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Gov. Wolf’s Demented Second Budget

Marcellus Pipelines - Jim Willis reportsJim Willis
Editor & Publisher, Marcellus Drilling News (MDN)

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Pennsylvania’s Governor Tom Wolf, who cannot even get his first budget passed, just proposed a demented second budget with an even higher severance tax!

Someone needs to bring out a straight jacket for PA Gov. Tom Wolf. He’s gone stark…raving…mad. He’s not only a danger to himself; he’s a danger to all of Pennsylvania. The only thing missing from yesterday’s budget address in Harrisburg was frothing at the mouth. In his mean-spirited budget address, Wolf insulted nearly everyone present, blaming everyone but himself for the budget disaster of last year.

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Energy Politics Are Fueling the Presidential Race

severance tax - MarkindDaniel B. Markind, Esq.
Weir and Partners, LLP

 

Taxes are high, gas prices are low and energy politics are clearly driving the polls; Americans are looking to for fresh new ideas not career politicians.

Today is the New Hampshire Primary, the traditional first-in-the-nation presidential contest.  A year ago, it would have been hard to imagine Donald Trump, with no political experience, and Bernie Sanders, who wasn’t even a Democrat until last year, leading in the polls.  If one thing is clear from the early stages, however, it’s that Americans of all stripes are shouting “No!” to any establishment candidates.

To understand why people are so cynical, one only needs to look at energy politics, with a focus on Ground Zero of the Marcellus Basin, Pennsylvania.

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Wolf’s Methane Emissions Plan Will Kill Marcellus Drilling

Marcellus Pipelines - Jim Willis reportsJim Willis
Editor & Publisher, Marcellus Drilling News (MDN)

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Governor Tom Wolf, along with some of his radical friends, wants to cripple the natural gas industry with new methane emissions regulations.

As we predicted yesterday, Pennsylvania Gov. Tom Wolf released a new plan that purportedly targets methane emissions from oil and gas operations in a vain attempt to help ole Mom Earth with her global warming problem. What we didn’t know is just how onerous and ludicrous his plan would be. Yesterday, Wolf and his sidekick the PennFuture Secretary of the Dept. of Environmental Protection (DEP), John Quigley, released a four-point plan (click here to view) to supposedly reduce methane emissions by 40% over the next five years.

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Shale Revolution Creates Shale Turmoil in 2015

severance tax - MarkindDaniel B. Markind, Esq.
Weir and Partners, LLP

 

It’s been a rough year for shale gas business; the shale revolution turned into shale turmoil but this is the nature of commodity businesses and will change.

If 1929 was the year of the great Stock Market Crash, 2015 will go down as the year of the great energy price crash. In January, natural gas prices at Leidy Hub in Northeast Pennsylvania hit $2.50/Mcf.  By December they hovered around $1.00/Mcf.  Despite the price drop, Marcellus and Utica well production rose in 2015 over 2014.

Add to this the warm winter weather and you had a perfect storm for Marcellus and Utica companies, from producers to water and sand haulers, environmental companies, freight transporters and the like.  The result was numerous bankruptcies; massive capital projects cutbacks and hard times all around.

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A Great Explanation of the Severance Tax

German Renewables - Tom Shepstone ReviewsTom Shepstone
Shepstone Management Company, Inc.

 

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David Madeira gives a very accurate explanation of Governor Wolf’s proposed severance tax on the natural gas industry in speaking with a caller on his show. 

Our good friend David Madeira has a popular radio show on 94.3 FM The Talker, called The David Madeira Show. This past week he did a phenomenal job explaining how the state’s proposed severance tax will really work when he received a call from “Herb from Harrisburg.”

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Government Incompetence Threatens Natural Gas Benefits

severance tax - MarkindDaniel B. Markind, Esq.
Weir and Partners, LLP

 

There seems to be no end to the demonstrations of government incompetence that keep threatening the natural gas benefits to the economy and the environment.

Despite reports Pennsylvania politicians had reached a budget agreement, Governor Tom Wolf and the Republican-controlled State Legislature failed to ink the deal. Both sides promised they would finish by Thanksgiving, only five months late. They did not. The Governor’s insistence on a state mineral extraction tax, once the centerpiece of any agreement, seems to have been beaten back, but don’t bet on it. Many Democratic lawmakers have great difficulty agreeing on increasing that state sales tax, to be paid by all, while they fail to enact a promised mineral extraction tax.

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Yemen Storms Threaten New England Shores

severance tax - MarkindDaniel B. Markind, Esq.
Weir and Partners, LLP

 

New England faces another tough winter and with a lack of pipeline infrastructure and the storms in Yemen; they will be forced to pay even higher natural gas prices this year.

Tropical Cyclone Chapala hit the Middle Eastern country of Yemen today.  A cyclone in that part of the world is so rare it is likely to drop a decade’s worth of rain on this Arabian Desert country in days.  Yemen averages 2 to 3 inches of rain per year.  Chapala is likely to produce 20 inches.

Thanks to our lack of pipeline infrastructure, Boston and much of New England get a substantial portion of their natural gas shipped in from Yemen, halfway across the globe.  That country currently is in the middle of a civil war and is totally unstable.  With much of Yemen now under water, expect New Englanders, who already pay four to eight times as much for natural gas as others in the Northeast, to face even higher prices and tighter supply this winter.

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The Energy Dilemma: Incoherent Government

severance tax - MarkindDaniel B. Markind, Esq.
Weir and Partners, LLP

 

Incoherent government is creating an energy dilemma everywhere we look; New York, Pennsylvania and internationally. Happily, shale succeeds in spite of it.

Over 110 days after the legally-mandated “deadline” for approving a new State budget, the pressure is building on Pennsylvania’s legislature and Governor finally to get serious and stop the gamesmanship. Schools, foster care facilities and many other state agencies and programs are running out of money. Many are seeking short-term loans to get by, but others are not easily financeable.

Meanwhile, Governor Tom Wolf and the Republican-dominated legislature continue to play chicken over the mineral extraction tax issue. While the proposed extraction tax is not the only contentious issue (privatization of state liquor stores and pension reform being among the others), the tax has been the public focal point. As so often happens, each sides’ absolutist position likely will wilt as more state institutions, teachers, contractors and others don’t get paid. Sadly, real discussion on the issues could have been handled months ago. Unfortunately, a neophyte Governor and a recalcitrant legislature have shown little ability to work for the betterment of the State.  Let’s hope that changes as the winter approaches.

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Scranton Newspaper: PA Should Pay Higher Severance Tax

NED Pipeline - Jim Willis reports

Jim Willis
Editor & Publisher, Marcellus Drilling News (MDN)

 

The Scranton Times-Tribune believes PA should cooperate on a higher natural gas tax and support Gov. Tom Wolf’s plan to impose a severance tax.

We wonder, do the liberal editors of the Democrat propaganda machine known as the Scranton Times-Tribune consider it “fair” to close down legitimate businesses that provide jobs and tax revenue to the state by targeting them with even higher taxes, forcing them out of business because they no longer turn a profit? Is “profit” a bad word around the news room of the Times-Tribune? Is the word “capitalism” banned from so-called reporters’ lips at the Times-Tribune?

Those are the kinds of thoughts that roll around our brain box when we read yet another sycophantic “we need to tax the Marcellus industry more than we do already” editorial from the brainiacs at the Times-Tribune.

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Is Tom Wolf Trying to Kill the Gas Industry?

severance tax - MarkindDaniel B. Markind, Esq.
Weir and Partners, LLP

 

The incompetency of ideology is on full display with Pennsylvania Governor Tom Wolf – is the man trying to destroy the gas industry? It can’t be ruled out.

Ten months after he was inaugurated and three months after the deadline for final enactment of a new State budget expired, Pennsylvania Governor Tom Wolf finally unveiled his new tax proposal.  The Governor, who campaigned on enacting a 5% mineral extraction tax to fund education in the State, had unofficially floated adding on top of that a fee of $.047/1,000 cubic feet of gas produced at a minimum price of $2.97/Mcf, regardless of the actual sales price.  To placate local communities who would lose their guaranteed assessment under the prior local impact fee system, the Governor floated a guaranteed amount to municipalities.

When Governor Wolf finally introduced a tax plan, he actually proposed a 3.5% mineral extraction tax plus a fee of $.047/1,000 cubic feet of gas produced with no minimum price but with this tax layered on top of the current local impact fee.

The Governor made his proposal only after Pennsylvania State Legislative leaders promised him an up or down vote on the budget.  He got it.  He lost.  Badly.

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