Pennsylvania farmers benefit from strong natural gas industry (Opinion)

There are few industries that require as much constant dedication and attention as agriculture does. That work is day in and day out, 365 days a year, seven days a week. For a farmer, there are no weekends or paid time off.

Our blood, sweat and tears go into the land. It is a true labor of love. But regardless of all the hard work that goes into farming, there are still so many factors that are out of our control — weather, crop and animal disease, supply chain issues and increasing business costs.

It’s a challenging industry to say the least.

It is also a very energy-dependent industry. We use energy for a myriad of reasons — to run equipment, power our farms, help grow our produce, care for our animals, and transport our goods — just to name a few.

Because reliable and affordable energy is such a key component to our businesses, the Pennsylvania Grange supports the development of the Marcellus Shale and utilizing natural gas in our operations.

Pennsylvania’s prolific natural gas reserves help to keep energy prices lower than in other regions of the U.S., as well as bring energy reliability and stability to the commonwealth. When you are operating a business on a thin profit margin — like many in the agriculture industry — those cost savings can have a major impact on the bottom line and can be used to buy much-needed equipment or feed. It can be a deciding factor in a family farm’s ability to survive another year.

The increased usage of natural gas has been a game changer for Pennsylvania and the agricultural community. Our state should be held up as a model for how energy development can benefit its residents and its economy. In a state as vast and diverse as Pennsylvania, we were able to strike a unique balance in promoting continued growth of the natural gas industry while also ensuring that local communities across the state are positively affected. This is done by way of the impact tax.

This tax is specific to Pennsylvania. Rather than simply following the lead of other states and sending revenues from gas drilling directly to the state’s General Fund, Pennsylvania took an innovative approach. Each year, drillers are assessed a fee. These revenues are then split into county and local municipality distributions and to environmental programs.

Local governments have used the revenues to better their communities by way of road and bridge improvements, infrastructure projects such as sewage and water treatment facility upgrades, grants to fire departments and emergency responders and enhancements to parks and recreation centers.

The impact tax makes sense. Those communities that are directly impacted by the drilling industry should receive a larger portion of the annual tax revenue. But the beauty of the tax structure is that it also provides funding for every county  and for important environmental projects.

It is an appropriate assessment of the natural gas industry, and it continues to bring in significant revenues annually. This year alone, the impact tax brought in a record-breaking $279 million.  Since it was enacted more than a decade ago, it has brought in more than $2.5 billion. This tax is in addition to other business and income taxes contributed by the natural gas industry.  It is a “common – wealth” tax.

It is not in the best interest of the state or its residents to dismantle a tax structure that is working so well and benefiting so many.  Placing additional taxes on the industry — which some lawmakers continue to seek — would risk slowing the progress and growth we’ve experienced over the past decade. It would be to the detriment of our state’s agricultural industry, which depends on reliable and affordable energy.

Politicians need to prioritize the state’s potential and promote policies that will continue to capitalize on Pennsylvania’s rich natural gas reserves. A thriving natural gas industry is mutually beneficial to so many other businesses across the state — including the agricultural industry.

Matt Espenshade is president of the Pennsylvania State Grange.