Industrywide Issues

Using the same class warfare language all Democrats resort to when they want to justify their enormous appetite for taxing and spending, yesterday Pennsylvania Gov. Tom Wolf introduced the highest-ever budget in PA and attempted to lay a huge theft, in the form of a so-called severance tax, on the Marcellus industry by saying, “We deserve to be fairly compensated for the use of our resources.” Just one problem Tom: IT’S NOT YOUR RESOURCES! The resources in question belong to private landowners and your proposal to steal their money, along with the money of the drillers who risk a lot of capital to drill, is abhorrent. The justification is that the money stolen will be given “to the children”–by which he means given to teachers’ unions who turned out the vote for him. The Wolf budget landed yesterday–with a thud–and it calls for $1 billion in taxes on the Marcellus industry. Wolf thinks he can get buy-in by ensuring $225 million of that amount will be kept local, like the old “impact fee.” That’s the payoff to try and get support for this Marcellus-killing budget. He plans to fork over the rest of it to Big Education as their reward for voting for him. Even the Pittsburgh Post-Gazette calls his budget “a miss” and “utter folly.” Can you believe that? It’s so bad even the anti-drilling editors at the Post-Gazette don’t like it…
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In all of the coverage of PA Gov. Wolf’s ill-fated budget–the highest ever for the state of Pennsylvania–we spotted one comment that validates what we’ve been saying for more than two years: The Act 13 “impact fee” is really just a tax. In fairness, it’s 60% fee and 40% tax because 60% of it stays in the communities where drilling happens to reimburse them for things like improving roads, extra law enforcement personnel and beefing up local fire departments. The 40% portion disappears into the black hole of Harrisburg–into greasy politicians’ fingers. In February 2012 MDN pointed out the so-called impact fee is really just a tax (see PA’s New Tax on Drilling (er Sorry, Impact Fee)). The chief architect of the impact fee, State Sen. Joe Scarnati (Republican from Jefferson) finally admitted it yesterday. He blamed Gov. Tom Corbett for not wanting to call the impact fee what it really is–a tax–and he said so to the Philadelphia Inquirer…
Read More “Sen. Joe Scarnati Admits Impact Fee is Really a Tax”

It’s not an understatement to say that drillers in Pennsylvania are in a fight for their very existence. Socialist Gov. Tom Wolf has convinced a great many PA residents in the state that it’s perfectly fine to steal money from drillers and landowners and redistribute it to Big Education. What Wolf and those who blindly follow him don’t realize is that Wolf’s nosebleed severance tax is the equivalent of a butcher knife to the neck of the goose laying Marcellus golden eggs–those eggs being jobs and current tax revenue. If Wolf & company pull the trigger on the tax, it will be catastrophic for the drilling industry in the state. Drilling is already decreasing–by huge numbers. Capital budgets for 2015 have been slashed–typically in one-third to one-half of 2014 levels. New drilling may all but stop with such a new tax–denying the tax and spend Democrats the revenue they seek “for the children.” What will they do then? The Marcellus Shale Coalition is blowing the trumpet to warn people of the coming train wreck that is Tom Wolf’s severance tax. One of the ways they are doing it is with an emailed newsletter called Marcellus Moments. Yesterday’s edition contains an excellent table showing Marcellus drillers and how much they’ve announced they are cutting back on their capital budgets for 2015. When you see it table form (below), it’s rather shocking. Do the Dems really think drillers will just keep on drilling when their already-squeezed profits disappear into a socialist tax black hole? Although the Marcellus is the biggest, it’s not the only shale play around. Rigs can be moved…
Read More “Dramatic Budget Cutbacks in Marcellus Budgets for 2015”