PIOGA Members: Gov. Tom Wolf’s news conference was broadcast on PCN this morning (February 11) and a portion of it can be viewed at: www.pacast.com. The link to a seven-minute video is the second item on this website at the present time. It does not include the questions and answers with reporters.

Provided below are a few key takeaways from the brief announcement and news conference:

  •  He answered one question about working with the industry to accept a tax which included the statement,”The alternative is not no tax. It’s no drilling, a ban like in New York.” A reporter asked him whether that was a threat, and he said, “No, it is not a threat. Thank you for allowing me to clarify that.”
  •  On several occasions, he made the comment that we and other states have “natural resources,” not “natural gas” that is appropriate to tax. He corrected himself at one point when he started to say “natural gas” to instead say “resource.” It will remain to be seen whether the administration advances a broader tax on extractive industries in Pennsylvania.
  •  He claimed in his opening remarks that the WV-modeled tax will reach $1 billion/year, through the 5 percent and $0.047/Mcf approach. He also said that the bill will protect property owners by not letting producers pass along the tax on royalty payments.
  •  He said the impact fee will be rolled into this new tax so communities will continue to receive that money. The lion’s share, however, will be targeted to education, with some to Department of Environmental Protection to make sure we do this right and some set aside for investment in alternative energy.
  • Finally, he said the 5 percent on wellhead price plus the $0.047/Mcf tax on volume will provide more predictability outside of price fluctuations, calling it a “hedge” against pricing changes. He stated that West Virginia’s tax structure is a “good laboratory and it’s one that works. They have a healthy industry there.” Given the difference in production levels between Pennsylvania and West Virginia over the past several years, the validity of that statement is very questionable. 

PIOGA learned in a review of the details of this proposal that this tax would be imposed on production from both conventional and unconventional wells. Our state legislators and new governor need to hear directly from us. If we are silent in this debate, we will lose. Contact your state representative, state senator and Governor Wolf’s office to express your strong opposition to any new tax on our industry.