Natural-gas industry trade group, Rendell trade shots

Gov. Rendell's office and the natural-gas industry traded shots yesterday about who is to blame for a canceled meeting to discuss a proposed tax on Marcellus Shale gas production.

The Marcellus Shale Coalition, an industry trade group, issued a statement to "clarify the record," saying it did not decline Rendell's request for a meeting in January, but wanted a broader range of officials to sit in than the four chief executives Rendell had invited.

As reported in yesterday's Inquirer, Rendell went public with the matter last week at an energy conference in Dallas, Texas, expressing disappointment that three of the four chief executives he invited to the governor's mansion had declined his offer.

"As governor, I've never had that experience before," he said.

Rendell's spokesman, Gary Tuma, said yesterday that the industry did not dispute the governor's assertion that the chief executives of three major operators in the Marcellus Shale - Range Resources Corp., Atlas Energy Inc., and Chesapeake Energy Corp. - had changed their minds about meeting privately with him. Only the chief executive of EQT Corp. of Pittsburgh agreed to come.

"The governor wanted to meet with the CEOs himself," said Tuma. "He thought it would be more fruitful. This is a normal thing he does all the time. He's still disappointed that they turned him down."

A subsequent meeting with corporate staff and representatives from the Marcellus Shale Coalition - not the company chiefs - was scheduled for Jan. 19, but Rendell canceled after he traveled to Haiti to collect orphans following the earthquake. The meeting was not rescheduled.

The he said-they said nature of the dispute aside, the public exchange of barbed comments indicates there is scant common ground between the governor and the industry about whether Pennsylvania should impose a levy on natural-gas production, called a severance tax.

The industry has resisted efforts to impose a severance tax, common in most other states with oil and gas production. Gas operators say that the industry is still in its infancy and many years away from recovering its investments, and that a tax would retard growth.

Rendell says that the industry appears to be robust, and that there is public support for the tax as a means to deliver some revenue from the gas bonanza back to governments in the areas where gas drilling is taking place, as well as sharing the benefits with all Pennsylvanians.

The governor, in his comments during the roundtable discussion last week in Dallas, said that public opinion was shifting against the industry, and that gas operators had an opportunity to improve their image as corporate citizens by embracing a modest tax.

In yesterday's statement, Marcellus Shale Coalition executive director Kathryn Klaber said public support for the industry continues to grow in the communities where it does business.

She also disputed the governor's characterization that the public supports a new tax on gas producers. She said a recent newspaper poll found that "most Pennsylvanians do not support the governor's proposed severance tax."

Some Senate Republicans sympathetic to the industry's position also took umbrage at Rendell's rebuke of the industry last week for giving a disproportionate amount of financial support to Republicans in this year's campaign to elect his successor.

Rendell is prevented from running again because of term limits.

"It is extremely troubling for the governor or anyone to suggest that any industry needs to increase its campaign contributions in order to get a fair hearing," said Patrick Henderson, spokesman for Sen. Mary Jo White (R., Venango), chair of the Senate Environmental Resources and Energy Committee. "That is the essence of pay-to-play politics, and it is wrong."