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Nazareth, Pa., United States

Thursday, September 09, 2010

Orloski & Browne: A Civil Debate About Marcellus Shale

State Senator Pat Browne and his Democratic opponent, Allentown attorney Rick Orloski, are once again waging an issues-oriented campaign, devoid of the personal insults so common everywhere else. Earlier this year, Brown actually withdrew a challenge to Orloski's nomination petition after an impassioned personal appeal from his opponent. Now these opponents are engaged in a refreshing civil discussion of Marcellus Shale, which could lead to economic prosperity or environmental disaster. I wish they could both serve.

Orloski to Browne:

Republican Senate leaders have previously committed to Governor Rendell to enact a severance tax on Marcellus Shale drillers/producers by October 1st. The deadline is fast approaching, and Republicans appear to be welshing on that commitment.

I understand that your gubernatorial candidate, Tom Corbett, has publicly committed to no tax on Marcellus Shale drillers and producers. In simple terms, he is cprepared to allow out-of-state and foreign companies to come into our state and pipe away our natural resources without any direct financial benefit to the common weal. The taxpayers of the 16th senatorial district ought to know where you stand.

There are only two real options:

1. The taxpayers ought to receive a direct financial benefit from the drilling operations in the form of a substantial "severance tax"; OR

2. The Pennsylvania Legislature will be giving big oil and natural gas industry a gift of our natural resources and allow them to extract the natural gas without any benefit to the citizens of Pennsylvania.

As you should know, no state with substantial natural gas resources just gives it away. Every major gas producing state imposes a severance tax. Governor Rendell has proposed that Pennsylvania follow the West Virginia model, namely, a 5% levy on the value of the natural gas that is sold + a surcharge of 4.7 cents for each 1000 cubic feet of gas produced. Are you prepared to support the West Virginia model for a severance tax?

Needless to say, a severance tax is only the first part of the equation. Pennsylvania needs a new regulatory structure to make sure that the gas is extracted without causing environmental damage. The first part of the equation, however, is a severance tax. I am calling upon you to join with Governor Rendell to support a substantial severance tax so that our taxpayers get tax relief from the depletion of this natural resource.

Senator Browne, where do you stand on this vital financial and environmental issue?

There is a large contingent of Republican ideologues in the State Senate who want to delay the vote with the hope that a newly elected Governor Corbett will veto the severance tax. That is contrary to the earlier commitment and is not in the best interests of the Pennsylvania taxpayers. I call upon you to stand with Governor Rendell and oppose the ideologues in the State Senate who want to give our natural resources away to the oil and natural gas industry with either no tax or a minimalist tax.

Your constituents want to know.

Richard J. Orloski

Browne to Orloski:


Thanks for your letter. I along with the rest of the Republican leadership team in the Senate plan to keep our commitments made as part of the 2010-2011 budget negotiations. I am surprised, however, that the only direct benefit you see from the largest energy development opportunity in Pennsylvania in the last one hundred years is revenue from an excise tax. I would argue that the projected 200 thousand jobs to be created by the proper development of the Marcellus play to be a much more significant direct financial benefit to Pennsylvania than the revenue from an excise tax will ever be. Taking such a position is to argue that the only direct financial benefit received from Pennsylvania's powerful legacy of "natural resource" based industry was the checks attached to the steel and coal corporate tax returns.

While we are on commitments, both chambers had also agreed as part of the 2010-2011 budget negotiations to establish an independent fiscal office by the end of the year. Since this office will lead to a better accounting and utilization of the severance tax revenue the commonwealth will generate, I am sure you will bring your advocacy to bear for this initiative as well. All the best,



Anonymous said...

Many of those jobs won't go to PA folk. Haliburton brings in their folks from everywhere, they stay awhile, take their money home and come back after a short liberty.

While Browne is correct about the economic benefit, it is overstated to make the risks seem more palatable.

Anonymous said...

I'm out in the area now. Hotel parking lots are full of work crew trucks. Lots of Halliburton. Lots of out of staters, although guys from Saint Marys and western PA are here, too.

Anonymous said...

Haliburton and large companies will naturally control many of the technical jobs relating to the drilling. Its the simple fact that its the type of specialized work that local firms don't do. They own the patents and intellectual property rights on fracking.

There are many jobs that are going to PA people (i.e. the hotel where all of the cars are parked). Even beyond that, there are local construction firms that have substantially benefited which employee a lot of people. My cousin owns a large construction company that previously made its bread and butter doing the grading work for McMansions. The housing bubble burst and they (and the several dozen guys that work for them) were in danger of going under. The adapted and moved operations north where they now do the grading work relating to drilling operations. Their workers commute up for the week and stay in....hotels. Its a Bucks County based company. Just because they are in hotels doesn't mean that they're from out of state. These local communites (Tioga, Bradford. . . .) don't have large economic basis or large numbers of skilled workers. I don't think they have the population base of Emmaus much less Allentown.

Haliburton have their fingers in this and essentially have a cornered market on the "fracking" process. They own the patents and they'll control it, but there are a lot of locals that are surviving on this stuff.

That said, I agree with O'Hare that its refreshing to see an issues oriented campaign between two gentlemen. These are controversial issues where there is room for valid disagreement. Good for them for having a reasoned debate.

Anonymous said...

Corbett and Browne opposing the Marcellus severance tax should DISQUALIFY them from holding public office.

Land leases range from as low as $10 per acre to as high as $6,500 and acre. I heard of one land owner leasing his land for $35 an acre but is getting a check for $60K per month in royalties.

What Corbett is saying is that he thinks the PA taxpayer should pay for rebuilding all the roads and bridges in northern PA. Many of the roads and bridges have been reclassified to handle the heavy traffic and it shows.

There are many out of staters working on Marcellus shale. Just look at all the out of state License plates. The gas is so profitable, PA jobs will not be impacted by a tax.

Corbett wants to put the full burden of gas drilling on PA residents.

This issue alone is good reason NOT to vote for Corbett.

Anonymous said...

I thought PA communities already have a right to impose a mineral rights tax.... I guess the question is "Is natural gas classified as a mineral right or should it be, since it is mined?"
And what about all the methane now being collected by the lanfills?

Anonymous said...


rich from king edville said...

I dealt with Orloski in the past .
He makes about as much sense now as he did then.

Anonymous said...

I just read that Mr. Corbett had received $361,207 from the gas drilling industry through April.

Now you know the rest of the story.