Posts Tagged → drilling
A Severance Tax, now?
Talk about an addiction to spending other people’s money.
Yesterday in southeast PA, far away from the communities where this issue is most important and the citizens might not be so welcoming, Governor Tom Wolf staked out his position on creating a new 5% “severance tax” on natural gas from the Marcellus shale feature.
Right now, natural gas is selling at historic low prices, especially here in Pennsylvania. The financial incentive to drill more or spend more money to get more gas is very low, and drill rigs have been disappearing from across the region for a year.
The Saudis began dumping oil months ago, in an effort to punish competing oil producers Iran and Russia, with the secondary effect of dropping gasoline prices so low that the natural gas industry got hit from that side, too.
So now is not only a bad time for the gas industry, it is also a time of greatly diminished returns on investment and on royalties received. Scalping 5% off the top of that is punishing to everyone, including gas consumers, who will see their rates increase proportionally.
Here’s the biggest problem with a severance tax: Pennsylvania already has a 3% impact fee on Marcellus gas, and a Corporate Net Income Tax of 9.99% (let’s call it ten percent, OK?). Most of the other gas and oil producing states have no such additional taxes; their severance taxes are the one and only tax their oil and gas producers pay, not the multiple high taxes and fees drillers in PA pay.
Pennsylvania government is therefore already reaping much higher revenue from the gas industry than other gas producing states. That means that the companies doing business here are already burdened much more than elsewhere.
So adding a severance tax now, at this economically bad time, without commensurately lowering other taxes, or the existing Impact Fee, makes no sense. Unless the people promoting this have an infantile view of how America and business work.
And that right there is the problem. Way too many advocates for tax-and-spend policies like an additional severance tax have a Marxist view of business; essentially, to them, business exists to pour money into liberal schemes.
And speaking of spending, who believes that spending more and more and more taxpayer dollars on public schools, public teachers unions, and public teachers’ pensions, actually equates with better education?
So many studies disprove that (see the Mercatus Center), but it is a liberal mantra that taxpayers must spend ever more of their money to support public unions that support political liberals. And both parents of students and taxpayers alike now correctly see that system for what it is – simple, legalized political graft to fund one political party.
Public schools are mostly a disaster, yet teacher’s unions and their political buddies continue to pound on the table for more and more money. Homeowners are essentially now renting their houses from the teacher’s unions, and proposed laws like Act 76 seek to fix that unfair situation by removing the vampire fangs from homeowners and letting the larger society pay for its expenditure.
Going door-to-door for political races year after year, property tax has been the number one issue I have encountered among elderly homeowners. So many of them can no longer afford to pay the taxes on their houses, that they must sell them and move, despite a lifetime of investing in them. This is patently un-American and unfair.
So Tom Wolf is moving in exactly the opposite direction we need on this subject, and instead of trying to fix the tax situation, he seeks to make it worse. To be fair, Wolf campaigned on raising taxes. He just needs to remember that he did not get elected by voters who want higher taxes, they wanted to fire former governor Tom Corbett.
Disconnect between Democrat chiefs and braves on gas drilling
Interesting wrinkle hasn’t really bubbled up yet into the governor campaign. That is the odd policy adopted a month ago among state Democratic leaders to embrace a gas drilling moratorium.
While to my knowledge none of the Democratic candidates for governor have embraced this policy, only one that I know of has strongly repudiated it. That’s John Hanger.
Hanger recently wrote that “if you support environmental quality, you support gas drilling.”
While Hanger’s polling numbers are on the radar but low among a field of candidates so large that it looks like a Hubble photo of some huge constellation, his prospects are looking better and better. By hewing to a moderate, common sense set of policy positions, Hanger is increasing gathering followers. My understanding is that Hanger does not support more gun control, which is my litmus test for a serious candidate in either party.
Natural gas is about the only thing going on in Pennsylvania right now. And for the future, too. Prospective leaders like John Hanger get my respect for acknowledging that and not playing to fake fears.
Property rights, anyone? Republicans? Hello?
My fellow Republicans have just passed a two-sentence law that single-handedly strips away private property rights from private landowners in Pennsylvania, and Governor Tom Corbett is weighing whether or not to sign it.
To wit: If you signed an oil and gas lease that is still in force, and it is silent on being unitized with some other gas drilling unit miles away, why then, the gas company can put you in that unit, begin paying you some paltry sum, and your lease never ends. The gas company can come back for your gas decades later. You are completely stuck and do not have the opportunity to renegotiate better terms for a new lease.
Never mind that the same “Republicans” who propagated this anti-American Communist plot are also the same ones who were championing forced pooling, too.
Some of these jokers are in the administration, so more on them later, on an as-needed basis. Keep in mind that some of these guys, and one person comes to my mind immediately, have never made a dollar in the private sector. Rather, their entire Republican careers have been spent on the taxpayer dole, in some public role or another. And here they have the cajones to try to strip private landowners of their private property rights.
Many voters know me as an American political activist first, and a Republican last. This recent vote in both the PA House and PA Senate reconfirms for me that my beliefs best lie with the more independent-minded, and not with the partisans. It is a sad fact that Democrats are for forced pooling, too, and also believe that private property rights are best managed by government or its corporate buddies.
But that is not my fight. I am a conservative and a Republican, and by God, when I see something that stinks this bad, I am calling it what it is: Crap.
The Republican Party ought to be made of better people who know better. For shame.