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Permit Disagreements In Severance Tax Argument Still Seem Irreconcilable

Kim Paynter
Governor Tom Wolf is renewing his annual call for a severance tax on natural gas. Most Republicans have no intention of supporting one.

As state lawmakers prepare for budget negotiations, Governor Tom Wolf is once again trotting out a natural gas severance tax proposal in hopes of slipping it into the final deal. 

And once again, the gas industry and most Republicans are meeting it with a resounding "no."

Even though some GOP lawmakers have historically been willing to pass the tax in exchange for permitting changes, a gulf remains between what Wolf and other Democrats are willing to give, and what it will take for them to accept.

Wolf's proposal is projected to make a bit more than $200 million annually, and comes with concessions to the gas industry that include giving drillers more time to build a well, letting them put more wells under one permit, and allowing some flexibility in the well's location.

But the only proposal that has so far been passed by Republicans would have gone much further.

Last year, the GOP-controlled Senate moved a bill that would approve permits automatically if the Department of Environmental Protection takes too long, let the DEP outsource permitting to third parties, and give lawmakers more say over the permitting process.

Senate GOP Spokeswoman Jenn Kocher said those provisions aren't negotiable.

"Basically, what they've offered at this point seems to be mostly token," she said. "I think that it shows that it may be more electioneering than actual policy-driven."

Most House Republicans have remained staunchly against the severance tax in all its forms--as have gas industry advocates.

Stephanie Catarino Wissman, with Associated Petroleum Industries of Pennsylvania, said there's little that would soften the industry's position.

"You know, you can throw in as many regulatory reforms or sweeteners as you'd like, but you're still looking to double-tax an industry, and in our view, those are not tradeable items," she said.

Pennsylvania already has an impact fee on natural gas, which effectively taxes gas companies for each well they drill. A severance tax is the more common way to tax the industry, and is levied on actual raw material that comes out of the ground.