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Drilling Companies Reduce Investment In Pennsylvania

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(Credit: KDKA)

(Credit: KDKA)

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PITTSBURGH (KDKA) — Recently, Marcellus gas drills have sprouted up like mushrooms over our landscape, but with wholesale gas prices falling more than 20 percent in the past year, companies are cutting back on exploration here and deciding where best to put their limited resources.

“So you either see companies reducing their capital investment in Pennsylvania, scaling back, not drilling as much as they’d like or redirecting those investments to other states,” Matt Pitzarella of Range Resources said.

Major gas exploration companies such as Chesapeake and Cabot are reducing their drilling significantly — and others like Talisman Energy have shifted some of that drilling to places like Texas where taxes are close to nil and where there is little opposition to the drilling unlike western Pennsylvania where environmentalists have come out strongly against the drilling and the city of Pittsburgh has passed an all-out ban.

“I think the gas companies are putting pressure on Pennsylvania to weaken their regulations,” says Myron Arnowitt of Clean Water Action. He says the gas companies are using the temporary pull back to pressure Pennsylvania to lighten the existing tax load and oversight and will not be walking away from western Pennsylvania.

“They all know that the Marcellus Shale has natural gas and they would like to drill for it, whether it’s today or tomorrow or next week or next month.”

But an exodus from Pennsylvania now would be surprising since recently sworn-in Governor Tom Corbett is a decided friend of the natural gas industry and has vowed not to impose a severance tax on drilling that has been adopted elsewhere. But Pitzarella says the state must become even more competitive.

“And Pennsylvania right now has to decide, ‘Do we want to just be competing for a playoff spot or do we want to be a championship team?’

“Because with limited dollars and low gas prices, it’s going to be the state that encourages the usage that comes out on top,” he said.

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