Shale group: Gov. Rendell tax unfair, Pa. laws outdated

HARRISBURG, Pa. (AP) — The natural gas industry is bracing for a political tussle over whether and how Pennsylvania will tax the methane from the potentially lucrative Marcellus Shale formation.

The industry’s trade association, the Marcellus Shale Coalition, is responding to Gov. Ed Rendell’s call to tax both the sale and volume of natural gas extracted from Pennsylvania.

The shale coalition says other shale states set the initial tax rate low enough to let the companies recoup the multimillion-dollar cost of drilling.

The coalition also says Pennsylvania’s drilling laws are outdated, cumbersome and costly with comply with.

Rendell wants money to shore up a state treasury that faces a projected multibillion-dollar gap resulting from spiraling public pension costs and the expiration of federal stimulus budget aid.