Legislators in Harrisburg should resist the efforts of natural-gas companies to obtain a sweetheart deal of tax loopholes and lax drilling regulations.
The legislature has agreed to enact an extraction tax on methane wells by Oct. 1. Pennsylvania is the largest gas-producing state without such a tax to help pay for environmental protection and accident cleanups. It's overdue.
But as the deadline approaches, natural-gas companies are demanding rules on their terms. They want generous exceptions to a fair tax system, and to write favorable land-use regulations that would govern their industry.
Natural-gas companies are lobbying the legislature to resolve complicated issues of landowners' rights and local zoning in the industry's favor by Oct. 1. They want state laws on drilling to preempt local zoning ordinances, and the right to drill under a property without the landowner's permission.
These issues deserve careful study and thoughtful debate, not a rush job in a few weeks to satisfy an industry wielding its clout.
"They could locate their operation right next to a house," state Rep. Bob Freeman (D., Northampton) said of the drillers' proposal. "I don't see where they get the right to dictate conditions."
If the drillers don't get their way, the implication is that Senate Republican allies who've taken gushers of campaign cash from the industry could reject a production tax.
Senate President Pro Tempore Joe Scarnati (R., Jefferson) has received more than $105,000 in campaign donations from the gas industry in the past decade. If he burrows any deeper into the drillers' pockets, Scarnati may get luckier than Jed Clampett.
Oil and gas companies have flooded Harrisburg with more than $4 million spent on lobbying since 2007, and $3 million given to state candidates since 2001. Yet some in the industry feel that gas companies should be tossing even more money around the state Capitol.
Kathryn Klaber, president of the Marcellus Shale Coalition, which represents drillers, told the Inquirer Editorial Board that the industry's donations "are probably not where they should be."
She needn't worry. Contributions to legislators will soar even higher by the next reporting period as firms influence legislators and take full advantage of Pennsylvania's shameful absence of campaign-finance limits.
At the same time, the industry is seeking to water down the tax proposed by Gov. Rendell and Democrats in the legislature.
Rendell has proposed a 5 percent tax on the value of methane extracted, plus 4.7 cents per thousand cubic feet. It's modeled on the tax that West Virginia imposes on drillers. A tax should have been enacted last year, but Sen. Scarnati & friends killed it.
Now that a tax is looming again, the industry wants it to be ridiculously low. The coalition seeks a tax of 1.5 percent in the first five years of a well's operation - typically the period of peak production - and 5 percent thereafter, until production falls below a certain level.
Under the drillers' proposal, they would pay an effective tax rate of no more than 2.3 percent on most wells, according to an analysis by the nonprofit Pennsylvania Budget and Policy Center in Harrisburg.
An undetermined portion of this revenue will go to municipalities to help them deal with the impact of drilling, including road repairs and environmental cleanup. The industry shouldn't be trying to skimp on such obligations while it pours millions into buying friends in Harrisburg.
The boom of methane drilling in Pennsylvania is invading public lands, cashing in on natural resources, contaminating drinking water, and posing other serious environmental risks.