Reasonable tax

Written by Rosa Colucci on .

The severance tax on natural gas pumped from the Marcellus Shale bed in Pennsylvania proposed by Gov. Ed Rendell ("Rendell Eyes Tax on Natural Gas Wells," May 25) makes far better sense than opening 400,000 additional acres in state parks for accessibility and drilling privileges to natural gas corporations in lieu of a tax on gas extracted from the wells.

The Marcellus Shale bed spans most of Pennsylvania and is the largest in the country. The Chesapeake Energy Corp., a major natural gas developer in Pennsylvania, states in its 2008 annual report that it expects to drill 3,900 net wells by the end of 2009 and to develop 1.25 million net acres of leaseholds.

The report goes on to state that the eastern United States natural gas market offers producers the best profit margins in the United States and lower drilling costs increase the recovery of these resources.

The profit margins of corporations drilling in the Marcellus Shale will not be seriously impacted by the proposed tax on their output. The large number of leaseholds by Chesapeake and other drilling companies negates any reason to open additional state forest lands.

The proposed tax is appropriate, in line with taxes in other states and should be enacted by the Legislature before July 1.




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