An Our Philadelphia Report
Deep Drilling, Deep Pockets The Campaign Contributions & Lobbying Expenditures of the Natural Gas Industry in Pennsylvania
The natural gas industry gave $2.85 million to political candidates in Pennsylvania between 2001 and March 2010, and it spent $4.2 million on lobbying since Pennsylvania began requiring lobbyist reporting in 2007. Spending in both categories has spiked since 2008 as new drilling techniques have enabled the industry to more fully exploit the Marcellus Shale (See chart on p.5). This spike also comes as the industry is seeking to defeat a proposed severance tax on natural gas extraction, defeat a moratorium on drilling in state-owned lands, defeat or delay tougher environmental regulations, and keep information about exactly what mixtures of chemicals are used in natural gas extraction secret. With enough natural gas to fuel domestic demand for at least 10 years—and a current market value estimated at more than $1 trillion—the Marcellus Shale has enabled the industry to promise a modern-day Gold Rush for the state.
This study tracks the extent of the industry’s giving to elected officials and its success in rapidly expanding operations in the state before the potential for environmental damage from drilling has been fully studied. Pennsylvania and New York are the only major natural gas producing state that does not tax the extraction of this finite natural resource. Revenues from the severance taxes levied in other states are used to fund environmental protection, infrastructure repair, and proper regulation of drilling. On the lack of a severance tax in Pennsylvania, Department of Conservation and Natural Resources Secretary John Quigley recently said, “Quite frankly, the citizens of this state are being played for chumps.” Or as a spokesman for Chesapeake Energy, which has 519 well permits in Pennsylvania, told a reporter in 2009, “We gladly pay a severance tax in every state where we’re active, except in New York and Pennsylvania.”
Findings
Below is a summary of this study’s key findings.
- Drillers have a clear favorite in the 2010 gubernatorial race—Republican Tom Corbett, recipient of $361,207, with 93% of these contributions coming since January 2008. Among the candidates on the Democratic side, Dan Onorato was the top recipient with $59,300, followed by Jack Wagner with $44,550. Joe Hoeffel received a single contribution of $2,000 from the industry in 2004 while running for the U.S. Senate, but has received nothing since. Democratic candidate State Sen. Anthony Williams received no contributions from the industry, as did Republican candidate State Rep. Sam Rohrer.
- The biggest single donor by far was S.W. Jack Drilling with $1 million in contributions—an amount that comprises more than a third of the industry total of $2.85 million over the last ten years. Of S.W. Jack Drilling’s total, $990,000 came from CEO Christine Toretti.
- Gov. Ed Rendell was number six on the list of top recipients with $84,100. Rendell has been a leading proponent of a severance tax, but has also called himself the industry’s “best ally.”
- Among recipients that could identified as belonging to one of the two major parties, 84% of industry contributions went to candidates and committees that could be identified as Republican ($2.28 million), while 16% went to candidates and committees that could be identified as Democratic ($428,000).
- The industry’s annual lobbying expenditures have roughly tripled in the last three years, from $579,000 in 2007 to $1,685,000 in 2009. And from the last quarter of 2009 to the first quarter of 2010, lobbying expenditures rose from $421,000 to $716,000.
- Several of the contributors identified in this study have given to multiple candidates in the 2010 governor’s race. For example, on 12/16/09, Consol Energy CEO J. Brett Harvey gave $5,000 to Tom Corbett, then gave $5,000 to Dan Onorato on 12/23/09. From 2009-10, the Range Resources PAC gave $16,416 to Tom Corbett, $5,000 to Jack Wagner, and $5,000 to Dan Onorato.
- The 33 Nay votes in the House’s recent passage of a drilling moratorium on state-owned land took on average 3.4 times as much money from the industry ($162,400 total, $4,923 average) as did the 42 co-sponsors of the bill ($60,650 total, $1,444 average).
Recommendations
Pennsylvania should take the following steps to limit the role of campaign contributions in shaping elections and public policy, and to make information about these contributions more readily available to the public.
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Contribution Limits. The current system allows big political donors to wield extraordinary influence over the political process in Pennsylvania, even as they face relatively little scrutiny, compared to many other states. Pennsylvania is one of eleven states that do not limit campaign contributions to candidates for statewide office and its state legislature. To protect the integrity of its legislative, regulatory, and judicial processes, Pennsylvania should limit contributions from both individuals and PAC’s to candidates for state and local offices. A recommended limit for General Assembly candidates would be $1,000 per election cycle. For statewide offices, limits should not exceed the limit set by the Federal Election Campaign Act for Federal candidates. Donors should also have an aggregate limit on contributions made to all candidates during an election cycle.
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A Better System of Disclosure. The state’s campaign finance database is not easily searchable and search results are not sortable, so that a search for natural gas interests which might take a few minutes with the more sophisticated databases used by New York or Maryland, for example, would take hundreds of hours in Pennsylvania. Electronic files obtainable from the Pennsylvania Department of State are not well standardized and are often rife with typos, forcing multiple searches based on name, address, and employer to ensure the complete collection of relevant data. For example, a simple search for Consol should not require additional searches to discover contributions under the names Colsol, Consal, and Consoe. Due to reporting errors by campaign treasurers, the database is also rife with duplicates .
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More frequent disclosure of campaign contributions. Pennsylvania should require the quarterly disclosure of campaign contributions during non-election years. Citizens should not have to wait for as long as twelve months to learn about the influence of campaign contributions from key supporters of legislative and regulatory efforts. In election years legislative candidates should be subjected to the same disclosure schedule as statewide candidates – adding a report due on the 6th Friday prior to an election.
Detailed Data Downloads
To learn more, download the full report files.