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Old 05-15-2009, 03:03 PM
shane shane is offline
Join Date: May 2009
Posts: 58
Default Natural gas tax is the way to go

Damage reports are already coming in associated with gas and oil drilling in Pennsylvania. Gov. Ed Rendell's proposed 2009-10 budget includes a new natural gas severance tax, whose new revenues would help mitigate the Keystone State's budget deficit and help address such drilling-related environmental problems.
The state Department of Environmental Protection said this week that an Ohio-based gas and oil drilling company has polluted at least seven water wells in north central Pennsylvania. Schreiner Oil and Gas Inc. drilled some 26 oil or gas wells recently in McKean County, causing methane gas to migrate into the groundwater. The DEP said two water wells became polluted with the gas, five others with excessive iron and manganese. Schreiner is supplying bottled water to the affected residents and hotel costs for one family.
Pennsylvania ranks 15th in natural gas production. Yet unlike 38 other states, it does not collect an extraction tax on this valuable resource. That may partly explain the rush to capitalize on the fuel.
Companies have combed through courthouse property records in county courthouses and continue to clinch deals with landowners sitting atop the methane-rich Marcellus shale deposit.
Gas extraction carries environmental risks. There's earth-moving associated with building the drilling pads. Once the wells are functioning, groundwater generally flows into the voids left after the methane is removed, risking pollution like that in McKean County. Some experts say this process could lower the water table as well. Above ground, truck traffic increases. Populations of rural areas rise as companies add personnel.
A natural gas tax would help spread the cost of growth, including addressing almost inevitable environmental damage, wear and tear on roads and impact on area schools. Tax revenues would be essential should extraction prove devastating to an area's precious ground water. Furthermore, a gas tax could boost revenues during a period when Pennsylvania faces up to a $3 billion budget shortfall. The governor's office projects the tax could generate up to $107 million in the first year, and as much as $632 million within five years.
Coal, gravel, limestone and other extracted substances are subject to a tax. Natural gas should be, too, allowing communities that experience sometime adverse impacts of extraction to receive some of the financial benefits. The legislature should change the statute to allow a tax on natural gas extraction.
The severance tax offers a fair way to make sure that all Pennsylvanians benefit from our natural gas resources.
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