by Randy Shannon
click this link for campaign finance report or go to end of story: http://www.campaignfinance.state.pa.us/CFReport.aspx?CFReportID=73134&Section=III
Fight against state tax on gas extraction gets expensive
In the last two years, energy companies with a stake in Pennsylvania’s Marcellus shale have spent hundreds of thousands of dollars lobbying and making campaign contributions to legislators, congressmen and the governor, partly in hopes of postponing a tax on the extraction of natural gas.
They also are laying the groundwork for future political battles. Range Resources Energy Independence PAC, for example, donated $5,000 each to Republican Attorney General Tom Corbett and to Democratic Allegheny County Executive Dan Onorato, both gubernatorial candidates, in the waning months of 2009.
Range Resources, with drilling rights to more than 1.4 million acres, is one of the biggest natural gas players in Pennsylvania, and is one of the most frequent campaign contributors as well. The company’s political arm gave to state Rep. Mike Turzai, R-Bradford Woods; Sen. John Rafferty, R-Montgomery; Sen. Joe Scarnati, R-Jefferson; Sen. Jake Corman, R-Centre; and Auditor General Jack Wagner, among others, in 2009. In turn, the biggest donors to the Range PAC are its top executives, such as Charles Blackburn (board of directors), John Pinkerton (CEO), Rodney Waller (chief of compliance) and Roger Manny (executive vice president).
Why all the cash? Energy companies view the Marcellus shale field, much of which is in Pennsylvania, as the next big natural gas bonanza, and have spent the past two years positioning themselves for the day when natural gas prices increase, making it a more profitable enterprise.
And the enterprise will remain more profitable so long as the Legislature and the governor are unable, or unwilling, to impose a tax on the extraction of gas.
The so-called “severance tax” was in the news again last week, as Gov. Ed Rendell announced the leasing of 32,000 acres of state forest land for drilling purposes, netting the state’s general fund $128 million. Five companies — Chesapeake Energy Corp. of Oklahoma City, Exco Resources of Dallas, Seneca Resources Corp. of Houston, Anadarko Petroleum Corp. of Houston, and Penn Virginia Corp. of Radnor, Pa. — submitted the highest bids.
After announcing the lease agreement, Mr. Rendell said he’d try again, in his 2010-11 budget proposal, to impose a severance tax, something in place in 28 other states. “It’s hard for the industry to cry poor mouth. Exxon just paid a high price to buy a [natural] gas company,” he said.
He said on Friday that an extraction tax could raise $100 million a year for the state.
Energy companies want to postpone or fight off the tax, citing a glut of natural gas in storage (which depresses prices), and the fact that companies already must pay an up-front lease price, as well as continued royalties, to landowners.
But the companies’ concerns go beyond the extraction tax.
“It’s all about education,” said Matt Pitzarella, spokesman for Range Resources. “While the industry has been in Pennsylvania for 150 years, modern natural gas development is very new. … At the end of the day, we have to do all that we can to ensure that [we] maximize this opportunity for the entire commonwealth, [and] take the steps to support the responsible growth of this industry.”
The PAC for Chesapeake Energy Corp. — which is the largest gas lessee in Pennsylvania — also appears frequently in the Department of State’s campaign finances records. It has contributed to Rep. Marc Gergely, D-White Oak; Rep. Dave Reed, R-Indiana; Mr. Scarnati, Mr. Corman, Mr. Onorato and Mr. Corbett, among others.
• Anadarko, one of last week’s winning bidders, made several contributions in 2008, including a $500 contribution to Sen. John Wozniak, D-Johnstown.
• UGI PAC is the political arm of UGI Corp., an oil and gas firm out of Reading, Pa. The PAC has contributed to House Speaker Keith McCall, D-Carbon; Rep. Jeff Pyle, R-Armstrong; Rep. Joe Preston, D-East Liberty; Mr. Turzai and many more.
• Exco Resources (another of last week’s winning bidders) committed $500 to Sen. Don White, R-Indiana; $500 to Mr. Corman, and $500 to Mr. Scarnati, among several others.
• Cabot Oil & Gas is the third-largest drilling lease-holder in the state, behind Range and Chesapeake. Cabot and its executives have given to Mr. Scarnati.
• Spectra Energy, a Houston company with a presence in Washington County, has given $1,500 each to the Democratic state senate campaign committee and its Republican counterpart, and the same amount to the House Democrats’ and House Republicans’ campaigns.
• Cecil Township’s CNX Gas, a division of Consol Energy, leases about 40,000 acres. Its political action group — which is combined with Consol’s, called the Consol Energy Inc. & CNX Gas Corp. PAC — has given $2,500 to Mr. White, $1,000 to Mr. Corbett, $1,000 to Mr. Rendell, $1,000 to Sen. John Pippy, R-Moon, and thousands more since 2008.
Direct campaign contributions are separate from lobbying expenses, which the state also tracks. Range, for example, reported spending $70,600 in “direct communications” with lawmakers in the third quarter of 2009, $65,000 in the second quarter, and $90,000 in the January through March quarter. (Fourth-quarter lobbying expenditures haven’t been filed yet.)
Chesapeake Appalachia spent $76,000 in the third quarter of 2009, $79,000 in the second quarter and $48,000 in the first.
Lobbying and umbrella trade groups — such as the Independent Oil & Gas Association, the National Fuel and Gas Association — also make direct campaign contributions.
Individually, none of the energy and gas companies give enough to rank among the top contributors in the state, and collectively, they are still well short of the largest donors, such as PACE, the Pennsylvania State Education Association’s political arm.
Campaign Finance Report
Statement of Expenditures
|Filer Number and Name||Report Cycle||Type of Report|
|2009350 – Range Resources Energy Independence PAC||2009 Cycle 6||30-Day Post-Election|
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