another assault on an industry that’s already been impacted. We already have a tax. It’s called something else (impact fees).”

He said funds from a severance tax would be targeted for “unfunded pension obligations,” and referred to the tax as a “punitive measure” for the oil and gas industry.

“The governor says this duplicative tax would not cost jobs,” Spigelmyer added. “Well, some companies have already left Pennsylvania. This would cost jobs and erode possibilities for Pennsylvania.”

Barr said the state “doesn’t have a lot of natural advantages. This is one. Why put a tax upon a tax?” A severance tax, he added, makes it appear that the oil and gas industry is being singled out.

Beatty, of PIOGA, said his group’s membership “has decreased about 40 percent over the past two years because people are packing their bags and moving to states that are more industry-friendly.

“If we have tax upon tax upon tax, the cost will eventually fall on the consumer. We cannot afford to take a hit on our abundant energy because it will have an economic impact, then it will have an environmental impact. If wells are not maintained, that will foster an environmental issue and taxpayers will pay for the cleanup.”

All four speakers agreed that accessing natural gas is one thing, but it must be transported to be a valuable resource. They spoke in favor of the Mariner East 1 and 2 pipeline projects. The state Public Utility Commission on Wednesday voted to allow Sunoco to restart Mariner East 1. Construction was allowed to resume on Mariner East 2 in February after agreeing to pay a $12.6 million fine for environmental violations.