Friday, June 24, 2011
Senator John Yudichak Leads The Effort On Marcellus Shale Impact
Back in March of this year Senator John Yudichak(D-Luzerne) proposed legislation that would implement a severance tax on the extraction of natural gas in Pennsylvania. He was joined in his bipartisan effort with Senator Ted Erickson (R) and Senator John Blake(D) at the news conference according to PA Environment Daily.
“My goal is to initiate a fair and responsible severance tax in Pennsylvania. This proposal will generate significant revenue for local governments, our clean water infrastructure, and the Growing Greener program,” Sen. Yudichak said. “At the same time, such a moderate tax would allow the industry to continue expanding and creating jobs, as well as generate the economic development activity that Pennsylvania so desperately needs.”
Under Sen. Yudichak’s plan (Senate Bill 905), the severance tax would be gradually implemented based on the gas production of each well:
• A severance tax of 2 percent of the gross value of the natural gas severed at the wellhead; this tax rate would be in place for the first three years of well production;
• When the well has been in production for more than three years, the tax rate would increase to 5 percent;
• The tax rate would readjust back to 2 percent if a well’s rate of production fell below 150 MCF of natural gas per day and above 60 MCF per day;
• Wells that produce less than 60 MCF of natural gas per day are exempt from the tax.
If implemented, the severance tax would go into effect on July 1, 2011.
According to Yudichak, revenue from the severance tax would be distributed to three program areas:
• 33 percent of the revenue generated to the Commonwealth Financing Authority for water supply, wastewater treatment, stormwater and flood control projects;
• 33 percent to the Environmental Stewardship Fund (Growing Greener); and
• 34 percent to local governments in those areas of Pennsylvania that are experiencing the direct effects of natural gas drilling.
Senator Yudichak has been closely monitoring this legislation as it moves along in the Senate process.
Let me be the first one to put this observation out there in public. I met Senator Yudichak during the last election cycle. He is a straight shooter, very intelligent, and well versed on government and issues affecting the public.
His bipartisan approach out of the gate as Senator is worthy of mention. He has worked well with Representative Tarah Toohil and Congressman Lou Barletta, both Republicans. Keep an eye on Yudichak for a stab at the governor's seat one day. If he continues on this path he will be a formidable candidate.
It is also worthy to note the great job Rep. Tarah Toohil and Congressman Lou Barletta are performing in "crossing the aisle" to reach out to everyone they represent. It is a new era in politics for this area, quite refreshing actually.