Shapiro’s 1st Budget a Mixed Bag – Severance Tax Out, Carbon Tax In
Newly-elected Pennsylvania Governor Josh Shapiro unveiled his first-ever budget yesterday, and it was a whopper, coming in at $44.4 BILLION. We were keeping an eye on his budget for two primary things: (1) Does it include a severance tax? (2) Does Shapiro plan to get revenue from the Regional Greenhouse Gas Initiative (RGGI) carbon tax scheme? For the first, the answer is no. Thankfully, Shapiro did not lobby nor request a Marcellus-killing severance tax. Which is sure to tick off the left. However, it was a mixed bag because the budget DOES assume RGGI will kick in and provide the state with $663 million in proceeds for 2023-24. Wait, you thought Shapiro was against RGGI following his comments slamming it? Surely you’re not that dumb?
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Some 18 pro-business groups in Pennsylvania joined forces to send a letter to newly-elected Gov. Josh Shapiro and every member of the PA legislature. The letter, spearheaded by the PA Chamber of Business and Industry (also the Marcellus Shale Coalition and the American Petroleum Institute of PA), congratulates Shapiro and all those winning election or reelection. It was a verbal slap on the back. But the letter goes on to request all of these newly elected officials to work together to promote domestic energy production in the Keystone State. In other words, Why can’t we be friends?
West Virginia Senate Bill (SB) 188, the Grid Stabilization and Security Act, is aimed at making WV more competitive with its neighbors–Pennsylvania and Ohio–with respect to siting more gas-fired power plants in the state. SB 188 directs the Dept. of Economic Development secretary to identify and designate sites considered appropriate for natural gas electric generation projects. It also caps the amount of time the state Air Quality Board has to hear appeals of permits for such projects to no more than 60 days. The coal lobby was not happy with some of the language and focus of the bill, so coal got its own bill, House Bill (HB) 3482, the Coal Fired Grid Stabilization and Security Act, which does the same thing for coal that SB 188 does for natural gas.
Once a month, U.S. Energy Information Administration (EIA) analysts issue the agency’s Short-Term Energy Outlook (STEO), their best guess about where energy prices and production will go in the next 12 months. We poke good-natured fun at the EIA because one month, their predictions go up, the next month, down, etc. What about the latest STEO dart board, published yesterday? EIA slashed the price of natural gas at the Henry Hub another 11% from the previous monthly report (after cutting it 30% from the preceding monthly report), saying natgas will average $3.02/MMBtu in 2023, down from a forecast of $3.40 last month, and down from $4.90 the month before.
As we have been reporting, CERAWeek, the world’s premier energy conference, is happening all this week in Houston, Texas. MDN is not there, but there are a number of news organizations on site. One of them is Bloomberg. Yes, we know, Bloomberg tilts left. But sometimes they send reporters out who actually do real reporting, as is happening from CERAWeek. On Monday, Bloomberg filed a roundup/overview of things said at the event–both in sessions and in interviews with Bloomberg reporters. Below is the roundup from Day One of CERAWeek, which includes an interesting summary of Repsol comments that the company is investing close to $1.5 billion in 2023 in exploration and production in North America. Repsol has major operations in the Marcellus–so we can expect an expanded drilling program in Repsol’s northeastern PA assets.
As we have been reporting, CERAWeek, the world’s premier energy conference, is happening all this week in Houston, Texas. On Tuesday, Bloomberg reporters filed a roundup/overview of happenings at the event. Below is the roundup from Day Two of CERAWeek, which includes a comment by EQT CEO Toby Rice, who said he believes the natural gas market will come back into balance in the “middle half” of this year as production adjusts (i.e., less drilling) following the recent precipitous collapse in prices.
MARCELLUS/UTICA REGION: Officials working to get word out on area’s abundance of oil & gas; Pittsburgh to continue leasing fueling equipment for compressed natural gas vehicles; NATIONAL: Are enough young people entering the oil and gas workforce?; INTERNATIONAL: Natural gas markets remain tight as uncertainty persists re Chinese; With friends like these, the EU needs no enemies.