Rendell now has hope for natural-gas tax deal

Posted: October 14, 2010

HARRISBURG - In an about-face from earlier in the week, Gov. Rendell proclaimed Wednesday that he was optimistic there was new progress in talks over taxing the extraction of natural gas from the Marcellus Shale.

At a news conference in the Capitol, he said there appeared to be agreement among top legislators from both parties to work to close a deal before the Nov. 2 election.

"All leaders evidenced a real sense of urgency to get this done if it could be done," said Rendell, who had just emerged from what he described as a productive meeting with legislative leaders.

But Drew Crompton, counsel to Senate President Joe Scarnati (R., Jefferson), said, "I'm neither optimistic nor pessimistic."

"What we tried to do was establish a pathway to get the bill done if certain conditions are met," Crompton said, but "none of the parameters that we think need to be met have really changed. It's hard to know if a resolution is possible."

Rendell's comments were a notable departure from his pessimism earlier in the week.

On Tuesday, he lamented that talks had broken down, and assailed Senate Republicans for what he perceived as an effort to kill the tax effort through delay tactics and inaction. At one point, he even likened Scarnati, a key player in the negotiations, to the lying Pinocchio.

Asked Wednesday what had changed, Rendell gave an answer that he said his son, Jesse, and his friends would when they were young: "Beats the heck out of me."

Only a small window of time is left in the two-year legislative session to enact a gas-extraction tax.

Still an issue for Senate Republicans, who control that chamber, is how much that tax would be and how it would be distributed among the state general fund, municipalities, and environmental causes.

Rendell this week offered a compromise that calls for taxing gas production at 3 percent the first year, 4 percent the second, and 5 percent after the third.

He said Wednesday that negotiators had also worked on exemptions for shallow gas wells, or those run by smaller companies.

Thursday is the last session day scheduled for the Senate, but leaders have said they are willing to add more days if an agreement is near. Leaders in the House, which has recessed for the Nov. 2 election, have said they would return to Harrisburg.

Some industry representatives said Wednesday that they believed a deal would be worked out.

"Underneath the surface, I think they are a lot closer to agreement than they care to admit," said Ray Walker, vice president of Range Resources and chairman of the Marcellus Shale Coalition, which represents gas companies.

Walker said his company wanted the tax resolved so the industry could remove the uncertainty in the state's investment climate.

The industry, he said, also wants to protect itself against a potentially far worse outcome a year from now when Pennsylvania is expected to face a multibillion-dollar deficit - and when lawmakers might be less generous.


Contact staff writer Amy Worden at 717-783-2584 or aworden@phillynews.com.

Inquirer staff writers Andrew Maykuth and Angela Couloumbis contributed to this article.

comments powered by Disqus
|
|
|
|
|