Natural gas industry denounces severance tax plan passed by Pa. Senate

Written by The Associated Press | Jul 27, 2017 12:54 PM

FILE - Workers move a section of well casing into place at a Chesapeake Energy natural gas well site near Burlington, Pa. (AP Photo/Ralph Wilson, File)

(Harrisburg) -- Drillers are denouncing legislation passed by the state Senate that would impose a severance tax on natural gas production, while environmental advocates assert the bill "emasculates" state regulators who oversee the industry.

The Senate approved a plan to balance the $32 billion state budget that includes a severance tax expected to generate about $100 million per year, as well as a new tax on consumers' natural gas bills.

The Marcellus Shale Coalition industry group asserts the taxes will "erode the commonwealth's competitive advantage" and cost jobs.

Other provisions of the legislation address industry complaints about the lengthy permitting process for new gas wells.

Environmental advocates and former secretaries of the Department of Environmental Protection say the provisions gut DEP's ability to regulate properly and should be challenged in court.

The Senate proposal includes heavy borrowing and some tax increases.

Under the plan, consumers' utility bills also would go up and Pennsylvania would make a new effort to capture tax revenue from internet sales.

Republicans who control the chamber unveiled their plan to close a $2.2 billion hole in the $32 billion state budget late last night.

It includes a proposal to borrow $1.3 billion against Pennsylvania's annual share of the 1998 multistate settlement with tobacco companies.

The legislation passed 26-24. It drew the support of Democratic Governor Tom Wolf, but could run into trouble in the tax-averse House.

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