Marcellus Shale Is Not An NBA Player

It’s the key to Pennsylvania’s future. (And thank God Ed Rendell wasn’t able to kill it.)

Stories keep rolling in about the booming economy in a faraway land.

Tales of jobs, new construction on every corner, more jobs, hotels booked for a year, office space — long vacant — now renting for the highest prices ever fetched, and even more jobs. Yet despite years of growth, the influx of foreign capital hasn’t subsided, but in fact, continues to exponentially increase. Combined, all these things have created a climate so healthy that taxes haven’t risen in eight years. As with Doubting Thomas, something this good must be seen to be believed.

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. [SIGNUP]

Although solid growth and low taxes are now virtually nonexistent in this country, I had a mere three hour drive to behold the only thing that can bring Pennsylvania — and maybe the nation — back from the edge of the abyss.

Time to get up front and personal. Time to meet Marcellus Shale.

*****

Pop quiz.

Which of the following is true:

A) Bon jour, monsieur. I present to you Marcellus Shale, ze best French wine this side of ze Seine River;

B) Meet Marcellus Shale, the new Philadelphia 76er who might help the NBA team win more than 10 games;

C) Welcome to the Marcellus Shale, one of the largest natural gas fields in the world, and centered in Pennsylvania, where 60 percent of the state sits atop the reserves, whose liquid gold is conservatively valued in the hundreds of billions.

Unfortunately for vinophiles and the impotent Sixers, the answer is C.

But unbelievably, there was almost an asterisk. If lame duck Pennsylvania Governor Ed Rendell and his protégé, failed gubernatorial candidate Dan Onorato, had their way, the Marcellus Shale industry would have died before ever getting off the ground. Those politicians wanted to impose a severance (extraction) tax on natural gas, as high as ten percent. Rendell’s rationale?

Oil companies needed to pay their fair share.

Thankfully, Governor-elect Tom Corbett, with a No-New-Tax promise being the cornerstone of his campaign, trounced Onorato. In doing so, he slammed the door shut on the catastrophic failure that will forever be known as the Rendell Legacy, and opened a portal to opportunity not seen in Pennsylvania for generations.

*****

Corbett and Onorato were like night and day on a number of issues, but none more important than how to proceed with the Marcellus Shale. A severance tax, especially the one proposed by Rendell/Onorato, would have undeniably been the death knell of what is a mobile industry.
While Pennsylvania is blessed with a sizable portion of the highly-profitable shale, our competitors are not far behind: West Virginia, Maryland, Ohio, New York and up into Maine and Canada. And Michigan, with the second highest unemployment rate in the nation, is making lucrative offers to the industry to extract Shale gas from beneath the Great Lakes.

In his attempt to make Pennsylvania competitive again — dare we say viable — Corbett innately understood two things that were 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? Pure election year theatre, orchestrated in a shameless attempt to close the $5 billion budget deficit created by the reckless former Governor.
The real story?

The natural gas companies in Pennsylvania, just like all other corporations, are saddled with the second highest corporate net income tax (CNI) in the nation (10 percent), along with an onerous capital stock and franchise tax and the country’s most hostile legal system. And this horrid picture doesn’t even include the world’s second-highest national corporate income tax rate (40 percent).

Put another way, the proposed severance tax and the CNI alone would have handicapped the industry from the get-go, imposing on them a massive 20 percent tax deficit out of the gate. And the result if the tax had passed? The industry would have simply rolled away from unprofitable pastures in Pennsylvania.

So much for fair share.

But now that it’s here, what is the industry giving back to the Keystone State?

Hope, optimism and a really big torch — one bright enough to rekindle the flame that lights the way to a better tomorrow. In doing so, our citizens may yet revive the once-undying faith that each successive generation will fare better than the one before it.

How? Simple. In addition to bolstering national security (by decreasing reliance on foreign oil and diminishing the threat of terrorist attack), energy independence is the first step to bringing back our manufacturing base. And with upwards of 500 trillion (that’s with a “t”) cubic feet of natural gas in the Marcellus Shale — enough to power the gas needs of our entire nation for decades — there are several hundred thousand jobs that will directly result from Shale operations in Pennsylvania alone.

I saw that first-hand on a sunny day in late November.

Not far from Williamsport (of Little League World Series fame) in Lycoming County stands Montgomery, a once proud manufacturing town where jobs were guaranteed, but which has since fallen on hard times. Shells of long abandoned factories, mills and drug-infested subsidized housing became the bleak landscape at every turn, with zero job prospects and no future.

That was, until the secret of the Shale surfaced. Literally.

Now, Montgomery is full of smiling faces once again, as it has become a living, breathing symbol for the prosperity ahead — so long as politicians and bureaucrats don’t muck a good thing.

On this day, ground was broken on a Shale-related building at the site of an old mill. The new occupants, PEAK Energy and Newalta, made a commitment for the long haul. And with them will come more and more drilling infrastructure, logistics, personnel — and tax revenue. Revenue that will fill the coffers of Montgomery, Lycoming County and the state, as workers are employed, houses are bought (rather than foreclosed upon), hotel rooms are booked, restaurants spring up, and an entire support industry grows around Shale businesses. (Which is why, because of the Shale, Lycoming County hasn’t raised taxes in eight years).

And the workers? Primarily Pennsylvanians.

As I witnessed the job-creating event — not exactly a common sight in this country — I had the chance to speak with the project’s developer, John Moran, president of Moran Industries and one of the leading businessmen advocating safe, environmentally-sound gas extraction in Pennsylvania.

He said that the only way to be competitive again is to wean the nation off foreign oil, with its volatile price fluctuations, and instead develop the vast natural energy resources available domestically, 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.

“I have lived and worked in Pennsylvania all my life, and never have I seen such an awesome opportunity. Responsibly harnessing the Marcellus Shale is the only thing capable of resurrecting our shattered manufacturing base and making us competitive again,” Moran told me.
A stodgy, aloof businessman John Moran is not. He gets down and dirty in his business, and his passion for the Shale allows him to explain its real value in a refreshingly simple and clear way. Politicians should take a lesson.

“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.

As we were parting ways, he summed it up this way: “Unimaginable amounts of gas under our feet, low cost energy, our manufacturing grows and jobs stay here, and the country is safer. Where’s the downside?”

The good news for John Moran is that if he ever decides to look for a new career, he would make a great columnist, as no one could have stated the importance of the Marcellus Shale any better.

Chris Freind is an independent columnist, television commentator, and investigative reporter who operates his own news bureau, www.FreindlyFireZone.com. Readers of his column, “Freindly Fire,” hail from six continents, thirty countries and all fifty states. His work has been referenced in numerous publications including The Wall Street Journal, National Review Online, foreign newspapers, and in Dick Morris’ recent bestseller “Catastrophe.” Freind, whose column appears nationally in Newsmax, also serves as a guest commentator on Philadelphia-area talk radio shows, and makes numerous other television and radio appearances, most notably on FOX. He can be reached at CF@FreindlyFireZone.com.

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  • Drill Baby Drill

    This Shale is beyond common sense! What are we waiting for? Btw, have you noticed gas is near $3.20/gallon, and the terrorists still wany us dead?

    Wake Up!

  • Condor Cuisinart

    All the leftist environmentalists have done for the last 35 years is make us more dependent on foriegn oil. They killed the nuclear energy. They killed offshort drilling. They killed drilling in ANWR, which would now be pumping 1 mil. barrels a day if Clinton hadn’t vetoed it. America’s energy needs cannot, and will not, be met by wind mills. We need domestic nuclear, oil drilling, and natural gas NOW.

  • PBOWENGARAGE

    Interesting thoughts from a part-time blogger

  • nick v

    so, if we passed that tax, all the marcellus shale work would leave PA to go to those other states……the ones that ALREADY HAVE the tax? and the other states taxes (except WV) are higher, so thats where the business will go? got it.

  • Hal

    Those of you in favor of “Fracking” which is what this is all about OBVIOUSLY DO NOT DEPEND ON A WELL FOR YOUR DRINKING WATER. The gas companies have laid waste to the aquifers everywhere that they have been permitted to “frack” the shale bed by injecting poisons and contaminated water into the earth to fracture the shale and extract the hydrocarbons….mostly methane. Their inability to control the gas once they have fractured the shale has led to explosions and “flammable drinking water” in property owners residential wells.

    Giving them a license to wreck our environment without pay a dime for the damage they do is JUST NUTS.

  • Mr. Fracker says

    Wrong Hal. Stop reading liberal talking points. The water table is 400 feet down.. The Shale is 5,000 to 10,000 feet below. Case closed.

  • Sgt. Ken Brown

    I’m not sure who’s a bigger tool, Governor-elect Corbett or Chris Feind — Freind “fails” to mention that Corbett took over $500,000 from the gas companies —
    Corbett is a corrupt tool before he even takes office. We, as residents, get to pay off the state’s deficit while we drink the water poisoned by the gas companies.

  • Mr. MyWaterIsPoisoned

    Mr. Fracker need to get educated about how fracking works, about how (and why) the EPA is not allowed to regulate fracking, and what has ALREADY happened to the water supplies around fracking sites in my home county of Wayne.

    Then “case closed” will be “case re-opened”…

    (And, it seems to me, to get something up from 5000′ you have to come past 400′ … I’m just sayin’)

  • Mr. MyWaterIsPoisoned

    “First, if you want less of something, tax it. Second, you can’t tax your way out of a recession and into prosperity.”

    Third, the US can’t drill it’s way to energy independence. If we took all the oil out of the ground that the US has, we would have a six month supply. That’s how fast we use oil in the US.
    I know that’s not the point of this article, but what it does touch upon is the “land grab” that is going on by energy companies under the guise of “independence” or “security”.
    It’s amazing how cheaply these energy companies can turn a governor-elect into their puppet. And, if Freind was a friend of PA residents, and a real journlist, he might have mentioned the money Corbett took from the energy companies. No, Freind is a member of the corporate media, bought and sold. He likes that you can’t differentiate between “opinion” and “fact”.

  • Mo Moroney

    Chris,

    Just out of curiosity did you get beat up by any teenagers on this trip? Or is that exclusively at the Jersy shore?

  • macman2

    Gee, how much did the industry pay you to make such fawning comments? Yes, we will get natural gas and wonder why no one can buy it because they are dead or poisoned sick from eau de frack. My friends in Williamsport find fracking a diaster.

  • Pete

    A. It’s oenophile, not vinophile.

    B. Saying Marcellus Shale is not an NBA player, while kinda funny, does expose your racist, cracker tendencies.

    C. As I wondered during the leadup to the election, in addition to being on Corbett’s payroll, are you now also in the pocket of the natural gas industry? This practically reads like one of the radio advertisments they’re running…

  • Ken

    I see the lefties that have posted on this page have checked off all of the boxes – racist, terrorists still want to kill us, evil natural gas companies want to kill everyone, evil natual gas corporations don’t want to pay “their fair share” (which is never defined, of course), we can’t drill our way to energy independence so why do it at all? God forbid that some people that were previously of modest means now have a life that they never would have experienced had the gas not been extracted. But, I guess living in slums without hope is A-OK according to the Left. Only the enlightened people deserve wealth, preferably those in government. You bitter clingers can eat the crumbs that we allow you to have.

    No wonder this country is a mess right now.

  • Phillyboy

    Chris, there is a difference between crude oil and natural gas. I wonder how long it will be before we are importing drinking water?

  • Methane Man

    Blah, blah blah. So there may be some methane in our drinking water. That’s never been proven to be bad. And you could be a real hit at a party.

    If only the methane complaint was true. But it’s not. Stop the hype, haters.

  • Emily W.

    Pennsylvania would be foolish NOT to impose a severance tax on gas extractors. Unlike other gas and oil producing states, Pennsylvania has given away its resources as if they are never ending: timber, coal, oil, and now gas. It’s downright stupid not to have a severance tax, or resource tax, to help undo any damage caused by the gas rush. If this is the big bonanza, do you really think the drillers will pass it up on account of a tax they pay in most every other gas or oil producing state?

    See this link for a chart of resource taxes by state:
    http://www.ncsl.org/default.aspx?tabid=12625

  • Stop the gas lies

    Philly Boy- Who cares? What’s your point, moron? Oil and natural gas extraction is different, sure, but often by the same companies.

    Nick V.- What’s your point, idiot boy? If PA taxes gas extraction so high, the companies that are here will leave. And no new investment will come into the state. As Freind said, you can’t tax your way into prosperity.

  • Bob Assidy

    Chris,

    Is it true that you passed out and crapped your pants at a recent family wedding?

  • Terry Stevens

    GASLAND!!!!!!

  • nick v

    @ Stop the gas lies
    you call me “idiot boy” for pointing out some facts relevant to the discussion. really? no, seriously, really? and you think anyone would possibly listen to anything you have to say? sad.