Pa. Residents Pay the Taxes, Should Share the Profit

Posted by By at 7 February, at 07 : 05 AM Print

As I begin to write this offering, we await Gov. Tom Corbett’s second State of the State address, scheduled for Tuesday, Feb. 7 at 11:30 a.m. There is some expectation he will remove a moratorium on releasing additional state forest land for Marcellus shale natural gas exploration. Currently, about 700,000 of the state’s more than two million publicly owned acres has been leased to Marcellus shale developers.

Meanwhile, the state House of Representatives has received a Senate report on House Bill 1950 – a bill that has been batted back and forth, in one form or another, for two years and which may, eventually, begin to levy a tax on the billions of dollars in profits gas and oil companies plan to extract from beneath our feet.

Several years ago, my mother owned 50 acres of woodland in Maine. One day, while I was on leave from the Navy, she came home to report seeing a van parked on the road that ran around the property. Would I go check on it, she asked.

By the time I arrived where the truck had been, it was gone, but it didn’t take long to discover its purpose. Someone had been slipping into Mom’s forest and cutting White Birch. Several four-foot sections lay waiting to be picked up.

White Birch is, or was then, valuable for veneer, that thin layer of real wood glued onto pressed chipped wood furniture to make it look expensive. The unknown logger had been taking the purloined product to a local mill and selling it – for about $100 a cord, as I recall.

We did not mind that a stranger had been on the property. The land had been there before we arrived and would be there long after. People hunted on the land, and in winter the snowmobile interstate passed through it. My nephew once found a family of raccoons in a den under a fallen tree, moose often walked past our door, and deer and rabbits ate from our garden.

We let it be known in town that if anyone was going to earn a profit from the land, it would be she who paid the taxes on it. If the thief would like to make a deal, maybe we could come to an agreement by which we would share the proceeds. The thievery stopped, and life went on.

Now my home is south central Pennsylvania. I, along with a lot of other residents, own more than two million acres of woodland in the state, and we drive and walk through millions more acres held in private hands. It is home to deer and bear, Bald Eagles, several species of hawks, a bunch of rabbits and foxes and not a few Timber Rattlesnakes.

We often sell some of the wood, when it reaches a harvestable stage. That is good forest management, and it provides some operating capital for government functions, not the least of which is continued management of the resources on and, to lesser degree under, the ground.

We are leasing drilling rights to the gas beneath the our land. The leases, which run from five years for a non-productive well, to the life of a producing well. The lease also applies to any exploration, including layers of natural gas below the 8,000-foot-deep Marcellus shale deposit currently in the news. The leases are estimated to contribute about $65 million dollars to the state Oil & Gas Fund this year.

The fund was established in 1955 to help pay for acquisition and upkeep on the state’s public parks and forests. Since 2002, the General Assembly has diverted $383 million of that money to the General Fund.

Unfortunately, Gov. Corbett has been steadfastly unwillling to tax the profits coming out of the ground. On the other hand, the legislature seems poised to approve impact fees – 60 percent earmarked for counties and municipalities impacted by Marcellus-related operations and 40 percent to statewide environmental programs.

A report published last week said natural gas developers have pocketed, in the past two years, more than $3 million in taxes they would have paid in any natural gas producing state but this one. That number is only going to increase as the amount of gas taken from the Commonwealth increases.

Then, the gas companies will make even more profits as other tax money helps them develop fueling stations so the gas can be sold to operate cars, trucks and school buses. U.S. Sen. Bob Casey, D-Pa., announced Friday he plans to present a federal bill to help do just that.

Unlike the fellow who surreptitiously harvested White Birch from Mom’s woods, Marcellus developers operating in Pennsylvania are not thieves; they are simply taking the advantage given them by existing law – or lack of it. Unfortunately, the effect is the same. We who collectively own the resources are being told that our payoff for allowing it to be exploited is the knowledge that we have given some jobs, however temporarily, to some people who need them.

It is well past time we got the gas developers to help pay for some of the ability to make more profits – and not in an “impact fee” that many county and municipal leaders can attest requires them to spend their taxpayers’ money to prove how much Marcellus has cost them before they are entitled to a share of the cash.

Photo by Tom Owad
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- who has written 169 posts for Rock The Capital
John Messeder is an award winning journalist with more than 35 years experience writing about education, environment and local government issues. He has lived in Maine, Florida, California and Alaska, and, by temporary turns, numerous places in between. John also is an accomplished photographer, and avid hiker, conservationist, oral history buff, and author of several books he has not yet got 'round to writing. He lives in Adams County, Pa., just over a hill from Gettysburg, with his wife and Golden Retriever. He may be contacted at - Email jmesseder

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