Sen. Young Blasts Gas Tax Plan

ALBANY - State Senators Catharine Young (R,I,C-Olean), George Winner (R,I,C-Elmira) and Thomas Libous (R,I,C-Binghamton) today blasted Gov. David Paterson for secretly pushing a new oil and natural gas production tax that could put thousands of natural gas wells out of business across the Southern Tier, and stifle new development that could generate up to a billion dollars of investment in the state and local economy.

"Albany’s full-scale assault to destroy the Upstate economy continues. This 5 percent tax will kill a major revenue generator in rural areas, making low-volume producing wells unfeasible to operate. There won’t be enough revenue left to cover costs. Farmers, landowners and local governments depend on income from these oil and natural gas wells. Not only will this outrageous tax put people out of business, it will drive up local property taxes," Sen. Young said.

"It damages our efforts to become energy independent, and hurts the environment by depressing production of a clean energy source. Gov. Paterson, Senate Majority Leader Malcolm Smith and Assembly Speaker Sheldon Silver, all New York City Democrats, have been meeting behind closed doors to craft a budget that includes enormous tax hikes that will put a knife in the heart of our Southern Tier economy," she added.

“It’s a move to drive the industry, its jobs, and its economic activity out of New York State,” said Sen. George Winner. “The last thing we need in this economic climate is another job-killing tax or another roadblock to economic opportunity for communities and landowners.”

“New York state is already making life difficult for the oil and gas drilling industry,” said Sen. Tom Libous. “There’s great potential for Marcellus Shale drilling in the Southern Tier. Adding another hurdle to this emerging industry could make this economic opportunity disappear. That will be very disappointing to a lot of people who are counting on it in this tough economy.”

The Senators said that there is already a production tax on the existing 14,000 wells in New York which are producing natural gas—through a real property tax process. The Governor’s plan calls for placing an additional 5 percent tax on oil and natural gas production in the State.

The natural gas tax will be another deterrent to exploration of the Marcellus Shale, which could pump millions, if not billions of investment into the state, the Senators said.

Recent technological advances have allowed access to indigenous gas resources in the shallow Marcellus Shale. The entire Marcellus Shale formation, from the West Virginia to New York’s Catskills, is estimated to contain 168 to 516 trillion cubic feet of natural gas. Ten to 20 percent of this natural resource lies within New York’s borders.

Existing oil and natural gas wells by County:
Chautauqua - 3,891
Cattaraugus - 2,499
Allegany - 1,508
Erie - 1,492
Genesee - 637
Wyoming - 412
Steuben - 399
Cayuga - 304
Seneca - 180
Livingston - 167
Schuyler - 149
New York -56
Ontario - 55
Chemung - 42
Westchester - 32
Madison - 38
Tioga - 25
Yates - 18
Chenango - 10
Bronx - 9
Albany - 4
Wayne - 4
Essex - 3
Oswego - 3
Cortland - 2
Sullivan - 2
Broome - 1
Niagara - 1
Oneida - 1
Onondaga - 1

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