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Friday, April 10, 2009

Natural Gas Lease Falls Through - PA Loses $31 Million in Revenue (and Jobs)

The AP is reporting that a natural gas firm, previously agreeing to pay $31 million for a lease of lands in the Marcellus Shale formation, has backed out of the deal. 

The state claims it doesn't know why the firm backed down, though the article cites both a drop in natural gas prices since the lease was signed, and notes Governor Rendell's proposed 5% severance tax on natural gas extraction - which will certainly discourage investment in the industry if enacted.

This will certainly impact the state budget, as Rendell has planned to use the lease revenues to fill this year's budget gap, and wants the severance tax to fund next year's spending increase.  Of course, it will also have an economic impact - jobs that would have been added has the firm set up shop in Pennsylvania - but Rendell's press releases only report, "jobs created" not jobs destroyed by his taxes and fees.


karlub said...

Good, maybe. It'll force Rendell to ratchet down his shell-game BS with the budget, and we now have a savings account in the ground for the pension bomb.

Anonymous said...

When are people going to learn.  No buddy wants to work for nothing by ;paying money to the state so the state can pursue their social agendas. Also the consumer who voted for rendel to screw the business owner is screwing themselves.  We need cheaper leases to encourage gas dilling to keep home heating bills down.  IN a democracy....to stupid prevail.fed up PA citizen.