Stories keep rolling in about the booming economy in a faraway land: jobs, new construction, booked hotels, and long vacant office space now at capacity. And the influx of foreign capital continues to increase. The result? A climate so healthy that taxes haven’t risen in eight years.
Something this good must be seen firsthand.
So as my trip was being arranged, I was asked the duration of my flight to China, and how long I’d be away. As to the second question, the same day.
I can’t answer the first, because it’s based on a false assumption. I was, most definitely, not going to China, but had a mere three hour drive to behold the only thing that can bring Pennsylvania, and maybe the nation, back from the abyss.
It was time to meet Marcellus Shale.
Pop quiz. Which is true?
- Bon jour, monsieur. I present to you Marcellus Shale, ze best French wine this side of ze Seine;
- Behold Marcellus Shale, the new Philadelphia 76er who might help the NBA team win more than 10 games;
- Welcome to the Marcellus Shale, one of the largest natural gas fields in the world, centered in Pennsylvania, whose liquid gold is conservatively valued in the hundreds of billions.
Unfortunately for vinophiles and the impotent Sixers, the answer is 3.
But it almost didn’t happen. If lame duck Gov. Ed Rendell had his way, the Shale industry would have died before ever getting off the ground.
He wanted to impose a severance (extraction) tax on natural gas, as high as 10 percent. Rendell’s rationale?
Oil companies needed to pay their fair share.
Thankfully, Gov.-elect Tom Corbett, with his "No new tax" promise, trounced Rendell protégé Dan Onorato in the election.
In doing so, he slammed the door on the catastrophic failure forever known as the Rendell legacy, and opened a portal to opportunity not seen for generations.
Corbett innately understood two things lost on Rendell. First, if you want less of something, tax it. Second, you can’t tax your way out of a recession and into prosperity. But what about the “fair share” that the industry allegedly doesn’t pay?
Political theatre, shamelessly orchestrated to close the $5 billion budget deficit created by the reckless former governor.
Pennsylvania companies are saddled with the second highest corporate net income tax (CNI) in the nation (10 percent), an onerous capital stock and franchise tax, the country’s most hostile legal system, and the world’s second-highest national corporate income tax rate (40 percent).
So much for fair share.
And what is the industry giving back?
Hope, optimism and a really big torch — one bright enough to rekindle the flame that lights the way to a better tomorrow.
Energy independence is the first step to resurrecting our shattered manufacturing base. And with 500 trillion cubic feet of natural gas in the Marcellus Shale, enough to power the gas needs of our nation for decades, hundreds of thousands of jobs will result from Shale operations in Pennsylvania alone. I saw that first-hand.
Not far from Williamsport (of Little League World Series fame) in Lycoming County stands Montgomery, a once proud manufacturing town but which had since fallen on hard times.
Shells of long abandoned factories and drug-infested subsidized housing became the landscape, with zero job prospects and no future.
That was, until the secret of the shale surfaced. Literally.
Now, Montgomery has become a living symbol for the prosperity ahead.
On this day, ground was broken on an old mill site. The new occupants, PEAK Energy and Newalta, made a commitment for the long haul. And with them will come more drilling infrastructure, logistics, personnel — and tax revenue.
Revenue that will fill coffers as workers are employed, houses are bought rather than foreclosed upon, and an entire support industry grows around Shale businesses. (Which is why Lycoming hasn’t raised taxes in eight years).
I had the chance to speak with the project’s developer, John Moran, president of Moran Industries and one of the leading businessmen advocating environmentally-sound gas extraction.
He said that the only way to be competitive again is to wean the nation off volatile foreign oil, and instead develop our vast domestic resources, starting with the Marcellus Shale.
Spoken from a man of experience, given that each truck in his logistics fleet was drinking $1,000 of diesel fuel every 36 hours during the 2008 oil spike crisis.
“Domestic gas production helps free us from our enemies while allowing us to compete with cheap labor overseas . . . it lowers the cost of business because of cheap energy. Pennsylvania is a snapshot of what America can be if it ever decides to truly pursue energy independence,” he added.
He couldn’t be more correct.
First in an ongoing series examining all aspects of developing the Marcellus Shale.
Chris Freind is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.freindlyfirezone.com
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