Pay attention to what PennFuture calls an oil and gas “subsidy”

The following op-ed appeared in the York Daily Record and other publications.

By Senator Gene Yaw

The group Citizens for Pennsylvania’s Future, also known as PennFuture, recently released a report entitled “Buried Out of Sight: Uncovering Pennsylvania’s Hidden Fossil Fuel Subsidies.”

This Harrisburg-based organization is dedicated to lobbying against Pennsylvania energy and responsible use of natural resources. Interestingly, PennFuture — a registered nonprofit organization — also has a nearly 40% ownership interest in a for-profit company that invests in energy efficiency and renewables. This ownership interest can pay PennFuture up to nearly $200,000 annually and begs questions about their impartiality.

With respect to their report, it is worth highlighting some of the examples that PennFuture regards as a subsidy for Pennsylvania’s fossil fuel industry. Most of these subsidies are in fact calls for higher taxes directly on Pennsylvania citizens — not businesses. For example, PennFuture considers these to be subsidies of big oil and gas:

• $1 billion because Pennsylvania does not levy the 6% sales tax on the sale of gasoline and diesel. This calculation conveniently ignores that Pennsylvania imposes the highest liquid fuels tax in the nation in lieu of a sales tax. It is difficult to comprehend how not imposing a 6% sales tax on consumers at the pump — because Pennsylvania already has a separate gasoline tax — constitutes a subsidy for the fossil fuel industry.
• $1.06 billion because Pennsylvania does not impose a property tax on oil and gas ownership interests by landowners. PennFuture again argues that not imposing a specific kind of tax is a subsidy, while again conveniently ignoring that any property tax that is imposed would fall on Pennsylvania landowners — not the fossil fuel industry.
• $169 million for not imposing the 6% sales tax on homeowners who heat with fuel oil. Put simply: when a low-income homeowner receives a shipment of fuel oil to heat their home for the winter, and does not pay sales tax on that transaction, PennFuture regards that as a subsidy for the oil and gas industry.
• $260 million for not imposing the 6% sales tax on electricity use by homeowners, businesses, and nonprofits. This again conveniently ignores that Pennsylvania instead imposes a gross receipts tax on electric bills. Imposing the sales tax would be double-taxation, and this burden would fall directly on Pennsylvania citizens.
• $305 million for not imposing the gross receipts tax on natural gas home energy use. Again, PennFuture regards the lack of a specific tax on Pennsylvania consumers to be a subsidy for the fossil fuel industry while ignoring that any gross receipts tax in Pennsylvania would be fully recoverable directly from consumers.

This fails on two fronts — not imposing a tax is counted as a subsidy, and ignoring that any such tax, again, if imposed falls squarely on individual citizens, and is recoverable under the Public Utility Code. It cannot reasonably be referred to as a subsidy for the oil and gas industry.

PennFuture, in its tales about the fossil fuel industry, ignores one crucial fact — there is not a clean or green energy undertaking on the planet, which does not depend on fossil fuels at some point. Stated simply, without fossil fuel there is no clean or green energy.

In an effort to advance an energy agenda that is not in line with the needs of Pennsylvanians, some will distort the truth with misinformation, hoping that you do not pay attention to the details. It is clear that the overwhelming majority of subsidies identified here would, if eliminated, simply impose billions of dollars of new taxes directly on the citizens that we represent.

State Senator Gene Yaw of Williamsport (R-23rd Dist.) is Senate Environmental Resources and Energy Committee chairman.