Inquirer Editorial: Gas tax's fate tied to cash

Now that the House has approved a tax on methane drillers in Pennsylvania, the public will learn the extent of the industry's sway in the Republican-led Senate.

The fate of this overdue tax has been placed squarely in the hands of senators who've accepted generous campaign donations from drillers. Meanwhile, the Senate has resisted sensible limits on campaign contributions.

In the absence of election reform, the natural-gas industry has donated more than $400,000 in recent years to senators' campaigns. The methane donors have favored Republican senators seven-to-one over Democrats.

So it's no surprise the leading options in the Senate are a low production tax that would be a giveaway to drillers, or no tax at all. The Senate won't be in session this week but might consider a proposal the week of Oct. 11.

If a production tax does emerge, the General Assembly should adopt a plan that is closer to the House bill. Senate Republicans are considering a plan to tax methane wells during their most productive period at only 1.5 percent, one of the nation's lowest rates, rising to 5 percent later.

The House bill would result in one of the highest tax rates nationally - 9.8 percent. But even that is unlikely to scare away drillers, considering the vast deposits of natural gas in the state, the lack of a property tax on drillers like those imposed by other states, and the proximity to producers' markets.

Rep. Karen Beyer (R., Lehigh), one of 12 House Republicans to vote for the bill, said a drilling executive from Dallas told her that the industry is willing to pay a production tax. She called Pennsylvania's lack of an extraction tax "an outrage."

The House version would generate about $300 million in the first year, with revenue split 40 percent to the state and 60 percent to municipalities and environmental-cleanup programs. The money is needed to help deal with the impact of drilling, as well as monitoring and regulating gas firms.

Drillers have been using the state's low-cost resources for years. The Senate must ensure that the industry pays its fair share.