Statewide PA

A quick update on the new, higher severance tax being proposed by Pennsylvania Gov. Tom Wolf in his second budget (the first budget never passed and the state has survived on continuing budget resolutions). We reported yesterday that the new 6.5% severance tax would be “on top of” the existing impact fee. That may have left a wrong impression. Yes, the impact fee, which is already high, would remain. But drillers would be able to deduct the impact fee from the 6.5% severance tax, lowering the severance tax for them. It still works out to a 6.5% rate–ON TOP OF corporate income taxes these companies pay. Meaning Wolf’s new severance tax would be one of the highest in the country, if you include corporate income taxes paid by drillers (income taxes that don’t exist in other oil & gas states). In addition to more comment on Wolf’s proposed severance tax, we also have some inside scuttlebutt about the severance tax and what could have been had Wolf not blown it last year…
Read More “More on Wolf’s New 6.5% Severance Tax – What Could of Been”

Someone needs to bring out a straight jacket for PA Gov. Tom Wolf. He’s gone stark…raving…mad. He’s not only a danger to himself, he’s a danger to all of Pennsylvania. The only thing missing from yesterday’s budget address in Harrisburg was frothing at the mouth. In his mean-spirited budget address, Wolf insulted nearly everyone present–blaming everyone but himself for the budget disaster of last year. Wolf is either bipolar (off his meds) or just plain nuts. How else can you explain that after not passing his first budget because he demanded a 5% severance tax on drilling (which was really closer to 15%, see Pittsburgh Economic Leader Says Wolf Severance Tax Really 15% Rate), in the worst oil and gas downturn in 30 years, he’s just proposed a second budget with a 6.5% severance tax? It’s sheer madness…
Read More “Wolf’s Demented 2nd Budget: Tax PA Marcellus 6.5% Instead of 5%”

What is it with Republicans in Pennsylvania? They’ve just won a major victory by not putting a bullet in the head of the Marcellus Shale industry, i.e. by not implementing Gov. Tom Wolf’s horrible idea of a severance tax. Major victory. But then they return to a severance tax like a cheating spouse who is serially unfaithful. Some Pennsylvania “Republicans” in the state legislature are once again committing adultery with a Marcellus-killing severance tax plan–the day before Wolf re-introduces such a losing plan for a second year in a row. The PA House Environmental Resources and Energy Committee held an informational meeting yesterday to consider two Republican-backed severance tax bills. One bill is being floated by Rep. Kate Harper, RINO-Montgomery County, the other by Rep. Scott Petri, RINO-Bucks County. Notice both RINOs are from the Philly vicinity, which is where most of the nonsense typically comes from. Even House Majority Leader David Reed, R-Indiana County, seems to be going squishy. His mouthpiece said, “It’s just prudent to kind of go through these bills and see what they do.” We disagree. The chairman of the House Environmental Resources and Energy Committee, Rep. John Maher, RINO-Allegheny County, is a sellout too, saying: “I think that there are many people who are open to the idea of a properly crafted severance tax.” With “Republicans” like these, who needs Democrats?…
Read More “PA Republicans Commit Adultery with Severance Tax – Again”

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”