Pennsylvania Democrats Still Hell-bent on Taxing Natural Gas

The Scranton Times-Tribune reports that Pennsylvania Democrats, including Gov. Ed Rendell, are on a mission to tax natural gas drilling in the Marcellus. Let’s name some names, shall we?

House Finance Chairman David Levdansky, D-39, Pittsburgh, and Environmental Resources Chairman Camille George, D-74, Houtzdale, joined with statewide conservation groups Monday to widen the debate over proposed state taxation of natural gas produced by drilling deep pockets in the Marcellus Shale formation, underlying much of western and Northeast Pennsylvania.

Gov. Ed Rendell has proposed a 5 percent severance tax in hopes of generating an estimated $107 million for state coffers. The tax would be levied on the value of natural gas at the well.

Not to be outdone by the government, the so-called conservation groups have their hands out too:

The conservation groups, including PennFuture and Pennsylvania Federation of Sportsmen’s Clubs, say some of that revenue should go for conservation projects, the state Game and Fish and Boat Commissions and to help local governments repair roads.

The coalition isn’t suggesting a specific amount at this point, said Andy Loza, an official with the Pennsylvania Land Trust Association.

And the pièce de résistance:

“Implementing a severance tax on natural gas is a no-brainer,” said Mr. George, who is drafting legislation to set standards for treating water used in drilling.

Taxing the fledgling PA gas industry into oblivion is a real no-brainer for those with no brains!

Read the full article: Shale tax ideas debated

Susquehanna River Basin Commission Approves 26 Applications for Water Use

At a recent meeting of the Susquehanna River Basin Commission held in Scranton, PA, the group approved 26 applications to use water from the Susquehanna River watershed for drilling in the Marcellus Shale deposit. At the meeting, the Commission imposed new rules about posting signs at sites along rivers and creeks where water is drawn for use in drilling.

Among the permits approved by the commission, according to the Susquehanna Independent Weekend, is permission for ALTA Operating “to draw up to 3 million gallons per day from the Susquehanna River and 99,000 gallons per day from Snake Creek, both in Susquehanna County.”

Read the full article: New rules for gas drillers

Europe Invests Heavily in American Natural Gas Drilling in the Marcellus, Details of Chesapeake/StatoilHydro Deal

The Fort Worth Business Press reports European companies are making major investments in American shale plays, including the Marcellus. The article reports the following details about Chesapeake Energy’s new partner Norwegian-based StatoilHydro:

Norwegian state-controlled energy company StatoilHydro would pay $3.375 billion for a 32.5-percent stake in [Chesapeake’s] 1.8 million net acres of Marcellus Shale assets, according to a November 2008 agreement. StatoilHydro paid $1.25 billion in cash at closing, and the remaining $2.125 billion over the next three years “by funding 75 percent of Chesapeake’s 67.5 percent share of drilling and completion expenditures until the $2.125 billion obligation has been funded,” according to the Nov. 11 statement.

“This deal adds a major building block to the gas value chain position we have established in the U.S., the world’s largest and most liquid gas market,” said StatoilHydro President and CEO Helge Lund in a statement. “This is a significant step in strengthening our U.S. gas position, building on our existing capacity rights for the Cove Point LNG terminal, our gas trading and marketing organization and the gas producing assets in the Gulf of Mexico.”

Read the full article: Europeans see benefits in U.S. shale