Life in Northeast Pennsylvania and the land on which we've built our home and family have a firm grip on our generations.
My son Trevor recently wrote this article, which was published in the Pittsburgh Post-Gazette, in response to editor Dan Simpson's article "Fracking Compromises the Future of Pennsylvania." I have reprinted a portion of the article here because it offers a contrasting view to much of the media coverage about the Marcellus . . . and because family and home are a legacy worth cultivating.
by
Trevor Walczak
Vice-President, National Association of Royalty Owners – Pennsylvania
The Marcellus Opportunity
I am from coal country. The hard coal region of Pennsylvania. My family’s immigrant
patriarchs all spent their early working years carving out a living in the
mines throughout the first half of the twentieth century. While the mines were
cold, dark, and dangerous, they were the means to give these new immigrant families
a better life. When they had enough money saved to buy their freedom, they did.
Freedom for my dad’s
family was a plot of farmland in what we now call Marcellus country, far from the colliery
spoils, mine fires, and acid mine drainage. As a kid traveling into town, I
remember seeing those still recent scars, which were a stark contrast to the
natural beauty to which I’ve grown accustomed. But that’s what those scars are
for me: a reminder of the blood and sweat, paid forward, to give a better,
cleaner chance at life for my young family and me.
While coal and gas are
both natural resources which fueled an economic transformation, a key distinction in legacy will be found
in mineral ownership. Coal companies typically owned the land where they mined,
while the Marcellus is owned by hundreds of thousands of Pennsylvanians who
have built their lives for generations on top of its hidden treasure. These
farmers, sportsmen, and conservationists have invested in their land for
generations out of love for the lifestyle without knowledge of the coming
energy boom.
The Marcellus has
already been good to these property owners. By the spring of 2013, the
Associated Press estimated that over $1.2 billion had been paid to Pennsylvania
mineral owners in the form of royalties. Where I come from, this money is
saving the family farms from previous foreclosure threats, keeping properties
from being subdivided, saving us all from the associated effects of urban
sprawl, and, overall, making a hard way of life a little easier. Royalty owners
are using this money and investing it in our kids, in better farming and forestry practices,
as well as into the communities through support of local businesses, and into
the state through personal income taxes.
We are not seeing farms abandoned in exchange for tropical
islands. I see new tractors, new roofs on barns, and charitable donations.
Dan Simpson, a writer
for the Pittsburgh Post-Gazette,
recently referred in his editorial to this phenomenon as an “El Dorado of
unearned wealth,” a phrase I fundamentally reject, and I believe that perversion
of the debate is meant to sow envy, which only further marginalizes the
minority which shares that view. Many of us have endured multi-generational
financial struggles to simply hang on to our most valuable asset: our property.
Out here in Marcellus country, our land
often defines us and our chosen lifestyle. Unconventional shale gas
reservoirs are our property. When you look out your window at those “scenic
views,” remember someone actually owns them, and there’s a story behind why
they exist. Our land is not just a backdrop to your commute.
Inevitably, it is the
owners of the Marcellus who are on the front lines of energy
independence. This development is taking place on our land, and I have yet
to meet anyone who will stand complicit with any practices which jeopardize
their family’s safety or that of the greater community. Dan Simpson’s attempt
to equate environmental destruction with all shale drilling is unfounded.
According to DEP, Pennsylvania’s unconventional gas well count stands at
9,550. If environmental degradation was inevitable for each gas well
drilled, as asserted, we’d see that after over seven years of Marcellus Shale
development. No one wants to see
anyone’s water supply damaged, and I expect to see the industry’s environmental
record continue to improve from the early exploration, but the numbers prove that
fear mongering is over-stated.
As royalty owners, we
feel a strong, well-funded regulatory body to oversee the drilling operations
will protect all citizens of the Commonwealth. The Act 13 Impact Fee increased yearly funds to DEP by $6,000,000 and
an additional yearly allocation of $7,500,000 to County Conservation Districts
to assist in site inspections.
In growing numbers, the “frackers,” as you call them, are also
from inside our communities. The pride I see them take in protecting their
hometowns is a key component to safeguarding the development as well. We need to recognize industry leaders like
Cabot Oil and Gas who have invested heavily in education inside of the
communities they operate in. In April of 2014, they announced a $2.5 million
gift to Lackawanna College’s School of Petroleum & Natural Gas. This is a
massive investment in our kids, our future, and our environment.
There’s nothing mythical
about the positive impact shale gas drilling is having on our entire state. Realistically, even the non-Marcellus
region has discovered “El Dorado” through the Act 13 Impact Fee, which has
generated over $630 million, to date, according to the Public Utility
Commission (PUC). While 60% is designated to return to the counties where
the drilling is taking place, the balance is transferred to non-Marcellus
production counties after some defined allocations are made to regulating
agencies. To date, that’s over $250 million sent downstate as a diplomatic
gesture.
The radical anti-drilling crowd is promoting a statewide
moratorium, thinly veiled as a call for a severance tax, while refusing to
recognize the effectiveness of the Impact Fee to remedy the real drilling
impacts. The “adequate” tax you
propose isn’t about remedying impacts, but rather feeding a “tax and spend”
system whose insatiable thirst will inevitably yield to a market-driven
moratorium.
In the Rendell years,
numerous severance tax proposals would have placed Pennsylvania’s proposed
energy tax at or above a national high of 7.5%, in addition to Pennsylvania
already having the nation’s highest corporate tax rate of 9.99%, in effect
crippling the development success we now enjoy. According to Associated
Petroleum Industries of Pennsylvania, our current
state tax structure has already generated over $2 billion from the drilling
industry since 2007.
Mr. Simpson’s editorial
attempted to rally support by invoking envy. He falsely portrayed the severance
tax as being “extracted from the fracking companies,” but in reality, the rise
in energy costs as a result of a new tax will be passed on to the consumer,
which only raises heating and electricity costs, hurting the poorest among us
most. The residents of Marcellus country
overwhelmingly oppose the imposition of a new energy tax, demonstrated in the
proposal’s defeat in the most recent budget battle. When these facts are
weighed, we think our contributions from Marcellus country are more than
“adequate” already.
We are building the legacy of shale gas development in Pennsylvania today, but I am far more optimistic about how history will remember us. It will be an organized, informed, and engaged royalty owner who will be the catalyst for balanced, common-sense shale gas development. 96% of unconventional natural gas produced in Pennsylvania is produced by members of the leading industry trade group. Royalty owners also need to recognize the value of organizing around our interests in an effort to ward off threats to our rights which include the imposition of punitive taxes, moratoriums, and our on-going struggle to be paid properly for our gas.
