Home / Energy / Shale executives raise pressure against severance tax in Pa.

Shale executives raise pressure against severance tax in Pa.

Seventeen top executives from some of the largest companies working in the Marcellus shale signed a letter asking legislative leaders in Harrisburg to block Gov. Tom Wolf’s proposal to raise taxes on the natural gas industry.

“It defies good economic policy to single out a key industry and economic engine by instituting an onerous energy tax that would generate limited additional revenue,” read the letter delivered Thursday to the General Assembly’s six top leaders and Wolf.

The signers include Consol Energy CEO Nick DeIuliis, Chevron Appalachia President Nigel Hearne, driller Huntley & Huntley’s CEO, Keith Mangini, and senior leaders of midstream companies MarkWest Energy Partners, Williams Cos. and Columbia Pipeline Group.

A spokesman for Wolf dismissed the letter as “the same tired argument.”

“The governor is trying to work with both houses in the Legislature on a common-sense tax,” spokesman Jeff Sheridan said, repeating a point Wolf has made since his election last year that Pennsylvania is the only major gas-producing state without a severance tax based on production. The state collects about $225 million annually from a per-well impact fee.

In related news, Ohio tax panel: Go slow with oil and gas industry.

Wolf, a Democrat, has pushed for the tax to help fund public schools and other priorities. The industry and its advocates have argued in public relations campaigns and previous letters that a drop in gas prices and a resulting drilling slowdown that prompted company cutbacks and layoffs make this the wrong time to increase taxes.

Republicans, who control the House and Senate, have rejected the tax and other Wolf proposals, leading to a budget impasse since July.

“Onerous taxation is such old-school, misguided thinking,” said Jay Ostrich, a spokesman for House Speaker Mike Turzai, R-Marshall. “We owe it to hardworking Pennsylvania families to develop and execute a 21st century energy policy that turns our state into a global jobs-growth leader through energy independence, not a leader in taxation and dependence on government.”

Wolf recently pared his tax proposal, removing a minimum price floor and dropping the percentage of the levy to 3.5 percent per thousand cubic feet of gas, from 5 percent.

Concern over a potential compromise in Harrisburg might have spurred the company leaders to act now, said Joseph DiSarro, chair of the political science department at Washington & Jefferson College.

“This letter is totally different than the messages on TV or on billboards. This is direct action and the message is strong,” he said. “This is an attempt by the executives to inform the legislators that this is a serious issue.”

David Conti is a staff writer for Trib Total Media. He can be reached at 412-388-5802 or dconti@tribweb.com.

This article was written by DAVID CONTI from The Pittsburgh Tribune-Review and was legally licensed through the NewsCred publisher network.