How Not To Defend The Shale Gas Industry

Is there anyone who can credibly defend shale gas industry interests in Pennsylvania? Certainly, Lieutenant Governor Jim Cawley isn't up for the task. "Painful" is the best way describe his argument in support of the tax recommendation coming from the Marcellus Shale Commission:

I have read that the Marcellus Shale Commission’s recommendation of an impact fee, targeted to the communities directly affected by Marcellus drilling, is “unfair to everybody else in Pennsylvania.” Why should people unaffected by drilling collect on an impact somewhere else? Should part of Philadelphia’s wage tax go to Pittsburgh? When a house burns down in Scranton should someone in York share the insurance settlement?

Interesting (and stupid) that Cawley brings up the wage tax. Why is there a wage tax? Because all the costs and benefits of economic activity don't fit neatly into our legacy jurisdictions. Cawley is undermining his own position.

The crux of his unpersuasive essay is what is fair, not what is the best policy. He's left gilding a turd and calling it the golden egg that the shale gas goose gave Pennsylvania. Meanwhile, North Dakota spreads the benefits of the Bakken Shale play around the state:

North Dakota is one of the few states now running a budget surplus instead of a deficit. According to the North Dakota Petroleum Council, crude oil taxes on production and extraction averaged 10.3 percent in 2010, bringing $749.5 million in state revenues. In addition, the industry spent $1.49 billion in taxable sales and purchases. Natural gas brought in over $10.1 million in extraction taxes in 2010. Revenue from oil and gas operations is disbursed broadly to support infrastructure, education, trust accounts, and local governments. State and local governments face a range of new requirements to support the surge in oil production, especially road repair and construction.

That's right. North Dakota has extraction taxes on both oil and gas. Now consider Cawley's ridiculous claim:

The reason drillers are drilling now is that we have kept out of the way by not specifically targeting a single industry — theirs — with a tax no other industry in the state has to pay.

They wouldn't be drilling now in Pennsylvania if there was an extraction tax? Tell that to North Dakota. Cawley is a shill for the natural gas industry. It should buy a better spokesperson.