Inquirer Editorial: Gas impact fee would be better than nothing

Posted: September 20, 2011

In a perfect world, Gov. Corbett would not be unalterably opposed to a severance tax on natural gas extracted by the booming Marcellus Shale industry. Pennsylvania would be able to join every other major gas-producing state and collect a modest charge on the value of gas produced. The extra money would help offset the stern budget cuts that he and the Republican-led legislature inflicted on public schools, higher education, and the safety net for the needy.

But Corbett is adamantly opposed to a severance tax on shale gas. He has not been persuaded by polls showing strong majorities of Pennsylvanians support it - 69 percent in a June survey by Quinnipiac University. Nor has he been persuaded by his political mentor, former Gov. Tom Ridge, now a gas-industry adviser, who suggested that most major drillers in the state can live with a reasonable severance tax.

So, as state legislators return to Harrisburg, they are left to consider what Corbett says he is willing to accept - an "impact fee." Even an industry booster like Corbett is finally admitting that, while the drilling boom has produced much-appreciated jobs in rural counties and supplies the nation with relatively cheap and clean-burning energy, it also takes a significant toll on local communities and the state's environment.

With Corbett widening the door for an impact fee, state Rep. Marguerite Quinn (R., Bucks) has offered a sound proposal. The annual charge for shale gas wells would start at $50,000, when the well comes on line and the gas is flowing fast and furious. But the fee would drop over time, since well production typically declines steadily, and the fee would disappear when a well is barely producing. It's not a tax, because it's not based on the value of gas production, and none of the money would cover general state expenses.

Quinn would steer half the impact-fee money to local governments, with 30 percent going to various state environmental programs and the final 20 percent paying for work on roads and bridges in the commonwealth.

The state Senate is working on a similar proposal under the leadership of President Pro-tem Joe Scarnati (R., Jefferson), but some details are different.

Quinn, who was one of a dozen Republican House members to support a severance tax last session, hopes both houses will agree on a significant gas impact fee this year. "There's an understanding something has to be done," she told the Inquirer Editorial Board last week. She admitted her proposal "isn't perfect," but stressed that "the goal is to get something that will pass."

A tax that funds more of Pennsylvania's needs would be better. But given the choke hold Corbett has on the effort, Quinn and her like-minded colleagues offer a viable alternative to ensure the state's booming gas industry pays its way.

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