A misguided tax on a critical industry

The Feb. 9 editorial “Severance Tax Should Be on the Table,” urging the Legislature to consider a severance tax on natural gas, cited the commonwealth’s COVID-19-related fiscal problems as a justification.

Imposing a tax on one of Pennsylvania’s most critical industries would be misguided, since the pandemic triggered reduced energy demand and lower natural gas prices that have hit the industry hard. This tax would kill more jobs and make one of our brightest growth industries less competitive over the long term.

Not only can our abundant natural gas power homes, businesses, industry, schools and farms, it can keep supporting Pennsylvania’s long-term air quality improvements and greenhouse gas reductions. The state’s emissions have declined 92% since 1990, a period when our energy production hit record levels and helped lower consumer prices by at least $30.5 billion.

Gov. Tom Wolf last year deemed the industry essential because it’s essential to the production of personal protective equipment that helps fight COVID-19. What a “thank you” a new tax would send to the huge Beaver County petrochemical complex, which will process gas to make PPE and other plastic products.

One last point: The editorial argues a severance tax is “reasonable” because other gas-producing states impose one. But Pennsylvania already imposes a similar impact fee on gas companies. Adding a second tax other states do not will just reduce our competitiveness.

Why pile on a productive part of Pennsylvania’s — and America’s — economy already under fire from the pandemic and the Biden administration’s halt to oil and gas leases on federal land?

Author: Michael Butler
Publication: Pittsburgh Post-Gazette
Scroll to Top