"The study's main finding -- that a severance tax will drive up the cost of the gas, causing Pennsylvania drillers to lose customers to cheaper gas providers -- has one very basic flaw," said Jan Jarrett, president and CEO of PennFuture. "There is no cheaper gas anywhere, with or without a severance tax. Pennsylvania's natural gas deposits have a huge competitive advantage, with higher Btu ratings than supplies elsewhere, and reduced delivery costs, since the gas is close to lucrative northeast markets. And I don't care how much they dress it up with a study, this fact cannot be denied.

"And there is no case to be made that the severance tax will harm the growth of this industry," continued Jarrett. "If this tax is onerous, we would expect that Pennsylvania would be the drilling capital of the nation. But it isn't. Pennsylvania is 15th out of 32 gas-producing states, nearly all of whom have a severance tax. The gas is here, and the industry will drill where the gas is.

"No one doubts that drilling in the Marcellus Shale formation presents a tremendous opportunity for growing Pennsylvania's economy," said Jarrett. "But without a severance tax, Pennsylvania taxpayers will get very little benefit, while they risk being stuck with the bill to fix the environmental damage the drilling causes. Instead, the only folks who stand to make really big money out of Pennsylvania's natural gas assets will be the multinational corporations who are blocking the tax.

"And make no mistake about it," said Jarrett, "the big boys are making really big bucks, even though their legislative and business supporters are silent in that regard. Mega drillers like Texas-based Range Resources and New York-based Atlas America are in no shape to be demanding a bailout. In 2008, Range Resources' CEO, John H. Pinkerton, took home over $5 million; Richard Weber made nearly $2.5 million for running Atlas' Pennsylvania subsidiary.

"Chesapeake Energy's CEO Aubrey K. McClendon checks in with the nation's largest CEO package of the year, a tidy $112.5 million, according to the Associated Press," continued Jarrett. "And as Representative Bud George pointed out, ˜[This] one employee from one gas company could pay the entire estimated annual tax for all gas producers in Pennsylvania from his compensation”and still have a decent chunk of change left over.'

"Pennsylvania taxpayers are in dire straits, with a budget that must be balanced," said Jarrett. "At a time when each and every one of us must do our fair share, it's time for the natural gas drilling industry and the legislature to step up to the plate. It's time to pass a severance tax on this enormously profitable industry."

PennFuture is a statewide public interest membership organization, founded in 1998. PennFuture's activities include litigating cases before regulatory bodies and in local, state and federal courts, advocating and advancing legislative action on a state and federal level, public education and assisting citizens in public advocacy.

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