Letters: Natural gas tax needed to be delayed
The Inquirer's assessment of how a talented member of my staff got hired by a private natural gas drilling firm is full of holes ("Drilling for friends," Thursday). Let me review the context in which I made the decision to delay the imposition of a tax on natural gas extraction.
The Inquirer's assessment of how a talented member of my staff got hired by a private natural gas drilling firm is full of holes ("Drilling for friends," Thursday). Let me review the context in which I made the decision to delay the imposition of a tax on natural gas extraction.
In the face of taking the brunt of the public's and the Republican Party's outrage over my proposals to increase the personal income tax and suspend business-tax cuts, it is reasonable to question why I would ever suggest a delay in enacting a less painful, more limited tax. Unfortunately, since I proposed taxing natural gas extraction last February, new economic realities affecting this market have emerged.
Over the last four months a significant glut in the natural gas market developed, forcing the price of natural gas down. As a result, companies are drilling less, and focusing that reduced drilling activity where they can drill for the lowest cost. Second, there is a severe shortage of drilling rigs, also forcing companies to be more discriminating about where they drill. Finally, the big Texas and Oklahoma firms that are drilling in the North are making significant finds and pulling out a good quantity of product in West Virginia. It costs these companies money to expand or shift operations to the newer gas deposits in Pennsylvania, and given the market conditions I just described, any additional costs simply decrease the pace at which these firms are willing to expand into Pennsylvania.
This was a tough year, and most of us in this budget battle are bruised and scarred. My staffer, who is leaving to work for a natural gas drilling firm, has his share of injuries. His role as an honest broker forced these companies to understand that they will be taxed and that they must meet our environmental standards. He has been hired by this firm for the same reason I hired him: He's smart and hardworking.
When it comes to policy, I make decisions based on facts and facts alone. The facts indicated that a six-month delay in the imposition of the tax would give us a better chance to attract these companies and ensure they invest the capital necessary to protect our waterways and minimize the impact on the forests and other lands when they drill.
In my more than 22 years as a public official, I have never made a decision on policy using any criteria other than what I believed is right for the public. To suggest I would make an important decision based on helping a staff member get a job is absolutely unbelievable and totally ludicrous.
Gov. Edward G. Rendell
Harrisburg
