Editorial: Marcellus Works sounds great — for the most part
More jobs, a cleaner environment, a stronger Pennsylvania economy — it's a terrific combination.
There's much to like about the so-called Marcellus Works package of bills introduced in the state House recently by a group of Republican legislators. The goal is to provide a combination of tax credits, grants and loans to boost the use of natural gas as an everyday transportation fuel.
Natural gas — extracted from the commonwealth's Marcellus Shale formation — is abundant, cheap and burns clean. The challenge is to develop a critical mass of natural-gas vehicles that can support an adequate network of fueling stations, and that won't happen, of course, without fueling stations in the first place.
The nine bills in the package address that issue by providing financial incentives on both ends. Three bills in particular would draw on taxpayer funds to provide tax credits: H.B. 301, for conversion of fleet vehicles to natural gas; H.B. 305, to companies for establishing fueling stations in highway corridors; and H.B. 309, for purchasing large natural-gas-fueled vehicles.
Critics — and they aren't just Democrats — say such incentives fly in the face of free-market principles and wonder why Republicans would single out one industry for special treatment. How is this different from tax credits for other alternative fuels, such as wind or solar?
But natural gas is different. Its economies are already proven, while those other forms of generation have failed the ROI test even with government support. While NGVs cost more than conventional vehicles at the outset, the payback goes to the bottom line predictably and quantifiably.
The only objection we have to Marcellus Works is the free money that would go to the natural-gas industry to make an already prosperous industry more so. That's tax money urgently needed for core state functions, like road and bridge repair, pension obligations, schools and public safety. The tax credits alone are estimated to cost $60 million a year, until they eventually sunset.
The shale drillers already pay an impact fee to Pennsylvania for extracting a non-renewal resource. It is modest enough, though, that they remain flush with cash. Like any other established industry, those companies should be expected to share in an investment that will directly benefit them by contributing to any incentive pool.
It's not the role of government to select winners and losers. By all means, support the shale industry. But do it fairly and not at the expense of other tax-paying, job-building Pennsylvania industries.