On November 22, 2011 11:48 am
Radio Show Recap 11-19-11
by Theresa Schaffner, TMS Intern
This week’s radio show featured Katrina Currie, an analyst for The Commonwealth Foundation, an independent, non-profit research and educational institute. Katrina was joined by returning guest Rick Stauffer of Gas Business Briefing. Rick gave us a quick update on Marcellus news, including a review of the DUG East conference held in Pittsburgh. Katrina focused on the drilling legislation passing through the PA congress, as well as the difference between an impact fee and tax, and why that difference matters to each of us.
What you will learn in Saturday’s Radio Show broadcast:
- Shell Oil announced that it’s going to reveal where it will build their cracker, which converts ethane to ethylene
- Location will not be revealed until January
- An expert panel said we won’t see production form Utica until 2013.
- The difference between the development of Utica and other shale plays
- The PA DEP announced its preliminary process for using acid mine drainage for fracking.
- By allowing producers to use drainage for the fracking process, the drainage is being cleared up while providing an alternative to using clean water from state waterways
- The difference between House and State legislation
- An impact fee would account for damages done by drilling companies without making PA less competitive in the industry
Excerpts from the show:
On pending legislation:
Katrina Currie- Two things. You hear “tax” and “fee.” If there is an impact not being addressed, then it makes sense to charge a fee to that impact. What doesn’t make sense is that these industries are making money; let’s take it and redistribute it to pet projects across the state. So we want an impact fee. Both bills call themselves a “fee.” Also, the governor has signed the no tax pledge which says he won’t create new taxes, yet both of these proposals are violations of the pledge. There are differences. The House bill is similar to the governor’s language. It’s local. Under the House bill, counties decide whether they want an impact fee and how much. They could be more competitive without the fee.
Tejas Gosai- So if you’re a proponent of free enterprise, this is good because these communities have the control to allow drilling in their area or tax it and keep it out.
Katrina Currie- We would see this as a good thing because it allows competition between local communities. Impacts should be addressed through state regulations.
Katrina– The EPA should not be regulating fracking in the state. The PA DEP testified that the state is the proper agency to be regulating. The EPA got involved in Texas and it was a mess. The people within the state know it best.
Tejas- Whom do you believe? Who will figure this out for us? And the other part is jobs—everyone wants jobs and this industry is creating them.
Katrina- My degree is in environmental science, and I care greatly about the environment. So even though the EPA isn’t regulating it, it is greatly regulated within the state. That is the correct way to do it.
Tejas- I’m going to read something. The PA Department of Revenue reports tax collections from mining incorporations increased by 592% over the past 2 years. So, can oil and gas companies be upset? It seems like they are being overly regulated and there are more negatives in their business. Can they afford it?
Katrina- The reality is that they will be here if it’s profitable.
Tejas- The governor had a plan in all this and we want the drilling here; right now it’s going to Ohio and other states. Are we going to lose a lot of economic development?
Katrina- if we are not competitive that is a possible reality. We have a high tax burden. If they develop a fee that is attached to impacts, then industries are more than willing to pay for it. That would not hurt us in the long run.