In defense of the much-maligned gas fee

A bill to finally implement a fee on natural-gas extraction in Pennsylvania, recently passed by the state House, is a step in the right direction. Having cosponsored various proposals on this issue, I believe this legislation is a compromise that moves us closer than ever to a final agreement that can become law. It represents a balanced approach, allowing us to develop new energy sources while investing in programs that protect the environment.

Unfortunately, critics who are interested only in stopping all gas extraction in the state are distorting the facts and ignoring major components of House Bill 1950, which was passed by a bipartisan majority in the House. For example, they have failed to acknowledge that it would make historic investments in statewide environmental programs through the state's Oil and Gas Lease Fund.

Over the next decade, the bill would direct $1.2 billion to the state's Environmental Stewardship Fund, which supports the popular Growing Greener program. Growing Greener initiatives are responsible for preserving more than 100,000 acres of farmland and 42,000 acres of open space in the commonwealth, as well as capping more than 2,000 abandoned wells. Environmental groups have supported this legislation because they know the future funding and success of the program is in jeopardy without it.

H.B. 1950 would also allocate $40 million a year to the Hazardous Sites Cleanup Fund and $15 million a year to county conservation districts. And it would set aside funds to respond to gas-extraction issues that may surface in the future.

The recent debate has been further confused by faulty comparisons of the tax rates paid by gas extraction companies in different states. Those who want to stop all drilling in Pennsylvania say the fees contained in H.B. 1950 represent a 1 percent rate that compares unfavorably to corresponding rates in Texas and other states. But such calculations do not account for the more than $300 million in corporate taxes paid by gas drillers in Pennsylvania. In Texas, by contrast, the companies pay no corporate taxes.

Any comparison that does not include all the fees and taxes paid by gas companies is not useful in determining an adequate benchmark. A comprehensive comparison will show that Pennsylvania produces only 4 percent of the gas Texas produces but collects nearly 60 percent of the revenue.

The bottom line is that natural-gas companies pay a significant amount of money to do business here, and H.B. 1950 would increase that amount.

Those who would stop all natural-gas extraction are also ignoring the fact that natural gas reduces our dependence on foreign oil by providing a cleaner, domestic source of energy. At the same time, this growing industry has been a huge boon to Pennsylvania's economy.

Due to differences between the Senate and House impact-fee bills, we are only at the 50-yard line. Continuing negotiations and feedback from Pennsylvania residents will help us reach the goal. Until then, we must have a dialogue that considers all the facts.