Background

Pennsylvania sits atop one of the largest deposits of natural gas in the world – the Marcellus Shale formation. Hyrdaulic fracturing technology has made it profitable for drillers to tap this resource, which is believed to hold enough recoverable natural gas to fuel the nation's gas needs for 19 years and have a wellhead value in excess of a trillion dollars.

Just as this resource is huge, so will be its impacts. So we need to ask: What will happen through the decades as this gas is drilled and piped around the Commonwealth? And what will future generations be left with when the last gas well is exhausted?

The answer largely depends on what happens now. Will a portion of natural gas revenues be reinvested in Pennsylvania's natural resources and communities? Will industry be held responsible for its impacts?

As these questions are discussed, the industry, which includes large, out of state corporations, is securing its investsments in the Pennsylvania Marcellus region. Between January 2008 and July 2010, the Pennsylvania Department of Environmental Protection (DEP) issued over 11,000 drilling permits in Pennsylvania's Marcellus region.

As of July 2010, less than 1/10 of these permits have resulted in drilling. Yet, even with only 1/10 of the wells drilled, Pennsylvania Marcellus Drillers have amassed a total of 1435 environmental violations (according to DEP) in just a 2.5 year time period.

Impact on Communities and Environment

Natural gas extraction imposes heavy costs on our communities: air pollution; pipelines, drilling pads and wastewater pits scarring our landscapes; heavy rigs damaging our roads; billions of gallons of water taken from our streams; and operational errors contaminating our land and water.

It is reasonable and fair that gas producers pay a severance tax with a portion of revenues invested in our natural resources and communities to help offset the impacts of drilling and piping gas around the state.

Severance Tax

Every major gas-producing state has some form of tax on natural gas extraction - except for Pennsylvania and New York (which currently has a moratorium in place on new drilling permits). Severance taxes are viewed as a basic cost of doing business in other states, and, while the revenue from such taxes can provide profound benefits to communities, the impact on industry is insignificant in comparison to other factors.

Some of the money raised from a natural gas extraction tax could be used to offset these costs and invest in watershed restoration and protection, habitat conservation, public access to outdoor recreation, and conservation of natural space and farmland. This can be accomplished by directing a portion of the tax to the Environmental Stewardship Fund (Growing Greener) as well as to the PA Fish & Boat Commission and PA Game Commission for habitat improvement and public access purposes.

Public Forestland Issues

Industry groups and some legislators oppose the gas severance tax and instead propose dramatically accelerating drilling on state forest lands to generate revenues for the state. These proposals fail to recognize that:

Our public foresters worked hard to achieve sustainable management certification of our State Forests, which our state's greatest public asset. Rampant, unplanned leasing of our State Forests not only jeopardizes ecologically sound forest management, it also threatens our forests' third-party certification. Read more.

Conclusion

Gas drillers will be in Pennsylvania for many decades to come and so will their impacts. They should pay their fair share for their use of and impact to our resources.

If we fail to reinvest in our natural resources as Pennsylvania's natural gas boom progresses, we will miss an historic opportunity to ensure that our descendants will receive a natural wealth equal to our own. We will miss an historic opportunity to invest in our communities so that they can prosper both during extraction activities and after the gas is gone.