*Prior to being appointed PA's gas Czar, Patrick Henderson was State Senator Mary Jo White's administrative attack dog.
Really? Marcellus Shale bringing energy revolution to state Commentary Mike Krancer and Patrick Henderson
Marcellus Shale bringing energy revolution to state Commentary Mike Krancer and Patrick Henderson
Tuesday, November 20, 2012
RECENT REPORTS from Standard & Poor’s and ITG showing the amount of recoverable gas in the Marcellus Shale
Both studies confirm that Pennsylvania’s Marcellus Shale formationhttp://us.mg5.mail.yahoo.com/neo/# is the global superstar of natural gas formations. Marcellus Shale will help make Pennsylvania the energy capital of the nation and spark the rebirth of our petrochemical and manufacturing base. Production from Marcellus wells is exceeding expectations and some of the wells are among the most productive in the world. We already have 240,000 jobs related to our oil and natural gashttp://us.mg5.mail.yahoo.com/neo/# extraction activities. When it comes to production numbers, Standard and Poor’s own words confirm that this is a “mere drop in the bucket” of the Marcellus’ full potential.
These reports also say that the potential natural gas liquidshttp://us.mg5.mail.yahoo.com/neo/# recoverable from the Marcellus are proportionally higher than any other shale gas formation. This is terrific news for Pennsylvania, validating Royal Dutch Shell’s announcement that it is exploring the construction of an ethane cracker facility in Beaver County, a project that would account for 10,000 jobs in the construction phase alone.
Also reported is a dramatic and historic change in the direction of natural gas flows in America. Flows always have been from the West or Southwest United States to the East. Not anymore. Pennsylvania became a natural gas exporter in 2010 and is perfectly located to be the supplier to the tremendous growth markets of the northeastern United States.
This new energy revolution also is being seen in Philadelphia. Refineries that were just recently pronounced dead have new life – in no small part because of hydraulically fractured, domestic oil and natural gas. The result is thousands of jobs and cleaner air from the use of natural gas and lower sulfur domestic Bakken crude oil http://us.mg5.mail.yahoo.com/neo/# at the refineries
Pennsylvania oversees this development responsibly under its effective oversight and comprehensive set of laws and regulations. Through Act 13, Gov. Tom Corbett and the Legislature not only have enhanced environmental protection standards, but also put in place a per-well impact fee, with an initial distribution of $204 million to Pennsylvania municipalities and commonwealth agencies. From encouraging wastewater recycling to one of the most progressive hydraulic fracturing fluid disclosure laws in the nation, the state’s oil and gas program assures responsible, protective development of natural gas. Pennsylvania has more than doubled the number of oil and gas http://us.mg5.mail.yahoo.com/neo/# inspectors, who have conducted more than 20,000 inspections just this year.
Every Pennsylvanian is already benefiting from Marcellus Shale. We are only at the beginning of building Pennsylvania into the energy center of the world and the jobs center of the country.
Mike Krancer serves as secretary of the state Department of Environmental Protection, and Patrick Henderson is energy executive in the Office of Gov. Tom Corbett.
From: John Trallo
I'm wondering if it is even possible for Corbett, Krancer, and Henderson to tell the whole truth anymore. Or maybe that's not part of their job discription in the Corbett administration.
Lie #1: "Production from Marcellus wells is exceeding expectations and some of the wells are among the most productive in the world."
Fact: Marcellus wells are droping-off at a rate of 67% every 105 days according to the US/DOE, requiring more frequent re-fracturing, more water consumption, more chemicals, more truck traffic, more compressor stations, more cost, and more chance of contamination. Oh, and less royalty payments to landowners since the operating costs come out of their share. *Some have even gotten a bill, or a statement against future royalties from tha gas companies because the operating costs were greater than their royalty!
Lie #2: "We already have 240,000 jobs related to our oil and natural gas extraction activities."
Fact: 220,000 of those "jobs" are in ancillary industries that already existed long before the gas industry came to PA. In reality, less than 10,000 workers are PA residents, and those jobs are high-risk, temporary, or transient at best.
Lie #3: "Royal Dutch Shell’s announcement that it is exploring the construction of an ethane cracker facility in Beaver County, a project that would account for 10,000 jobs in the construction phase alone."
Fact: Royal Dutch Shell is doing this on the dime of PA taxpayers in the form of a $6.7B 'grant'. In case you didn't know, that 'grant' money is tax dollars taken from education, health care, and environmental services. Those "10,000 jobs in the construction phase alone." once again, are temporary. This cracker plant is expected to provide less than 200 permanent jobs in PA.
Lie #4: "Through Act 13, Gov. Tom Corbett and the Legislature not only have enhanced environmental protection standards, but also put in place a per-well impact fee, with an initial distribution of $204 million to Pennsylvania municipalities and commonwealth agencies."
Fact: Built in to Act 13 is the provision that the DEP must grant a waiver to set-backs established in Act 13, should an operator request it, rendering the set-backs meaningless. Also, they forgot to mention that the $204M to PA municipalities has a $500K cap on it, and does not amount to a drop in the bucket compared to the billions the state is losing annually by not having a, severance tax LIKE EVERY OTHER OIL AND GAS PRODUCING STATE DOES.
Lie #5: "Every Pennsylvanian is already benefiting from Marcellus Shale."
Fact: Except those who are living in the drilling areas and have to contend with contaminated water, reduction in air quality, noise and truck traffic 24/7, polarized communities, a drop in property values, disappearing farms, increase in violent crime, increase in fatal motor vehicle accidents, constant road construction, intrusion on private property by pipelines that wield the power of eminent domain, and then there are the spills, well-blow-outs, methane leaks, polluted creeks and streams, etc., etc., and everything else that goes along with the wholesale massive industrialization of rural PA. In Shale Country, PA, there is no longer a sense of community, trust in our state and local government, or sense of safety and security in our homes.
Sullivan County, PA
From: Patrick Henderson email@example.com
Mr. Trallo appears unconstrained by the same truth that he admonishes others, falsely, for skirting by offering false context, no context, or, when necessary, bald-faced lies to refute the below opinion piece.
1) The Marcellus, by any measure, contains some of the largest unconventional shale wells in the world. The "drop off" of some wells simply indicates how significant the initial output is - it does not dispel the notion that the wells are world-class production wells. Frankly, if they are not significant producers, drilling interest will go elsewhere.
2) 240,000 Pennsylvanians are employed in core and ancillary oil and gas industries, at wages on average $16,000 to $30,000 more than the average industrial wage in Pennsylvania. This does not include thousands of "induced" jobs - the restaurants, hospitality, service and other sectors that are supported or sustained by oil and gas industrial activity. To state all these jobs were here pre-Marcellus - or to state that only 10,000 of these jobs are held by PA residents - is simply an out-and-out falsehood.
3) Royal Dutch Shell received no grant from the Commonwealth, much less a $6.7 billion grant from PA taxpayers at the expense of other state funding priorities. It is simply, 100% false. Period. Second, it is doubtful that the 10,000 construction workers, employed for 3-4 years constructing a petrochemical and ethylene cracker facility, would agree with Mr. Trallo's characterization. And finally, Mr. Trallo's estimates on full time jobs are entirely inaccurate - the on-site facility is expected to have several hundred jobs, and the ancillary and induced new jobs supported from the feedstock produced from such a facility are estimated to be nearly 15,000 or more full time jobs.
4) Mr. Trallo's characterization of setback waivers is inaccurate. A waiver is not granted if an operator simply requests it; it is only granted if it is demonstrated that doing so will not impact or harm the waters of the Commonwealth. Waiver provisions have been in place since 1984 and again are only granted provided there is no negative environmental impact. Moreover, by dwelling on one provision of Act 13 (and misrepresenting that to boot), Mr. Trallo fails to acknowledge other environmental enhancements: increased well bonding, increased setbacks, enhanced penalties, water management plan requirement, water reuse plan requirement, protections in floodways, secondary containment requirements for chemicals and other materials, etc. etc.
With respect to the impact fee, Mr. Trallo is again wrong. Municipal allocations are capped at the GREATER of $500,000 or 50% of their municipal budget, whichever is greater. If he wishes to criticize providing a municipality with up to 50% more revenue than they previously had, so be it. Most see those limitations as more than generous. Additionally, while Mr. Trallo notes PA does not have a "severance" tax - but it does have an impact fee - he fails to acknowledge that PA does have a corporate, personal, capitol stock and franchise, sales and use, liquid fuels and other taxes which added $420 million to the state's coffers last year.
From: John Trallo
First of all, I appreciate you responding.
Second, I'm not "offering false context, no context, or, when necessary, bald-faced lies to refute the below opinion piece."
To make that point, the figures I got for the drop-off rate are from the US Department of Energy, and the employment statistics are from the Pennsylvania Statewide Marcellus Shale Workforce Needs Assessment, conducted by: Marcellus Shale Education & Training Center (MSETC) a collaboration of Pennsylvania College of Technology [see page 21] and the Penn State Extension. (both documents are attached)
For the Royal Dutch Shell cracker plant, I quote from the Alpern Rosenthal Accounting Firm press release: "Pennsylvania Governor Tom Corbett bundled various tax breaks along with the expansion of the Keystone Opportunity Zone program." For those who are not educated on the KOZ program, this is a quote from the PA Dept. of Community and Economic Development: Keystone Opportunity Zones are such a breakthrough idea that Business Facilities magazine calls them the number one economic development strategy in the nation. By eliminating specific state and local taxes within specific underdeveloped and underutilized areas, communities within Pennsylvania are experiencing economic growth and investment.
Now, Mr. Henderson, you can call it 'tax breaks', or 'tax incentives', whatever you choose to call it, it means that the people of PA will be picking up the tab for the tax. Tax not paid, is negative revenue. And the $6.7B cap was removed in the last minutes before Act 13 was voted on. Also, if the waiver provisions have been in place, why did they have to reiterated in Act 13, and what percentage of the DEP permits and waivers have been denied?
As for the impact fee, aside from short changing municipalities... compared to an severance tax, it lets the industry off-the-hook for any negative impact to our infrastructure. Especially with a ridiculous $6K p/mile road bond. According to PennDOT, the cost to resurface one mile of road is approximately $1M. Last year, Williamsport was touted as the "third fastest growing city in America thanks to Marcellus". This year, after their receiving their impact fee distribution, the city is $2M in the red. Are you sure we can afford that kind of "growth"?
Now, I know Gov. Corbett took the Norquist "no tax" pledge, or as any reasonable person would see it, a pledge not to learn, or alter the course regardless of changing circumstances. You're correct, PA does have a corporate, personal, capitol stock and franchise, sales and use, liquid fuels and other taxes which added $420 million to the state's coffers last year. Now, my question to you is, how does that corporate tax work with most, if not all, of these companies registered in Delaware? It should also be noted, that the PA wage tax that is deducted from out-of-state workers is returned 100% when they file in their home state, and most of the ones I know aren't paying any sales tax on tools, work clothes, equipment, etc., since they are work related and exempt from sales tax.
So, putting your game of political semantics aside, I stand by my statements, and have provided documentation to support them. So, if you disagree with the US/DOE, the MSETC, and PennDOT, please provide the documentation to support your position. But then again, you don't have to, since you admitted the article I refuted was nothing more than an "opinion piece". Last time I checked, an "opinion" is not a fact.
Yes, I am sending my response, along with the supporting documentation to the press.
John TralloSullivan County, PA
PS: Please explain how "Every Pennsylvanian is already benefiting from Marcellus Shale", since you did not address my comments on that issue. If you can't explain it, just offer your "opinion", or perhaps Mr. Krancer would like to offer his.