Where Will Shale Oil Go This Year?

330px-Marcellus_Shale_Gas_Drilling_Tower_1_crop

A horizontal drilling rig for natural gas in the Marcellus formation in eastern Lycoming County, Pennsylvania.

How did the oil industry get to tap Pennsylvania’s Marcellus shale without a severance tax? Will that change in 2015?

A detailed look at the lobbying effort by Allegheny Front shows the dimensions of the fight:

An investigation by the Allegheny Front and 90.5 WESA found the oil and gas industry spent heavily on lobbying while the state was writing regulations for shale gas. The industry spent $34 million on lobbying in Pennsylvania since 2007, according to the Pennsylvania Department of State’s lobbying disclosure database. That includes a high of $9 million in 2012, the year Act 13 passed. The money was spent by 27 companies that have drilled unconventional wells or are ‘board members’ of the Marcellus Shale Coalition, and five trade associations.

Compare that to the state’s largest environmental groups — who spent about $1.5 million dollars combined in that period — and $330,000 in 2012.

Flogging the oil industry for doing what comes naturally is important but solves only part of the problem. Supervision by the Public Utility Commission (PUC) has been removed from Act 13 by the Robinson Township case in the Pennsylvania Supreme Court, which restored local zoning control of oil and gas development. This ruling presumably deprived the oil industry of a significant part of their hard-bought legislative package.

The election of Tom Wolf as Governor reopens the oil and gas severance tax topic, and as a result, the question of local zoning versus control by the PUC, or a different body, will be back on the table too. And one reason the oil industry does so well in the legislative process is that the environmentalists are a true Tower of Babel. Their seriously-held positions range from reasonable up to and including extreme back-to-nature advocates.

In searching for useful middle ground, we need to peel away those who hope to cancel Pennsylvania’s and the nation’s amazing good fortune to have uncovered useful shale oil. This resource has changed our position in the world – going from heavily dependent on imported oil, to potentially becoming a major exporter of petroleum and gas. And the shale has changed the economy of much of the rust belt in Pennsylvania and Ohio.

Some public, who do not live in shale country, are willing to mail in a check to fight the shale. But realistically, revoking development of the Marcellus is not on the table and will not happen.

So the need going into 2015 is to find a sensible program of oil and gas taxation and regulation that keeps the baby healthy, and the bathwater that comes from shale development healthy too.

Share:

Leave a Reply