Gas industry's Harrisburg investment produces fantastic ROI | Blogh

Thursday, July 12, 2012

Gas industry's Harrisburg investment produces fantastic ROI

Posted By on Thu, Jul 12, 2012 at 5:17 PM

The next time environmentalists tell you that the natural gas industry doesn't contribute to Pennsylvania, you can tell them they are wrong: According to a report newly out from a watchdog group, the industry actually has been very generous to at least one set of Pennsylvanians -- our elected officials., a venture backed by Common Cause and Conservation Voters PA that tracks the gas industry's political influence, has fresh research out on how much weight industry execs have thrown around. The new data itemizes campaign contributions and lobbying expenditures by industry execs through the first three months of this year -- a period when state officials passed a gas fee structure that critics contend was highly favorable to the industry.

Not surprisingly, lobbying expenditures in the first quarter of 2012 were the highest in the past five years (Excel spreadsheet). More than two dozen energy corporations and their front group, the Marcellus Shale Coalition, spent over $1.8 million in that three-month period. That's an increase of nearly 36 percent compared to the last three months of 2011, and it is almost entirely attributable to activity by the Coalition itself.

In a statement, noted that since 2000, the industry has spent $23.7 million on campaign contributions and lobbying. Noting that contributions have tailed off somewhat while lobbying has increased, Common Cause's James Browning said that early on, drillers "spent millions to put their friends in the state legislature and the Governor's mansion" but had shifted to "protecting these investments and maintaining access to key elected officials."

And what did the gas industry get for its money? In February, the state passed Act 13, whose fee structure may be the most generous in the nation.

How generous? It's tough to be precise, since revenue from the fees depend on a number of variables, including the number of wells in operation, and the going price of the gas itself. But in January, Reuters calculated that if Harrisburg had adopted a royalty structure similar to that used in West Virginia, Pennsylvania could have earned as much as $24 billion in additional revenues. That's "billion." With a "b."

So while $23 million seems like a lot of money to spend on palling around with politicians, it's just pocket change. If we accept Reuters' $24 billion figure, you could argue that for every dollar the gas industry spent on garnering political influence, it got back nearly $1,050 in lowered tax bills. That's a return on investment of ... let's see ... more than 104,000 percent.

So actually, I guess the environmentalists were right all along. Even our politicians didn't end up cashing in as much as they could have. Which is sort of tragicomic in its own right: We're all used to the idea of politicians selling out our state, of course ... but by trading away potential revenues for such a pittance in their campaign coffers, legislators ended up shortchanging themselves.


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