March 13, 2009

The House Agriculture Committee held a hearing on Marcellus Shale Wednesday morning during which representatives from the Penn State Cooperative Extension presented a comprehensive power point presentation to the committee.

During the hearing Chairman Mike Hanna noted that the Secretary of DEP has stated that current water treatment facilities are not equipped to handle the treatment of the water but industry has noted that they are. The Chairman asked who is right.

The response was that the technology is developing so rapidly that it’s difficult to answer the question. Chairman Hanna also noted that there is a severance tax proposal and a proposal to tax natural gas at the local level. He noted that industry says both taxes are prohibitive to development and exploration and asked which tax has less of an impact on the industry.

First and foremost the presenters noted that they have no official position on the proposed taxes but they did note that a severance tax is easier to impose because it is on actual production and the current proposal to allow a tax at the local level would tax the gas that is below the surface which may or may not ultimately be extracted. To see the power point presentation, click here.