Marcellus Shale Coalition says gas severance tax must not discourage gas drilling

BY JAMES LOEWENSTEIN (STAFF WRITER)
Published: July 7, 2010

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A planned severance tax on gas extracted from the Marcellus Shale in Pennsylvania needs to be "fair," so that it doesn't discourage gas drilling, according to the director of the Marcellus Shale Coalition.

"The Marcellus Shale is not the only shale play that is under development" in the United States, said Kathryn Klaber, president and executive director the Marcellus Shale Coalition. "There is a lot of competition for dollars" to develop gas wells, she said.

Pennsylvania needs to stay "ahead of the curve in terms of investment" in gas drilling, Klaber said in a conference call with reporters on Tuesday.

The state budget bill that Gov. Ed Rendell signed on Tuesday sets up action this fall on a natural gas severance tax.

The intent of the leadership of the Pennsylvania House and Senate is to pass legislation by Oct. 1 that includes a severance tax, Klaber said.

In Pennsylvania, the gas drilling industry and the increased economic activity that has resulted from gas drilling has produced more than $1 billion in revenue for the state and local governments this year, including revenue from gas leases on state land and sales, personal and corporate income tax revenue, she said.

"I reject the notion that this industry is not paying taxes," she said.

In the conference call, she declined to specify the tax rate that she would consider "fair."

Among the members of the Marcellus Shale Coalition are numerous natural gas producers as well as other businesses related to the gas industry.

James Loewenstein can be reached at (570) 265-1633; or e-mail: jloewenstein@thedailyreview.com.

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