Wednesday, October 27, 2010

Will we allow the gas industry reclaim the title of "51st Senator" in Pennsylvania?

Media Room/Penn Future Facts

The 51st Senator

Jan Jarrett - Penn Future

The tale is told of the Senate session of the Pennsylvania legislature in the 1870s that was ended with these words, "The Pennsylvania Railroad, having no more business to come before this chamber, we stand adjourned."

Between the 1870s and the 1930s the Pennsylvania Railroad so dominated Pennsylvania politics that the press dubbed its lobbyist, "the 51st Senator." The industrial triumvirate of the Pennsy, Standard Oil, and Carnegie Steel worked hand in hand with Republican Party bosses to dictate policies, bend law enforcement to their own purposes and shape the Commonwealth's society and culture. Simon Cameron, the first of the powerful Republican bosses, brokered the sale of the state-owned and taxpayer-funded canal system to the Pennsylvania Railroad for less than what it cost to build it, and won an exemption from taxes for the railroads.

Fortunately, those days are behind us. Or are they?

Over the past two years, the people of Pennsylvania and their elected officials have begun to comprehend what multinational energy companies already knew -- the enormous potential of the Marcellus Shale gas deposit that underlies all or part of 34 Pennsylvania counties, 2/3 of the state. The total gas resource below our feet may be the largest and richest in the world, and it is located in the heart of one of the largest markets for natural gas.

This rich resource will be exploited by large and powerful energy companies including Shell Oil and ExxonMobil, a direct descendent of Standard Oil. There are at least 43 energy companies actively drilling in the Marcellus Shale. Collectively, they now have more than 25 percent of all Pennsylvania acres under lease for gas drilling

As this industry grows rich off of our resource, it will profoundly change Pennsylvania's landscape, its communities, its economy and its politics. Pennsylvania will emerge as an international leader in energy production, and natural gas production will come to dominate our economy. As the scale of drilling increases, our landscape and communities will undergo industrialization that will challenge environmental regulators and local infrastructure. Once quiet, rural towns will burgeon with new commercial and residential development, which will generate demands for local government services that these communities are currently incapable of providing.

And the shape of Pennsylvania's political power structure may revert to that of the 19th and early 20th centuries when the Robber Barons held unchallenged sway. We just got a preview of what that could look like during the debate over levying a severance tax on natural gas extraction –- and it's a picture that Simon Cameron would recognize.

The Commonwealth has already leased to the gas drillers 1/2 of the state forestland that lies above the Marcellus deposit. And the state Senate's failure to act on two severance tax proposals –- one passed by the House and another substantial compromise put forth by the governor –- has effectively exempted them from paying a severance tax, which they pay everywhere else they operate.

The industry has intimidating financial resources, and it has demonstrated that it is willing to deploy those resources to achieve its policy goals. Unfortunately, Pennsylvania's lack of any limits on campaign contributions allows the drillers unfettered ability to intervene in our electoral politics. Individuals associated with the gas industry can and have written checks exceeding $100,000 to individual candidates for office. The industry as a whole has sprinkled more than $3 million in campaign contributions across Pennsylvania's political landscape over the past several years. They bolstered those donations with more than $5 million in spending on lobbying.

The effort to levy a severance tax this legislative session foundered on the rocks of stone cold resistance from Senate Republican leadership who would not engage in substantive negotiations over the tax rate and structure. They spurned all attempts at compromise, concocted legalistic excuses for inaction and ran out the clock.

Pennsylvania desperately needs sane limits on campaign contributions, or the gas industry will reclaim the 51st seat in the Senate, and dictate policy and shape the future of the Commonwealth for its own profit.

1 comment:

Anonymous said...

Thanks for Posting Karen.

We all should LEARN from history, rather than repeating again, and again and again, the mistakes of the past.

Christian N. DeVol
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