More on PA’s Potential Gross Receipts Tax on NatGas
Last Friday MDN told you about the latest plan to tax Pennsylvania natural gas–something called a gross receipts tax (see Ploy to Rename PA Severance Tax as “Gross Receipts” Tax). We now have a bit more detail on what that plan is. A gross receipts tax is nothing more than a sales tax that would be assessed on users of natural gas. It’s meant to transfer wealth from those who use natural gas into the pockets of Big Education (i.e. teachers unions), the same way a severance tax was meant to do. There is an important difference between a gross receipts and a severance tax. A severance tax would tax all natgas coming out of the ground. A gross receipts tax would tax only that gas sold and used in Pennsylvania–by end users (consumers, businesses, power companies, etc.). So the gas that gets shipped out of state wouldn’t be taxed. And therein lies the rub. Not only is Wolf & co. trying to use a shell game to move the tax around and make it appear that it’s not a tax on the drilling industry, their plan (we’re convinced) is to get this idiotic tax in place and then, next year or the year after, begin talking about how “unfair” it is that all of that gas going out of state isn’t taxed the way the gas is taxed in state–and “we have to close the loophole.” That’s how the game is played by tax & spend liberals like Wolf. Our advice to GOP legislators: JUST SAY NO. PA has a spending problem–not a taxing problem. Here’s the latest on the gross receipts tax idea…
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What if you’re an heir to land that was drilled on or under in Pennsylvania? There may be money “ready and waiting to be distributed”–there for the asking. But the asking is a bit complicated. In cases where the owner(s) of the mineral rights for a piece of property is unclear, the PA Dormant Oil and Gas Act (DOGA) comes in to play. What is DOGA and how does it work?…
An update on Spectra Energy’s Texas Eastern Transmission’s (TETCO) “Delmont Line 27” which exploded in Westmoreland County, PA on April 29 (see 
In February, a Philadelphia judge for the Court of Common Pleas (low-level court in PA) ruled in favor of the anti-drilling Clean Air Council against Sunoco Logistics Partners and their Mariner East 2 pipeline (see 
Democrats just love to help themselves to OPM–other people’s money. They have a spending habit the equivalent of a crack junkie. Ever notice how junkies use very creative ways to try and feed the habit? One of their favorite tactics is to euphemize–call the same thing by a different name. In Pennsylvania, big-spending Dems in the legislature, along with their big-spending governor, Tom Wolf, are at it again. A severance tax is a tax on natural gas as it comes out of the ground–“at the wellhead.” You measure what comes out and you tax it. Another way to tax the same thing is called a “gross receipts tax”–which taxes the value the gas was sold for. In essence, a gross receipts tax is a sales tax. The price of the underlying good being sold goes up–so does the tax (it’s a percentage of the sales price). At the end of the day, a tax is a tax is a tax. You can call it a severance tax, or you can call it a gross receipts tax–it’s the same thing: a tax. Because Dems have short-term memory issues, we’ll remind the Dems reading this that Marcellus gas is ALREADY TAXED–by two different taxes: an impact fee and corporate income tax (on profits). PA is already paying the equivalent of a very healthy severance (or gross receipts) tax. But all the Dems can see are big dollar signs–that a gross receipts tax could raise $500 million per year or more–to feed their enormous big spending habit…
This week the Developing Unconventional Gas (DUG) East event was held in Pittsburgh, PA. There was a fair bit of news and a host of interesting stories coming from the event. Below we’ve listed stories worth your time, with a very brief summary of why to read those stories. To tease you: the money people think land deals are about to pick up in the Marcellus/Utica; Dept. of Energy Deputy Director Carmine Difiglio signs the praises of the Marcellus/Utica; in the weeds talking about technology; CONSOL’s plans for the Ohio Utica; and much more!…
In May MDN told you that the Penn Township (in Westmoreland County, PA) zoning board voted to refuse to grant a permit to Apex Energy to build a DEP-permitted well pad in the town (see 
Rex Energy Corporation, one of our favorite smaller Marcellus/Utica drillers, issued an update on their Marcellus drilling program on Tuesday. You may recall that just last week Rex announced they were selling off the rest of their non-Marcellus acreage to become a pure play driller (see 
The coming Shell ethane cracker plant complex in Monaca (Beaver County), PA, will create a lot of jobs–some in the near-term, but many in the medium-to-longer term. The plant won’t be complete for another five years. Between now and then it will take 6,000 temporary workers to build it. Once built, the plant will take 600 permanent employees to run it. Is Beaver County and the greater Pittsburgh region ready for that kind of jobs challenge? As of today, the answer would be “no.” But leaders in the area are working on it…
Last year Pennsylvania Gov. Tom Wolf thought he could win in a game of “chicken” with Republican majorities in both the PA House and Senate. Wolf tried to ram down their throats a number of tax increases–including a raise in the personal income tax, sales tax, cigarette tax, severance tax–just about any tax you can think of. Wolf lost. The budget was a disaster because he wouldn’t negotiate, wouldn’t compromise, wouldn’t do anything. He was banking on a liberal media to come to his support. In the end, even the media abandoned him as a hardheaded putz. This year Wolf is singing a different tune. He’s not demanding higher taxes and enormously bloated spending increases across the board. However, Wolf is still obstinately insisting on a Marcellus Shale severance tax–even though the industry is on the ropes and in survival mode. Just when we thought he was wising up…
Pennsylvania state officials estimate there are as many as 200,000 abandoned oil and gas wells in the state–the vast majority of them conventional wells drilled over 50 years ago. Most of them are not mapped or known. Some of them are hazards for shale drillers who stumble across them when drilling new wells. If you drill horizontally and clip an old/abandoned well, it becomes like an elevator pumping fluids and gas to the surface. Not good. Everyone is committed to finding and marking and capping these old wells. In March, MDN highlighted the issue (see 
In August 2013, Moxie Energy of Vienna, VA sold the permits/rights to build a new Marcellus gas-powered electric generating plant in Bradford County, PA to Panda Power Funds of Dallas, TX (see 
Last December Pennsylvania’s felony-indicted Attorney General, Kathleen Kane, brought a lawsuit against Chesapeake Energy, Anadarko and Williams accusing them of, among other things, royalty fraud (see 
An issue we’ve highlighted before and one we’d rather not talk about–but must–is the issue of layoffs in the Marcellus/Utica industry. A recent article in the Pittsburgh Times-Tribune paints a heart-wrenching picture of how layoffs are affecting places like Westmoreland County, where personal bankruptcies and home foreclosures are spiking due to energy industry layoffs…