PA Sev Tax Dead in This Year’s Budget, Gov Wolf Trash Talks House
For some reason Tom Wolf has successfully cultivated a public persona of a genteel, non-partisan businessman–from the very beginning of his race for the governor’s chair even through today. We weren’t fooled, but many were. He’s proven to be just what we thought he was: a vicious partisan liberal, a spoiled rich kid who grew up to be a spoiled rich adult. Someone who throws a fit when he doesn’t get his own way. The severance tax is a perfect example. From his first day in office, Wolf lobbied hard for a severance tax. Such a tax was thought to be an easy way to pour billions of dollars into “education.” It was Wolf’s quid pro quo with Philadelphia teacher’s unions. They voted him into office, and he would repay them with big money–getting it from an “easy mark”–the Marcellus industry. Turns out the industry wasn’t such an easy mark after all. It has been a long, bloody fight, but the fight (for this year) is now over and Wolf has lost, third year in a row, to get a severance tax passed. His anger bubbled over last week and Wolf revealed his true character. When asked about the budget process, Wolf’s office issued this statement about House Republicans, attributed to Wolf: their opposition to a severance tax “has revealed the worst of Harrisburg.” In other words, Wolf just called House Republicans, his principled opponents, “the worst of Harrisburg.” His comment is the political equivalent of a five year-old stomping his feet and throwing himself on the floor when he doesn’t get his own way. Thank God for House Republicans who held the line against this insane severance tax, and shame on Senate Republicans who turned traitor. Hopefully they’ve learned a lesson from their courageous House colleagues about holding the line…
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Last week the University of Pennsylvania published “Pennsylvania’s Gas Decade,” a study looking at the impact of the Marcellus Shale on the state’s utility customers over a ten-year period, from 2007-2016 (full copy below). The study shows that on average, PA customers now pay 40% less for natural gas than they did ten years ago. The study also shows electricity customers are paying less–thanks to the Marcellus. Before Marcellus drilling began, PA produced 1% of the nation’s natural gas supplies. Today? PA produces 16% of our country’s natgas supplies. Thank you Marcellus! The study’s author predicts the trend toward lower natgas prices for PA residents will reverse–eventually. Why? The Federal Energy Regulatory Commission has approved a staggering 53 interstate pipeline projects that cross PA (more than twice that of any other state). Once/if those projects are built, more gas will flow out of the state, meaning prices for gas will rise. Hey, drillers aren’t sticking around in PA just to break even or lose money. They are in the state to make money, and part of making money is getting the gas to other markets. In the meantime, before the plethora of pipelines are built, PA residents should enjoy the low prices they’re paying…
This is the perfect illustration of how parts of state government, like the so-called Environmental Justice division of the Pennsylvania Dept. of Environmental Protection (DEP), get co-opted by Big Green groups. In 2015 then-Secretary of the DEP, John Quigley, “reactivated” the Office of Environmental Justice at the DEP to give poor folks and minorities an important new weapon to oppose shale drilling (see 
The Pennsylvania legislature has spoken. The PA Senate and House have now sent all three budget-related bills to liberal Gov. Tom Wolf for his signature. In the end, severance tax proponents, including traitorous Republicans in the Senate (and House), could not ramrod through a new, punishing tax on the Marcellus industry–on top of the many taxes the industry already pays. RINOsaur Gene DiGirolamo could not get his 3.2% severance tax bill passed in time for this year’s budget–but it hangs out there like a zombie, not quite ready to die, just yet (see 
While Pennsylvania legislators and PA Gov. Tom Wolf work to finish up the four-month-late state budget, the issue of whether or not to enact a severance tax to help pay for Harrisburg’s wild overspending is still alive. We think it’s mostly dead, but the severance tax keeps coming back to life like a zombie in a B horror flick. The latest incarnation comes from a Republican in Name Only (RINO), Gene DiGirolamo, a Philadelphia area member of the PA House. As we previously reported, DiGirolamo’s House Bill (HB) 1401 would slap a 3.2% severance tax on top of the existing impact tax, which is the equivalent of a 5%+ severance tax already (see 
Yesterday MDN told you about two different environmental “riders” snuck into the Pennsylvania Fiscal Code bill that is part of the annual state budget (now four months late). The riders have nothing to do with the budget or raising revenue. It’s a sleazy political ploy to pass unpopular measures that wouldn’t get passed on a standalone vote. One of the riders changes the terms of existing leases by allowing drillers to reactivate old/expired leases, either by restarting production or by drilling a new well if the landowner doesn’t object within 90 days of notification (see 
In August Energy Transfer’s Sunoco Logisitics unit struck a deal with the devil–the devil being the Philadelphia-based Clean Air Council, THE Delaware Riverkeeper and Mountain Watershed Association–in a move to lift a ban on underground horizontal directional drilling (HDD) for the Mariner East 2 NGL pipeline project (see 
Last week the The Independent Power Producers (IPPs) of Ohio, Pennsylvania, and West Virginia wrote an official letter to the Federal Energy Regulatory Commission (FERC) detailing their objection to a proposed plan by the Dept. of Energy (DOE) to give special treatment to electric power generating facilities powered by coal and nuclear plants. The DOE recently ordered FERC to devise new market rules favoring coal and nukes on the premise they contribute to “grid resiliency.” The IPPs writing the letter in opposition represent at least 26 shale gas-fired electric plant projects across the three states, which will contribute $21 billion to those state economies and generate 20,000+ jobs. Below we have the letter sent to FERC by the IPPs. That letter prompted our friends at Energy in Depth to produce a list of the projects the IPPs are building (or have built) in the tri-state area. It is an impressive list. We liked it and grabbed it to share with the MDN audience…
In just about every state in the country, before you start digging a hole in the ground for some reason (water well, septic system, laying an underground electric line, etc.)–the first thing you do is call 811 or some similar phone number. The “one call” or “first call” reaches a state-authorized (not necessarily state-run) office where they have, on file, maps detailing any kind of underground cables, pipelines and other infrastructure. If such underground structures exist, a representative of the owner for the underground line will, if necessary, stop by and mark the areas so when you do begin digging, you don’t hit it. Makes sense. A bill introduced last year in the Pennsylvania legislature would “enhance” the existing 811 law in PA. One of the “enhancements” is that it removes an exclusion for low-pressure natural gas gathering pipelines from being required to be part of the 811 system, mainly lines run to low-producing conventional gas wells. The bill was opposed by the Pennsylvania Independent Oil & Gas Association (see 
The Pennsylvania State budget is a complicated pile of…bills. At it’s core are three basic budget-related bills that implement the $31.9 billion state budget (unwisely) passed in June. It was unwisely passed because Republican lawmakers voted for a plan to spend money without having a way to pay for it. Stupid. PA Gov. Tom Wolf (liberal Democrat) demanded part of the new revenue required to pay for all that wild spending is to tax the Marcellus industry with a severance tax–on top of the existing impact tax (already the equivalent of a severance tax in other states). One of the three main bills to pay for the budget is the Fiscal Code bill–House Bill 674. HB 674 was adopted by the PA Senate on Monday (vote of 41-9). In the Senate version, which now goes to the House for final adoption, there are a number of “environmental riders”–or bits of legislation that have nothing to do with the budget or spending, but tacked on as a way of getting them passed without the mess of voting on them individually. Swamp politics. One of those provisions is “SECTION 1610-E” which gives drillers the right to reactivate old, non-producing wells after they have not been producing (and the lease considered terminated) under certain conditions…
As MDN has explained in a companion story appearing today (see PA Republican Senate Changes Lease Terms for Landowners), the PA legislature has slipped a number of “environmental riders” into one of the final budget bills. The riders are bits of legislation that have nothing to do with the budget or spending, but tacked on as a way of getting them passed without the mess of voting on them individually. One of those riders affects the potential to drill for oil and gas in southeast PA. Back in 2012, an eleventh hour deal was snuck into the Pennsylvania budget signed into law by then-Gov. Tom Corbett (see 
EQT’s Equitrans (pipeline) Expansion Project is on track to begin construction by the end of this year–likely sometime in November. We first covered this project in 2015 (see 
The Pennsylvania Supreme Court said last week it will accept a case about strippers–stripper wells, that is. In brief, in 2012 Pennsylvania passed the Act 13 drilling law that includes a fee on wells targeting shale layers, including the Marcellus. Snyder Brothers, headquartered in Kittanning, PA, drills mostly conventional (vertical only) wells in southwestern PA. In 2011-2012 they drilled 45 vertical-only wells, but targeting the Marcellus, all of the wells fracked. Initially those wells produced more than 90 Mcf/day, but by December of the year they were drilled, they produced less than 90 Mcf/day. The way the 2012 Act 13 law is written, if a well produces less than 90 Mcf/day during “any” month it is considered a stripper well and exempt from paying the impact fee. The state’s Public Utility Commission (PUC) assessed the fee anyway because for 11 months the wells produced more than 90 Mcf/day. Snyder Bros. sued and after an appeal of the case, Snyder Bros. won their case in March, exempting those wells from paying impact fees (see 
As predicted earlier this week, yesterday the Pennsylvania House Finance Committee voted to approve a 3.2% severance tax on top of the existing 5%+ impact tax (see 