May. 29, 2015

LANCASTER – Speaker of the House Mike Turzai (R-Allegheny) hosted an energy roundtable today focusing on the statewide benefits and downstream development of natural gas and discussing employment ramifications from imposing an additional tax on natural gas.

Joined by the Pennsylvania Chamber of Business and Industry, Turzai and more than a dozen members of the Pennsylvania General Assembly heard from local business and government officials about how the development of Pennsylvania’s natural gas industry has benefited them, and how they were concerned that Gov. Tom Wolf’s proposed severance tax would stop this growth dead in its tracks.

“We are at the crossroads of determining whether downstream benefits of natural gas will continue to grow in places like Lancaster and Reading,” said Turzai. “We’ve toured all across the state where farmers, small businesses and workers have seen great benefits from the industry and they’ve made it clear that another tax upon the industry will cost jobs and money.”

The event was moderated by Pennsylvania Chamber of Business and Industry President and CEO Gene Barr.

“The natural gas industry has revolutionized the Commonwealth’s economy, helping to create hundreds of thousands of jobs, lowering energy costs for consumers and adding billions of dollars to the state’s economy,” Barr said. “However, proposals to enact additional taxes on this industry threaten our competitive edge in the shale play and hurt our ability to become a world-class energy hub. We need to look at ways to expand the industry and develop much-needed infrastructure to get natural gas to market, which will lead to increased job opportunities in the state and economic growth.”

More than 249,000 Pennsylvania jobs are currently tied to Marcellus Shale and related industries.

“We have been far too apologetic in telling the real story,” said Turzai. “Pennsylvania can realize our full potential if legislators reduce the tax burden on Pennsylvania families and job creators, cut regulatory barriers that inhibit job growth and drive entrepreneurs to other states, and expand opportunities for new industry sectors to come to the Commonwealth.”

By broadening responsible natural gas development polices within the Marcellus and Utica Shale plays, experts say it would transform Pennsylvania into a global energy hub overflowing with high-paying jobs.

In 2012, the American Chemical Council studied the potential impact natural gas could have on employment and found a staggering 1.1 million family-sustaining downstream jobs were available around the industry in construction, 980,000 potential jobs revolved around the supply chain and 200,000 manufacturing jobs were waiting to be filled.

“With a tremendous manufacturing base and a dynamic mix of major corporations, small businesses, and emerging industries, Lancaster, Reading and York have a unique opportunity to become an integral part of a robust global energy hub,” said Turzai. “We need to choose policies that allow that to happen, not policies that stifle growth, kill jobs and squander transformational opportunities.”

Currently, the governor has proposed dramatically expanding taxes on natural gas drillers, including a 5 percent severance tax in addition to a 4.7 cents per 1000 cubic feet (mcf) surcharge. The proposal also assumes a punitive/artificial price floor of $2.97/mcf.

Once these add-ons, along with price differentials and other costs are taken into account, the effective tax rate could rise as high as 35 percent and could effectually kill off additional job growth, Turzai said.

“In our budget discussions, one of the biggest questions we need to answer is whether we are interested in growing government and taxes or growing jobs and the economy,” said Turzai.

Representative Mike Turzai
The Speaker
28th District
Pennsylvania House of Representatives

Media Contact: Jay Ostrich
717.772.9943 (office), 717.649.6547 (cell) / / @RepTurzai