Earlier this week, Citizens for Pennsylvania’s Future (PennFuture) called the recent economic study on the impact of natural gas drilling in the Marcellus Shale formation completed by the Pennsylvania State University for the industry and its supporters in the House Natural Gas Caucus “a study replete with fuzzy logic and even fuzzier math.”
“The study’s main finding – that a severance tax will drive up the cost of the gas, causing Pennsylvania drillers to lose customers to cheaper gas providers – has one very basic flaw,” said Jan Jarrett, president and CEO of PennFuture. “There is no cheaper gas anywhere, with or without a severance tax. Pennsylvania’s natural gas deposits have a huge competitive advantage, with higher Btu ratings than supplies elsewhere, and reduced delivery costs, since the gas is close to lucrative northeast markets. And I don’t care how much they dress it up with a study, this fact cannot be denied.
“And there is no case to be made that the severance tax will harm the growth of this industry,” continued Jarrett. “If this tax is onerous, we would expect that Pennsylvania would be the drilling capital of the nation. But it isn’t. Pennsylvania is 15th out of 32 gas-producing states, nearly all of whom have a severance tax. The gas is here, and the industry will drill where the gas is.
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