In Opposition of Natural Gas Severance Tax
Dear Editor:
I have watched the natural gas industry grow in Clinton County and Northern Pennsylvania over the last few years. This industry was unknown and employed virtually no persons before the development of horizontal drilling and fracking. It has grown substantially in the recent years. Due to overproduction, the price of natural gas has fallen to a point that the industry is now severely depressed. I understand the extreme importance of funding our public schools. However, it is disturbing to me that whenever a new industry or a new source of income for the State arrives on the scene, the government immediately wants to tax it into submission. I have never understood why we have to suddenly tax or over tax new industries to subsidize the State’s overspending of its income. Ultimately, every tax raises prices and is passed on to the consumer.
I am against the new proposed severance tax being pushed by Governor Tom Wolf. The natural gas industry pays an “impact tax” that has raised more than $850 million dollars in the four years that it has been providing money to every County. The natural gas industry has provided billions of dollars of development and employment in the State of Pennsylvania which would not have otherwise occurred. I find it repulsive to see that the State is attempting to assess a five (5%) percent severance tax on natural gas when this industry is already providing millions of dollars in royalties to the land owners and good paying jobs that did not exist until recent times. This is especially true in view of the collapse of the natural gas prices in recent times, due to overproduction and the lack of pipelines to transport the product to other markets. There have been thousands of layoffs in this industry and Pennsylvania’s rig count of about 55 rigs is approximately one half of the rigs that were in use in 2012. If the number of wells drilled in 2015 keeps the same pace as current levels, we will see the total number of wells drilled in Pennsylvania drop by about 45% of the average number of wells drilled between 2011 to 2014. Thus, I believe that the severance tax is a bad idea and is kicking an industry that is already in recession.
Lee H. Roberts
Lock Haven, PA
