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Friday, September 30, 2011

Rendell assails drillers over lack of taxation

Thursday, September 08, 2011
PHILADELPHIA -- Former Gov. Ed Rendell closed out the first day of the Marcellus Shale Coalition's inaugural conference on a fiery note, saying gas drillers have continued to "screw up" for too long and that they should be more loudly supporting a tax on their industry.
A sharp rebuke from the Democratic politician who oversaw the beginning of the commonwealth's Marcellus Shale exploration was an unexpected end to a day of industry-sponsored sessions touting the new jobs, technology and investments from natural gas drilling.
Mr. Rendell, who handed over the reins to Republican Gov. Tom Corbett in January, pointed to the protesters outside the convention center around midday Wednesday as an example of how the activists have grown into "a serious, long-term problem."
"[Drillers have] screwed up so bad that there are protesters everywhere anybody associated with this goes, and the protesters grow stronger and deeper in number," he said.

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Mr. Rendell urged drilling firms to publicly support a tax on natural gas extraction and to write to Mr. Corbett indicating their support. Mr. Corbett has signed a pledge not to raise taxes during his term, specifically opposing the severance tax that Mr. Rendell twice failed to enact.
However, some drillers, particularly the larger firms active in the commonwealth, have said they would support a tax or fee on their development, repeating that position to reporters during interviews Wednesday.
Range Resources CEO John Pinkerton said enacting a tax or fee could give the industry some certainty of its future costs, and noted that his company was the one to urge the Department of Environmental Protection to hike permit fees in order to hire more staffers.
Some level of assessment directed toward impacts would show drilling companies to be "good neighbors," as well as to help "calm the masses," said Consol Chairman and CEO J. Brett Harvey.
But Mr. Rendell, who backed away from his initial push for a tax in 2009 after saying the industry needed to grow, pointed to the current year's dramatic budget cuts as a reason for the increasing public pressure for a gas levy.
"They see $2 million sliced ... or $3.8 million or $400,000 and each one of [those programs] develops a rallying cry, and the rallying cry is, 'Why aren't we taxing those Marcellus Shale companies who are making 64 percent return on investment?' " Mr. Rendell told the crowd. "There seems to be no cogent answer to respond to them."
He also urged gas companies to make more significant investments in the state's environment, scolding the drillers for what he outlined as a poor record regarding accidents that could be prevented and an unnecessary number of water buffaloes -- large plastic tanks that offer a temporary source of water for showering and doing dishes -- appearing at homes in rural Pennsylvania after water became polluted.
"Pennsylvania natural gas development is dynamic, fast-moving and strictly regulated, and the former governor's attempts to rehash issues that have since been resolved is stale and outdated," replied coalition president Kathryn Klaber in a statement.
"As the former governor has noted, 'Pennsylvania has the strongest enforcement program of any state with gas drilling. Period.' We agree."
Company executives like Mr. Pinkerton said the gas industry should focus on boosting its efforts toward public outreach and education. He noted that some questions have subsided since the company took early steps to disclose its hydraulic fracturing chemicals on a well-by-well basis.
"We have and we will continue to sit down with [critics] and talk through their concerns," Mr. Pinkerton said. "We've got landowners that want their land drilled. They want to benefit from the assets they have in the ground, that their families have owned in some cases for hundreds of years. And they don't want to be told by somebody else that we ought to drill this well five years from now versus drilling it today."
Neither a tax nor more education is likely to quell the activists who gathered outside the convention, shouting "Shut it down!" when "Gasland" film producer Josh Fox talked about the Delaware River Basin Commission and its controversial pending drilling rules.
Many of those "fractivists," as dubbed by Chesapeake Energy CEO Aubrey McClendon, sported buttons or held signs calling for a moratorium on all drilling, saying they fear any activity could spoil the quality of their water and air.
Former Gov. Tom Ridge said that's an example of the "hysteria" and "misinformation" muddling the debate over gas drilling. He defended the industry, saying the Pennsylvania workers live in those communities and drink the water there, too.
"The people in this industry in Pennsylvania are as sensitive to the quality of the water that they consume and enjoy for recreation as any environmentalist located anywhere," Mr. Ridge said.
Instead of rejecting a domestic energy source, Mr. Ridge, who spent last year as an adviser to the trade group, urged that it become a key part of an energy policy that will help boost national security and independence from foreign oil.
The coalition's conference will wrap up this afternoon, after a day of panels featuring top state lawmakers and a luncheon address from Mr. Corbett.

Laura Olson: lolson@post-gazette.com or 717-787-4254.

First published on September 8, 2011 at 12:00 am

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