We doubt the shock that the Republican bill dealing with Marcellus Shale gas production sailing through committee in the Pennsylvania House, a bill which virtually mirrors that espoused by the Corbett administration, sent anyone to the hospital with chest pains.
The bill quickly introduced and raced through committee with very little debate would allow individual counties to enact an impact fee of up to $40,000 per well per year and then gradually diminish that amount to compensate for damage to roads and other infrastructure, thus keeping a campaign promise by Mr. Corbett to protect the industry from the tax man. It sweetens the deal for out-of-state drillers to bring their rigs and crews to the Keystone State for the initial poke and then nicely avoids the issue of severance of a state resource over the long term.
Pennsylvania, like many states, has reduced services, layed off teachers and slashed education budgets because revenue just isn't there to support them.
And yet, a few states don't have this problem; the whole state fiscal panic has sidestepped them.
Guess which ones.
Alaska, West Virginia, Wyoming and North Dakota, all four states which supplement their budgets with oil and gas revenue.
While the Pennsylvania General Assembly was collectively wringing its hands and delivering bad news to your children, the Alaska legislature was arguing over what to do with a surplus derived from its severance tax on oil and natural gas. Alaska took in nearly $1.9 billion more than expected last fiscal year thanks largely to high oil prices. It ended the fiscal year with a $260 million surplus.
And yet, we've not heard of a mass exodus of oil and gas producers from Alaska, something our governor repeats (and parroted by his legislative team) as a consequence of a severance tax in Pennsylvania.
So, in an effort to at least feign empathy with those who believe the Pennsylvania Gas Rush should benefit all Pennsylvanians, the legislature will likely pass a measure that does little more than say: You see, we did something.