The proposal to enact a Pennsylvania severance tax on natural gas producers is very troubling, as I fear it could discourage new investment in this growing state industry. I would urge state House Speaker Sam Smith to take a lead role to make sure this tax is defeated.
A severance tax would undoubtably be a negative influence in terms of investment in energy development.
This proposal supposedly is designed to emulate West Virginia's severance tax. According to energyfactspa.com, West Virginia has seen a 20 percent increase in drilling activity over the last 10 years. But here in Pennsylvania — with no severance tax — our drilling starts have increased 400 percent in that time.
Since 2009, West Virginia has added two new drilling rigs; Pennsylvania has added 56, energyfactspa.com states.
I don't think this is a coincidence. Companies invest where they can maximize their return on the dollar and taxes are a huge part of that equation.
If we want to keep our gas fields working — and maintain the thousands of family wage jobs and billions of dollars in economic activity they represent — we must reject this severance tax plan.
Chad A. McCutcheon
The author is the spokesman for McCutcheon Enterprises Inc., a waste management contractor for the oil and gas industry.
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