While Washington, D.C. appears to wage a regulatory war on natural gas — and the home appliances that use it — the local industry is generating record revenue here in Pennsylvania, another sign of the energy sector’s importance to the Keystone State.
The Pennsylvania Public Utility Commission’s (PUC) report on revenue from natural gas industry impact fees shows the state collected $278.9 million in 2022, a $44.4 million year-to-year increase and the most since the 2012 tax went into effect.
“Among Pennsylvania’s many competitive advantages is our robust natural gas supply, which provides Pennsylvania families and businesses with affordable and reliable energy,” said Pennsylvania Chamber of Business and Industry President and CEO Luke Bernstein. “And, as today’s impact fee announcement makes clear, the natural gas industry generates hundreds of millions of dollars in annual revenue to support our local governments, environment, infrastructure, and public safety. Natural gas has been a game changer for our economy and positions Pennsylvania to be a global leader in energy production for generations to come.”
Jim Snell is Business Manager at Steamfitters Local 420. He said that while unions and the Chamber don’t always agree on economic policy, they are on the same page here.
“The benefits of natural gas development aren’t isolated solely to the commonwealth’s shale fields. These record-setting revenue numbers mean more dollars into state coffers for direct investment in communities across Pennsylvania,” Snell said. “None of it would be possible without the energy superhighway our members build to deliver it. Pennsylvania’s pipeline network links all of us to this shared resource and the enormous benefits it brings.”
Critics, particularly those who support President Joe Biden’s aggressive efforts to push the U.S. into a green-energy economy, say the damage from climate change far outweighs the benefits from natural gas and other fossil fuels. Progressive legislators like state Sen. Katie Muth (D-Chester/Montgomery) and State Rep. Danielle Friel Otten (D-Chester) have proposed legislation to discourage natural gas development in the state.
“Sen. Katie Muth has been an opponent of natural gas in Pennsylvania ever since she was elected to the Senate,” said Pennsylvania SRCC Communications Director Michael Straw. “Her extreme positions would result in natural gas companies shutting down, job losses, and higher utility bills for Pennsylvanians.”
Marcellus Shale Coalition President David Callahan said the numbers validate the state’s approach to allowing production and generating revenue.
“Policymakers should note that Pennsylvania’s unique approach to a severance tax allows the entire Commonwealth to benefit from the natural gas produced here,” Callahan said. “It’s a structure that no other energy-producing state uses, providing a valuable revenue stream that directly benefits municipalities, state agencies and environmental programs.”
The revenue numbers come as some communities across the country and the U.S. Department of Energy are making it harder for consumers to choose natural gas. Climate activists have targeted natural gas use in homes and businesses for years, partly by banning natural gas hookups in new construction. New York City has enacted such a ban, and New York Gov. Kathy Hochul (D) recently signed a budget doing the same statewide.
In California, nearly 70 communities have imposed restrictions on natural gas. In response, some 20 states have passed “consumer choice” bills preventing local governments from banning natural gas.
Last July, former Pennsylvania Gov. Tom Wolf (D) vetoed Senate Bill 275, which would have prevented local governments from enacting natural gas hookup bans. Gov. Josh Shapiro (D) is expected to follow a similar policy.
Industry advocates say those progressive policies fly in the face of the realities of life in the commonwealth.
“Pennsylvania-produced natural gas benefits families and businesses with access to abundant, reliable energy while injecting millions of dollars annually into environmental programs, infrastructure upgrades, public parks, and public safety in both producing and non-producing regions alike,” said American Petroleum Institute Pennsylvania (API PA) Executive Director Stephanie Catarino Wissman.
“The impact tax, coupled with the natural gas and oil industry’s contribution of more than $75 billion to the state’s gross domestic product, underscores the importance of having a robust energy sector and commonsense policies and predictable regulations to sustain it.”