"A Conservative government is an organized hypocrisy."
Benjamin Disraeli, speech in the House of Commons, Mar. 3, 1845
Tea Party Republican Tom Corbett continues his scorched earth campaign as governor of Pennsylvania. He is gutting education and public services while handing out over $300 million in new tax cuts for corporations. He also takes organized hypocrisy to astonishing new heights. An article in the Philadelphia Inquirer lays out Corbett's faux fiscal conservativism in exquisite detail.
As new taxes go, a levy on natural-gas drilling in Pennsylvania would seem like a pretty easy political sell. Two-thirds of the state's voters support the idea, several polls indicate. Politicians are desperate for money to plug a $4 billion budget gap and prevent deep cuts in the state college system and other programs.
Philadelphia Inquirer, March 28, article by Joseph Tanfani and Angela Couloumbis
Pennsylvania remains the only state the refuses to tax shale gas revenue. Tom Corbett sees his opposition to raising revenues from shale gas as proof of his Tea Party bona fides. Let's tip-toe through the teabags.
Ignore the hundreds of millions in new corporate welfare in a state supposedly in fiscal crisis. We know that is the standard teabag script. We have seen it from Maine to Florida, from Wisconsin to New Jersey. It goes with attacks on unions, public education, immigrants, reproductive rights, civil rights, and any protection from corporate misconduct.
Let's also ignore the teabag rhetoric about the will of the people. Taxing revenues from shale gas has long enjoyed overwhelming public support in Pennsylvania. That support appears to be increasing, even among registered Republicans. In the teabag world, once elected, the people can and should be ignored.
No matter, Corbett and his aides say. "The governor does not govern based on polls," Henderson said last week. "He received a clear mandate, and it was clear to the voters that he does not support tax increases, period."
Philadelphia Inquirer, March 28, article by Joseph Tanfani and Angela Couloumbis
Corbett must be getting squeezed from the shale gas industry over severance taxes, right? Not quite.
"The Marcellus industry has been clear and outspoken on this for a year or so," said Ray Walker, vice president of Range Resources in Texas and chairman of the Marcellus Shale Coalition, an industry group. "We are willing to discuss a severance tax." But the new governor isn't.
In fact, Gov. Corbett, who signed a no-tax pledge during his campaign last year, is far more resolute in his opposition to a tax than many in the industry that would pay it.
Philadelphia Inquirer, March 28, article by Joseph Tanfani and Angela Couloumbis
The governor claims the gas drillers would pick up their rigs and go elsewhere if there is a severance tax. That is absolute nonsense. Everywhere else already has a severance tax. In fact, the four states with the highest rates of shale gas drilling (Texas, Wyoming, Oklahoma, and Louisiana) happen to have the highest taxes on revenue from the wells.
Even Tom Ridge, who provides public relations support for the Marcellus Shale Coalition, has repeatedly stated that the industry can make money and avoid negative attention from the public if they pay taxes.
"Nobody wants to pay more taxes," he said, but drillers need to be seen as good corporate citizens.
"You don't want to be grudgingly accepted," Ridge said he tells them. "You want to be warmly embraced."
So, despite a state budget deficit that cannot be closed without revenue generation, public and industry support for shale gas taxes, and severance taxes levied in every other state where drilling takes place, the Tea Party Republican governor refuses to consider one in Pennsylvania. He is willing to kick kids to the curb, but opposes any form of revenue generation on principle. If that does not define an extreme ideologue, I do not know what does.
You can find more on gas severance taxes here along with a drilling tax ticker that shows the revenues that could have been generated from even a modest tax.
Meanwhile, in the real world, communities are being exposed to the burden of external costs associated with the shale gas drilling orgy. That includes damage to roads not built to handle heavy truck traffic, law enforcement surveillance, and costly zoning evaluations and legal reviews with each drilling permit, not to mention noise, air pollution, and water treatment. Out of the goodness of his miniscule heart, teabag Tom Corbett has signaled his willingness to consider allowing local communities to collect impact fees to offset costs (if they beg hard enough).
"We need it now," said Mary Ann Stevenson, manager of Mt. Pleasant in Washington County. "It's difficult for the taxpayers. I'm consumed by the drilling industry. Our zoning officer is consumed by it. It's had a big impact that way."
More than 100 wells, compressor sites and a processing facility amounted to $100,000 in fees Mt. Pleasant paid over five years to lawyers who researched drilling rules and responded to letters, she said. The township's annual budget is about $1 million.
Impact fees would require rewriting existing limits on road repair bonds currently posted by businesses in the state.
A fee must be substantial. Road repair bonds are capped at $12,500 a mile, Kearns said, an amount that's "diddly squat" in the face of paving costs that can run six figures.
Ironically, other states have severance taxes and local impact fees for oil, gas, and coal extraction. Not Pennsylvania. The state also lags behind in fines and reclamation fees.
In addition, Pennsylvania's $1,000 per day penalty on drillers for violating state regulations lag many other states. The $25,000 per-company insurance bond that the state requires to plug abandoned wells is out of date, as well, since plugging a single well can cost as much as $100,000.
Let me guess. Teabag Tom will reluctantly allow communities to recoup some of the external costs associated with shale gas drilling, but he might have to ask for something in return.
At the top of the industry's wish list is a controversial provision called pooling, which could be used to force holdout landowners, under certain conditions, to lease their below-ground gas rights, and limits on the ways that municipal zoning ordinances could affect drilling activity.
Allowing corporations to compel landowners to lease their mineral rights and taking away the rights of communities to make zoning decisions sure sounds a libertarian paradise in the making.
And just for good measure, Corbett has just issued another teabag directive. From now on, Department of Environmental Protection inspectors will not be allowed to issue citations for violations by gas drilling operations without authorization by political appointees. Abrahm Lustgarten has the story for ProPublica.
The memos require that each of the hundreds of enforcement actions taken routinely against oil and gas operators in Pennsylvania each month now be approved by the department’s executive deputy secretary, John Hines. The memos are raising concerns that the state’s environmental inspectors can no longer act independently and that regulations could be overridden by the political whims of the state’s new governor, Tom Corbett.
“What this apparently is saying is that before any final action, the inspector must get approval by two political appointees: the secretary and the deputy secretary,” said John Hanger, who headed the DEP until January under former Gov. Ed Rendell and worked to strengthen the state’s oil and gas regulations. “It’s an extraordinary directive. It represents a break from how business has been done in the department within the Marcellus Shale and within the oil and gas program for probably 20 years.
“It’s on its face really breathtaking and it is profoundly unwise. I would urge them to rethink and rescind.”
Fracking stupid.
For more on Corbett's deregulation of the shale gas industry, see here.