Rendell declares shale gas tax dead

HARRISBURG -- For the foreseeable future, Pennsylvania will retain its dubious distinction as the only state with underground shale that doesn't impose a natural gas extraction tax.

An unhappy Gov. Ed Rendell admitted Thursday that despite weeks of talks, he and General Assembly leaders have failed to agree on key details of a gas severance tax, including how high the rate should be and how the $100 million or more in annual revenue from such a levy should be divvied up.

Democrat Rendell has had been pushing for enactment of a shale-gas tax since his 2010-11 state budget speech in February, but now says it "clearly is dead this year" -- and for a lot longer if Republican Tom Corbett is elected governor on Nov. 2, because he opposes such a tax.

"The refusal of Senate and House Republicans to negotiate in good faith on terms of a promised natural gas severance tax has killed the effort to enact it into law this year," Mr. Rendell said.

Legislative Republicans, in turn, put the blame back on Mr. Rendell and House Democrats.

Environmental groups such as Penn Future and the Sierra Club were angry, because some of the gas-tax revenue would be used to protect the environment from drilling-related damage.

Penn Future President Jan Jarrett assailed Senate GOP leaders for the failure to work out a deal.

But Kathryn Klaber, president of the Marcellus Shale Coalition, a group of large gas producers, said Senate leaders "deserve credit for their months of work."

Besides Pennsylvania, the only other shale state without a shale gas tax is New York, but it has imposed a moratorium on drilling.

Bureau Chief Tom Barnes: tbarnes@post-gazette.com or 1-717-787-4254.

First published on October 22, 2010 at 12:00 am