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Severance tax will hurt shale production

 

July 9, 2020 Letters to the Editor

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We must not take our eye off the value of shale development in Southwest PA. Energy is and will be the economic boon for our area. Some say a severance tax is “common sense.” In fact, it betrays common sense! The current impact fee system works, with a portion of industry revenue reinvested directly into counties and municipalities impacted by shale development.

In 2018 alone, the fee generated $209.6 milliondistributed across the state. Since 2011, impact fees generated more than $40 millionfor Butler County, directly improving local roads, bridges, parks, and first-responder services.

Through the county’s Impact fee-funded Infrastructure Bank Program, municipalities leveraged an additional $20 million in the last two years for road projects, while Southwest PA receives a disproportionately low share of transportation discretionary funding from Harrisburg.

Sixty-four percent of funds go to Eastern and Central PA, while only 11 percent comes to Southwest PA. The same will likely occur with a severance tax.

During a recent visit to Deep Well Services’ safety training facility in Zelienople, we met some amazing young people, from Slippery Rock University graduates to those who came straight out of high school, promoting quickly, making from $50K to $200K per year with no debt.

Deep Well Services spends $5 million to $7 million annually on local hotels, food, and fuel. Why risk losing jobs and this investment in our region?

Natural-gas producers are among the most highly taxed in the nation. A duplicative tax will make Pennsylvania less competitive in an industry needed now more than ever. Fortunately, no such policy was included in the five-month spending plan passed by the Legislature. Let’s keep it that way when we revisit the budget this fall.

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