Pa. governor considers natural gas tax to pay for $3 billion COVID-19 recovery plan
Wednesday, February 24, 2021
Pennsylvania Gov. Tom Wolf unveiled a program dubbed Back to Work PA earlier this month in his budget proposal that would impose an extraction tax on natural gas in addition to the impact fee producers already pay to state and local governments, according to The Morning Call.
The proposed tax would produce an estimated $300 million a year, depending on the price of natural gas, to pay the principal and interest on a $3 billion bond issue over 20 years. Wolf also claims the tax would not fall entirely on in-state consumers as about 75% of the gas produced in Pennsylvania is exported.
The Marcellus Shale Coalition, an industry group for gas producers in Marcellus formation, said the impact fee has provided more than $2 billion for community and environmental programs across the state since 2012. It disputed Wolf’s statement that the tax would be 2.8%, putting the rate at more than 12%.
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.