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Friday, November 20, 2009

Slap tolls on natural-gas drillers, not drivers: candidate

US Rep. Joe Sestak, D-Pa., who's running against incumbent Sen. Arlen Specter, D-Pa., in next year's Senate primary, has come up with a novel way to solve Pennsylvania's controversial road-and-bridge finance and highway-tolling controversies: Instead of slapping drivers with highway fees, why not fund roadwork with fees on natural-gas drillers who want to dig deep rock-fracture ("fracking") wells along the Marcellus Shale formation, along I-80?

Gov. Rendell and the General Assembly considered a gas "severance" tax this year, then decided not to after a flurry of lobbying by out-of-state drillers, as the Inquirer's Mario Cattabiani and Amy Worden have reported.

The Susquehanna River Basin Commission, as Sestak notes, wants to tax Marcellus and use the money to monitor air and water as the gas companies chew up the mountains. Sestak says it "would be more beneficial to help alleviate the burden of infrastructure costs for Interstate 80, rather than tolling, which would disproportionately impact the pocketbooks of a certain segment of the state's population and may not receive necessary approval from federal authorities anyway." 

The Bush administration refused Pennsylvania Turnpike Commission attempts to grab I-80 and other highways and stick tollbooths on them, but Obama's Federal Highway Administration might be more willing. Meanwhile, PA DEP is reviewing permits for water-treatment plants in the gas zone.

"The proposal during the state budget process to place a severance tax on natural gas drilled in Pennsylvania should be revisited," said Sestak. According to Rendell's own projections, Sestak says Marcellus fees "would exceed the amount tolling I-80 would generate within five years".

In a statement, Sestak adds, "The severance tax proposed last spring that is used for these projections would be five percent on the value of the gas extracted plus 4.7 cents per 1,000 cubic feet of natural gas severed. This tax is similar to measures imposed by almost all other states with significant natural gas reserves. During the budget negotiations, the Governor withdrew his proposal and the final budget did not include the tax resulting in deep job cuts, including 138 layoffs at the Pennsylvania Department of Environmental Protection."

Is there really enough potential Marcellus tax money to fund both needed roadwork and environmental protection? Sestak's hopeful. -- "Sestak has co-sponsored and supports passage of H.R. 2766, the Fracturing Responsibility and Awareness of Chemicals (FRAC) Act, and H.R. 1835, the New Alternative Transportation to Give Americans Solutions (NAT GAS) Act." 2766 would force gas drillers to pay for water contamination clean-up; 1835 would promote gas use at the expense of "foreign oil."

 
Posted by Joseph N. DiStefano @ 11:48 AM  Permalink | 8 comments
Comments   
  • Comment removed.
  • 0 like this / 0 don't   •   Posted 12:27 PM, 11/21/2009
    meanwhile, Sestak is mum on Penn's long term below average job and income growth as well as nation's highest corp income tax rate.
    — dreinterests
  • Comment removed.
  • 0 like this / 0 don't   •   Posted 11:29 AM, 11/22/2009
    Pennsylvania is being raped by out-of-state oil and gas companies who couldn't care less about the ecosystems they are destroying. Why shouldn't they be taxed??? They have some into our state, are taking natural resources that the citizens own, raping our land and leaving behind an ecological disaster. Not to mention we DON'T need more natural gas. If you haven't noticed, there's a huge supply already.
    — MainLineExRepublican
  • 0 like this / 0 don't   •   Posted 2:06 PM, 11/22/2009
    To MainLineEx - It's attitudes like yours that cause Ex mainline adopted Texans to repeat phrases coined during the first energy crisis. Yankee go freeze in the dark !!
    — oldcheme
  • 0 like this / 0 don't   •   Posted 4:01 PM, 11/22/2009
    Tax the gas companies, not citizens.
    — Donnadpg
  • 0 like this / 0 don't   •   Posted 4:36 PM, 11/22/2009
    Natural gas companies have nothing to do with road use. Tax the drivers who are the users (if you must).
    — JW
  • 0 like this / 0 don't   •   Posted 8:03 AM, 11/23/2009
    Let's get rid of the state police. Local police take populated areas anyway and the boondocks are loaded with armed 12 year old bear hunters, why don't need the police to portect them. That should be the first budget cut. NO POLICE, its welfare for paramilitary costume fetishists.
    — Fernando08


8 comments
About Joseph N. DiStefano
Joseph N. DiStefano writes this blog to feed his PhillyDeals column in the Philadelphia Inquirer. Joe has been a member of Bloomberg LP’s New York Finance Team, wrote the book “Comcasted,” taught writing at St. Joseph’s University, and studied economics and history at Penn. Reach Joe at 215-854-5194 and JoeD@phillynews.com
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