Apr 8, 2018 2 min read

State can’t maximize energy resources with severance tax

Gov. Tom Wolf’s latest rhetoric concerning regional energy development is a real head-scratcher. Last week, he extended an agreement with Ohio and West Virginia to maximize the use of our states’ shared energy resources. Last month, however, he continued to advocate for adding a severance tax on natural gas, which threatens to harm production of those resources. Clearly, his words and actions do not line up.

Thanks to our abundant supply of natural gas, the commonwealth is experiencing a manufacturing revival and new opportunities to generate jobs and investment in Pennsylvania for years to come. From this perspective, it makes sense that Wolf would want to do everything he can to encourage energy development in the state. But why, then, does he continue to insist on massive energy tax hikes that would undoubtedly impede – if not stifle – this development?

What makes Wolf’s energy tax proposal even more confusing is the fact that Pennsylvania’s natural gas industry is already taxed. Companies pay impact taxes on wells that have generated more than $1.5 billion in new revenue since 2012. Most of that money goes back into communities, restoring parks, waterways, and roads – even in counties where no drilling takes place.

Simply put, the governor cannot say he is working to “ensure that we are doing everything we can to support additional development” while advocating for higher energy taxes. If Pennsylvania is going to become the energy powerhouse it has the potential to be, Wolf must start proposing policies that reflect his words.

Mark D. Caskey

Caskey is president of Steel Nation in Washington.