The People of America's Oil and Natural Gas Indusry

PA Governor Holds Energy Jobs Hostage

Jane Van Ryan

Jane Van Ryan
Posted October 27, 2010

Pennsylvania Governor Ed Rendell yesterday signed an executive order halting natural gas development on state lands. In a statement, he said the ban was needed "to protect our un-leased public lands from this [drilling] rush." But many believe the executive order was driven by politics, not environmental protection.

Under the state budget plan, Rendell had an agreement with Pennsylvania lawmakers to pass a natural gas extraction tax, also called a severance tax, before they adjourned for the Nov. 2 elections. The state House of Representatives passed the measure in September, but the Senate did not act on the bill. Rendell signed the order a few days after admitting the tax "is dead this year."


"Holding hostage important natural gas development and the creation of new jobs and revenues over a political impasse is not sound energy policy," said Rolf Hanson, executive director of the Associated Petroleum Industries of Pennsylvania. "The Keystone state continues to struggle with high unemployment and budget deficits, and natural gas is part of the solution to the state's economic problems."

Pennsylvania sits on top of the Marcellus Shale formation, which is one of the largest natural gas fields in the world. Penn State University estimates natural gas development of this resource could generate $13.5 billion in value-added economic output and nearly 175,000 jobs in 2010. Furthermore, Pennsylvanians recognize the benefits of natural gas development. In a recent Harris Interactive poll, six in 10 Pennsylvania voters opposed higher taxes on the U.S. oil and natural gas industry.

As blogger Bob McCarty points out, Rendell's order could sabotage jobs, reduce state revenues from natural gas development, and harm U.S. energy security by ignoring the "real potential that lies in the safe and steady development of clean-burning natural gas in Pennsylvania's portion of the Marcellus Shale."

"We need to put politics aside and do what's right for Pennsylvanians, " Rolf said. "That means allowing the Marcellus Shale to unleash the forces that will create thousands of new jobs in the state."