PA Budget: Where Will Republicans “Find” $400M for Big Education?
We are holding our collective breath. Yesterday there seemed to be movement toward finalizing a deal for the Pennsylvania State budget. The floundering Tom Wolf administration made a promise to Big Education they can’t keep–raping, er, a, raiding the Marcellus Shale industry and giving the proceeds to teachers’ unions as political payoff for helping to elect him. Republicans, which control both the PA Senate and House, have held firm: You don’t tax a single industry to transfer its wealth to another group that didn’t earn it, no matter how “worthy” and “noble” the cause. It’s called theft. Yesterday word leaked that Republicans and Wolf met and the Republicans offered Wolf $400 million for education. We’re assuming that’s $400 million on top of the increase they already offered (an increase that doesn’t get reported by mainstream media). Wolf fancifully thought by raping, er, a, raiding the Marcellus industry he’d get $1 billion. So there’s a $600 million delta there. But word is that Wolf is seriously considering the offer. What we don’t know is: Where will Republicans get the $400 million? The state is flat busted as it is, thanks to pensions that are bankrupting the state. Our question/warning is this: We sure hope Republicans aren’t getting ready to cave on a Marcellus Shale severance tax. It doesn’t matter if the tax is little or big. Little taxes today get converted into bigger taxes next year with the stroke of a legislative pen…
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You know what happens when you elect Big Government liberals to important positions, like governor? You get high taxes and onerous regulations across all industries–but particularly on the drilling industry. Welcome to Pennsylvania and the floundering administration of Gov. Tom Wolf and his PennFuture sidekicks who pretty much run the whole show for Wolf–including the PennFuture Sec. of the Dept. of Environmental Protection, John Quigley. PennFuture is an anti-drilling environmental group that Quigley used to work for prior to being appointed by Wolf to run the DEP, the agency in charge of drilling (how’s that for ironic?). On a conference call yesterday Quigley said, of the current round of new drilling rules and regulations, you ain’t seen nothin’ yet. He plans to attack the Marcellus industry with even more onerous rules and regulations in the coming months and years of a (hopefully) one-term Wolf administration. Quigley is making his onerous list and checking it twice; gonna find out who’s naughty and naughtier (there is no nice in fossil fuels, ya know)…
Where does the Pennsylvania budget negotiation/standoff stand? Depends on who you ask. There have been some intense negotiations over the past few days (a room with a bunch of men hollering at each other). When he emerges from the meetings, PA Gov. Tom Wolf, the most liberal governor in the United States, paints a smile on his face and mouths unspecific platitudes about making progress. When Wolf’s top surrogate emerges, State Sen. Vincent Hughes (Democrat from Philadelphia), Hughes says they aren’t any closer to getting Republicans to cave on a Marcellus Shale-killing severance tax. And that irks him. And Hughes blusters that there will be NO budget without a severance tax as part of it. Good luck with that Sen. Hughes. We applaud Republicans for preserving the Marcellus industry–what’s left of it in this low price environment. Let’s hope Republicans don’t cave to the bluster and deceit being pedaled by the Democrats in Harrisburg. We certainly understand the Dems are in a real bind. They PROMISED the teachers unions big money in return for their support. This is a payoff–shaking down the Marcellus industry to give the money to overpaid teachers and union bosses. And if Wolf doesn’t pull it off–he can kiss a second term good-bye as far as the unions are concerned. They play for keeps and Wolf knows it. Here’s the latest in the ongoing budget battle…
Major changes are on the way for Pennsylvania’s conventional (vertical) and unconventional (shale/horizontal) drillers. In 2011 PA began a process that’s gone on way too long, to update certain regulations that apply to oil and gas drillers known as Chapter 78 of the 1984 Oil and Gas Act. Along the way the PA legislature decided there should be separate rules governing conventional and unconventional drilling–so Chapter 78 has become Chapter 78 (conventional) and 78a (unconventional). PA was close to adopting the new rules at the end of the Tom Corbett administration but then he lost his bid for re-election, throwing the process into turmoil once again with newly elected Tom Wolf and his PennFuture buddies wanting to put their own stamp on drilling regulations in the Keystone State (see 
On Friday Baker Hughes, which is being forced into a merger with Halliburton by the end of this year/early next year, issued a summary of rig counts last Friday. At first blush it appears to be good news, but when you dig under the surface, it’s not–at least for the Marcellus/Utica. The international rig count was 1,118, down 28 from the 1,146 counted in June 2015. However, the average U.S. rig count for July 2015 was 866, up 5 from the 861 counted in June 2015. It appears we’ve turned the corner on how low rig counts will go–we’ve bottomed and are either holding steady (in the U.S.), or perhaps every so slightly gaining ground again. But then we ran the numbers for the Marcellus/Utica and found rig counts continue to decline month over month…