Share This Page

Did a phone call telegraph the Wolf administration's real intent on shale gas?

| Saturday, March 12, 2016, 9:00 p.m.
Submitted
John Quigley, former secretary of the Pennsylvania Department of Environmental Protection.

Lots of eyebrows have been raised — and more than a few remain arched high among those in the commonwealth's shale gas industry — over a conference call this month set up by Deutsche Bank Markets Research and the Pennsylvania Department of Environmental Protection.

The March 4 call, hosted by the bank's Kristina Kazarian, and featuring state DEP Secretary John Quigley and his deputy, Scott Perry, covered what Ms. Kazarian billed as “the continued Marcellus-Utica build-out and specifically Pennsylvania's role here.”

No doubt, it was informative for anyone listening in. And, at least early on, Mr. Quigley did an even-handed job of billboarding Pennsylvania's energy charms. And an equally yeoman's job was done by both Quigley and Mr. Perry in running down the on-the-ground industry statistics and detailing the environmental regulatory regimen. For potential investors, it sounded like an honest brokering of Pennsylvania's shale gas and oil landscape.

Until it was not and the just-the-facts, ma'am, recitation turned political — not only a tacit discounting of the employment effects from the shale gas revolution but an open advocacy for an severance tax. One can only wonder how many potential investors crossed Pennsylvania off their list.

Shale-related employment “is probably about half a percent, if that, of total employment in Pennsylvania,” Quigley said. And the existing impact fee, which has generated something approaching $800 million in the past five years, was called “anemic,” producing a seemingly lamentable effective taxation rate on the industry of less than 1 percent to a highest estimate of 1.5 percent.

“We're leaving a lot of money on the table,” Quigley continued, the environmental protection guy shilling for a thorough plucking of the goose that lays the golden egg (but now far leaner because there's a glut of geese and a dearth of eggs).

Quigley called the fact that Pennsylvania doesn't have a severance tax “mind-blowing.” He pooh-poohed the suggestion that producers would go elsewhere should Gov. Tom Wolf's proposed 6.5 percent extraction tax win legislative approval.

That “really doesn't pass the reality test,” Quigley insisted. (Some producers still insist they'll do just that.) “(T)here is no excuse for Pennsylvania not to have a severance tax,” he reiterated.

To be fair, Quigley was asked by call host Kazarian to talk about the tax climate. And Quigley at least intimated that it would be more appropriate for the folks at the state Department of Community and Economic Development to address the severance tax and for the Department of Labor to talk jobs numbers.

Nonetheless, Quigley did talk about those topics — and with great specificity — and reasonable people could conclude, pejoratively. It's almost as if the benefits of the shale industry were being discounted to dissuade investment. That's certainly not the proper role for government. And it only reinforces the notion, for some, that the Wolf administration, in this conference call, telegraphed that it really wants to kill Pennsylvania's burgeoning shale fortunes.

Colin McNickle is Trib Total Media's director of editorial pages (412-320-7836 or cmcnickle@tribweb.com).

TribLIVE commenting policy

You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.