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Daniel Rubin: Why the break for shale gas?

This was no Saturday Surprise, as when arts organizations woke up to learn they were the answer to Pennsylvania's budgetary woes.

This was no Saturday Surprise, as when arts organizations woke up to learn they were the answer to Pennsylvania's budgetary woes.

Environmental groups had seen this danger on the horizon for months and still couldn't stop it.

It was bad enough that legislative leaders wanted to close the budget gap by letting energy corporations drill for natural gas on 200,000 acres of new state forest lands.

What environmentalists couldn't understand was why the legislators refused to tax the amount of gas extracted, which other gas-rich states do.

New drilling techniques have allowed the mining of natural gas from a massive underground formation of rock that runs from the northeast to the southwest corner of the state.

Called the Marcellus Shale field, it is "the Saudi Arabia of natural gas," says Jan Jarrett, president of PennFuture, an environmental advocacy group.

Her organization doesn't oppose drilling. Gas is greener than coal or oil, she says, and it could help wean us off our dependence on foreign energy sources.

But the state has been played by "tassel-shoed lobbyists," she says, from companies like Chesapeake Energy, Range Resources, and Conoco Phillips, who during just the first half of the year spent well over $1 million charming legislators.


Already the state makes 660,000 acres of forest available for drilling. With the new lands, that adds up to more than half of Pennsylvania's share of the rock basin, which stretches from West Virginia to New York state.

Pennsylvania profits from leasing that land, and from corporate net-income taxes. But activists like Jarrett say the state walked away from about $100 million this year and as much as $600 million by 2014.

In response, Stephen Rhoads of the Pennsylvania Oil and Gas Association says those numbers are pure conjecture. "She doesn't know what she's talking about."

The governor took the tax, which 39 other states impose, off the table a couple of weeks ago when it was clear that Senate Republicans would not support it.

Rendell "wants to go a little more slowly, and there's a chance he may revisit it next year," his spokesman, Gary Tuma, said at the time.

Gas producers argued persuasively that such a tax would hurt the young industry. "We're still in the early stage of exploration," says Rhoads of the energy association.

Jarrett says she thinks the industry will grow up plenty fast, given the high quality of natural gas under Pennsylvania's woods, and the savings that come from being so close to their customers on the Eastern Seaboard.

Getting paid

"Huge corporations are coming here to access the Marcellus Shale," Jarrett said by phone this week from Harrisburg, "but instead of taxing them, legislators hit small nonprofits like the arts community and churches and fire companies that run small games of chance."

The new technology involves horizontal drilling - the bit travels thousands of feet down, then turns sideways. Pressurized water and chemicals help fracture the rock, releasing trapped gas.

Andy Loza, executive director of the Pennsylvania Land Trust, worries about how quickly the natural gas industry is taking off.

The environmental impact could be huge. Last week 8,000 gallons of a "potential carcinogen" used in the drilling process spilled in Susquehanna Township and reached a nearby creek. The agencies charged with protecting the land and waters? They're being cut, too.

"Companies are going to come, they're going to take the gas, make a fortune, and send that fortune largely elsewhere," Loza warns. "Pennsylvania will be left to clean up the mess for many decades and perhaps centuries to come."

These woods belong to all Pennsylvanians. Seems to me that if we're not going to preserve them, we ought to make sure we get better paid.