Industrywide Issues

We’d like to draw a contrast between the way the Republican governor of North Dakota is handling a budget shortfall, and the way the Democrat governor of Pennsylvania is doing so. ND is, in many ways, like PA. It saw a huge ramp-up in economic activity with shale drilling in the Bakken Shale over the past 10 years. In ND the drilling is for oil–in PA it’s largely for natural gas. Both states were favorable to the shale drilling industry during its formative years. Both states had Republican governors (ND still does), until the idiots voters in PA voted Tom Corbett out and the in-over-his-head-and-stubborn-as-a-mule Tom Wolf in. Wolf thinks he’s the candy man, promising to steal money from the drilling industry and redistribute it to teachers unions. With commodity prices for oil and gas approaching 30-year lows, both states are in trouble with their budgets. In ND, Gov. Jack Dalrymple has ordered across the board cuts–forcing the state to live within its means. In PA, Tom Wolf has ordered…tax increases. Wolf and the Democrats NEVER cut anything. They NEVER live within their means. They have a voracious appetite for other people’s money so they can redistribute it in a scheme to hold on to political power. We thought you might like to see how adults, like those in ND, behave when faced with a budget crisis…
Read More “ND vs PA – How Adults Behave When Faced with Budget Crisis”

Pennsylvania’s impact fee–their version of a severance tax–was crafted and became law in February 2012 as part of the Act 13 law. Since that time the impact fee has generated $854 million in revenue, with 60% of that revenue going to the local municipalities (towns and counties) where drilling actually happens, and the other 40% going to the black hole of politicians’ sticky fingers in Harrisburg for pork barrel projects. The 40% portion is the shakedown required to get the law passed in the first place. Disgusting, we know. The impact fee itself is a somewhat complex calculation with the highest fee paid during the first year and going down from there (see below). The fees across all years are based on the average price of natural gas sold at the Henry Hub for the previous year. Because the price of natgas tanked in 2015, impact fees paid by drillers will be lower than in previous years when the average price was higher. PA drillers will save $5,000 per well drilled for the first year, $5,000 per well in the second year, and so on…
Read More “2015 PA Impact Fee Goes Down for Drillers, Towns Get Less Too”