The Marcellus Shale

The Marcellus Shale is a large natural gas reserve that will likely be developed soon, due to its size and the demand for natural gas. Most of this reserve lies in the northern Appalachian mountains, and thus what to do with it has become somewhat of an issue for this years Pennsylvania Gubernatorial race


So the main issue is ... should the energy companies be taxed for mining the natural gas? How should they be taxed, if taxed?

Passage of a bill looks eminent, so it looks as if the issue will be more rhetorical and theoretical than anything else.

I look at it this way. The natural gas is there. How much is there is unclear, but it's there. Unless the states decide to go to war with one another, or some country invades and takes over the Marcellus Shale, it will still be there, and it will still be in Pennsylvania. In this case, it is the job of the government to make sure minimal damage is done in order to extract the natural gas, or to ensure that what damage is done can be reversed. If it takes a tax to make sure this can be done within the state budget, a tax which is the similar in neighboring Marcellus states (which, by the way, because it's in shale form, cannot be a "my milkshake drinks your milkshake" scenario), then the tax must be enacted. It's the only responsible thing to do. Having the tax will not drive away business because the industry is fixed. The natural gas is where it is and it cannot move. In fact, it is the duty of the state to make sure it is getting its fair share for parting with its limited precious resources. Is not the state its own actor in this market?

Given the recent history of the energy mining industry (ahem, BP, ahem) I'm not so certain stasis can be trusted to the corporations. And to put it flatly, once the natural gas there is gone, so is the industry with the region. Recompense of some kind must be had.

RECOMPENSE!!!!

http://www.philly.com/inquirer/business/20101012_On_Pa__natural_gas_tax__different_polls_yield_different_results.html

-- Knuttel