Liz Navratil | Thursday, January 31, 2019, Pittsburgh Post-Gazette
HARRISBURG — Gov. Tom Wolf on Thursday announced plans to once again seek a severance tax on Marcellus Shale natural gas drilling, promising to use the money for disaster recovery, infrastructure and the expansion of broadband internet, among other projects.
The Democratic governor plans to approach state lawmakers with a proposal to borrow $4.5 billion over four years by selling bonds. The money would be paid back over 20 years using revenue from a severance tax, which would vary depending on the price of gas and the amount of it extracted.
Wes Venteicher | Thursday, April 5, 2018, Pittsburgh Tribune Review
Pennsylvania Superior Court has ruled against a legal principle that lets energy companies drill across property lines to extract oil and gas from beneath neighbors’ land without compensation.
The ruling was related to a lawsuit filed by the owners of an 11-acre property in Susquehanna County who accused Southwestern Energy Production Co. of extracting natural gas from a Marcellus shale formation beneath their property without compensating them, the Scranton Times-Tribune reported . The company has wells on a neighbor’s land.
Wednesday, December 13, 2017, The Associated Press
HARRISBURG — The Pennsylvania Legislature finished for the year on Wednesday after passing veto-bound abortion restrictions, while anti-union legislation sought by top Republicans failed and legislation to tax Marcellus shale natural gas production remained in limbo.
The GOP-controlled House and Senate each adjourned until January after a flurry of votes and a relatively spectacular showdown on the House floor between 25 rank-and-file Republicans and House GOP leaders over a Marcellus shale bill that has been effectively filibustered for weeks by opponents.
Stephen Huba | Monday, December 4, 2017, The Tribune Review
The shale gas boom in Pennsylvania and other Appalachian states has been the chief driver of growth in U.S. natural gas production since 2012, the U.S. Energy Information Administration said Monday.
According to the EIA’s Drilling Productivity Report, natural gas production in the Appalachia region — namely the Marcellus and Utica Shale plays — has increased by more than 14 billion cubic feet per day (Bcf/d) since 2012.
Laura McCrystal | Wednesday, August 9, 2017, Philadelphia Inquirer
If you have electricity in your house or a phone, Pennsylvania lawmakers want you to help plug the budget’s $2 billion gap.
Along with the controversial, highly publicized tax on natural-gas bills, in a vote last month the Senate also approved levies on telephone and electric utilities, which typically pass such costs onto customers.
Brian Bowling | Monday, July 31, 2017, Pittsburgh Tribune Review
Development of the Marcellus shale has turned Pennsylvania from a net importer to a net exporter of natural gas and has made the state one of the top five energy exporters in the country, the Energy Information Administration said Monday.
Pennsylvania’s natural gas production went from 573 billion cubic feet in 2010 to 5,264 billion cubic feet in 2016. The boom has led to pipelines being reconfigured to send gas out of the state instead of bringing it in.
Michael Rubinkam | Thursday, July 27, 2017, Associated Press
HARRISBURG — The Pennsylvania Senate on Thursday approved a plan to eliminate a $2.2 billion budget deficit that includes heavy borrowing and hundreds of millions of dollars in tax increases, including on Marcellus Shale gas drilling, consumers’ utility bills and online purchases.
Floor votes came barely 14 hours after Republicans who control the chamber first unveiled their plan to balance the $32 billion state budget late Wednesday. It includes a proposal to borrow $1.3 billion against Pennsylvania’s annual share of the 1998 multistate settlement with tobacco companies, an approach rejected by their GOP counterparts in the House just last week. States typically borrow to prop up current spending only as a last resort.
The Set Up: Pennsylvania is a deregulated energy market that operates within the PJM. One of the drawbacks of a deregulated market is that generators cannot recover the cost for plant upgrades directly from the ratepayer. Utilities have to spend capital cost then compete on the open market against every other energy sources. This has made it difficult for older coal and nuclear plants to make improvements, either necessary or driven by regulation, because the market price for energy is suppressed. This is largely due to low natural gas prices and energy demand. Plus you have energy sources- like solar and wind- that are subsided which allows those sources to enter the PJM and accept a low rate per Kw/H.
Faced with this reality, a group of PA Legislators have formed the Nuclear Caucus. At this time, it’s not clear what focus the group will take; however, they formed to find a solution to save Nuclear Power Plants. If you recall, the nuclear industry, equipped with jobs and economic numbers, have won recent victories in Illinois and New York. The policies passed require the rate payer to subside the nuclear plants through what is called Zero Emission Credits. It unclear if these laws are going to withstand the court appeal process. Nonetheless, the nuclear industry is pursuing similar laws and Pennsylvania is next on the list.
What to look for: The nuclear industry is staffing up in Harrisburg. They are currently hiring many lobbyists and former regulators to help carry the message. The opposition however is not a sleep at the switch in Pennsylvania. They are organizing early and forming powerful opposition to any subsidy.
The battle between to the side will be simple; jobs, low carbon energy, and grid reliably versus rate payers, more government subsides (tax payer money), and a less diverse energy mix.
The side hustle: With a major Natural Gas development in Pennsylvania – Marcellus Shale – they have the most to lose at this point. If the state props up nuclear it will only prolong natural gas rising as the dominate energy source. It will be interesting to see how much time and resources the gas industry uses to defeat any nuclear subsidy.
The Public Forum is a monthly KQV Radio Talk Show where hosts from our Cohen & Grigsby Public Affairs Team and various guests discuss current topics impacting Harrisburg and D.C. and the business community.
Our Hosts for tonight’s show are Rob Vescio and Kim Hileman with guest, David Spigelmyer, President of the Marcellus Shale Coalition.
We hope you will listen tonight at 7:00 PM at 1410 AM, KQV.
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If you have questions please contact Michelle Vezzani at MVezzani@cohenlaw.com or the public affairs professional with whom you work.
On July 10, 2014, Governor Corbett approved the budget for Pennsylvania’s 2014-2015 fiscal year after announcing that he had decided to line item veto certain funding for the state legislature. The budget provides for $29.1 billion in state spending for this new fiscal year. Budget highlights include:
No increases in broad-based state taxes (e.g., Personal Income Tax, Sales and Use Tax).
No severance tax on the extraction and production of natural gas in the Marcellus Shale.
The continuation of economic development tax credits, including the Film Production Tax Credit.
The continued phase out of the Capital Stock and Franchise Tax.
$10.5 billion for K-12 education.
A $20 million increase in special education.
A $10 million increase for PlanCon, a process whereby a school district seeks reimbursement from state government for a major construction project undertaken by the school district.
$327.69 million in funding for early childhood education, including a $10 million increase for Pre-K Counts.
A $3.5 million increase in funding for community colleges.
$5 million for the newly established Ready-to-Succeed Scholarship, which provides merit-based scholarships to students who demonstrate academic achievement and come from families with household income of less than $110,000.
$100 million for the newly created Ready-to-Learn Block Grants to support academic achievement with flexible uses that include the following: uses allowable under the Accountability Block Grant; establishing, expanding, and maintaining kindergarten and Pre-K programs; hybrid learning; and curriculum alignment.
Requirement that the Environmental Quality Board regulations differentiate between conventional oil and gas wells and unconventional gas wells.
Elimination of the state’s pension reimbursement payments to charter and cyber charter schools.
No public pension reform. However, pension reform may be taken up by the state legislature in the fall.