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Celebrating the recent opening of Shipley Energy's compressed natural gas station in Spring Garden Township, Gov. Tom Wolf thanked the company for taking the risk to invest in a fuel source not yet widely used in vehicles.

"We need this to be the wave of the future from an environmental standpoint," the governor said Friday. "And we need this to be the wave of the future from an economic standpoint."

Shipley's move might prove even riskier if the state Senate's revenue package — which narrowly passed a day earlier — is approved by the House and signed by Wolf.

The revenue bill, which Wolf said he supports, includes a severance tax on natural gas drilling that Senate Majority Leader Jake Corman, R-Centre County, said would generate about $100 million per year. Gas drillers would continue to pay an existing impact fee that is split by the state government and communities in the Marcellus Shale region.

Energy companies have long objected to a severance tax, saying it would harm the state's competitiveness. Pennsylvania is the nation's No. 2 gas-producing state after Texas.

More: York's senators oppose Senate's plan to close $2.2B budget hole

Consumers, meanwhile, would face $405 million in new or higher taxes from a gross receipts tax on their natural gas, electric and telecommunications bills.

Rep. Seth Grove, R-Dover Township, was sharply critical of the Senate's proposal, particularly of the two new taxes imposed upon the natural gas industry.

"If I'm a business that's a heavy user of natural gas, I'm out of here," he said.

Matt Sommer, president of Shipley Energy, said he's not necessarily opposed to any new taxes on the natural gas industry, but "the devil is in the details."

The details, as reported by The Associated Press, would include a new tax of 2 cents per thousand cubic feet of natural gas from the Marcellus Shale and a 5.7 percent tax on natural gas utility service.

Wolf said after the ribbon-cutting ceremony that he understands nobody likes new taxes, but the Legislature has to find a way to fund state services. The state needs to patch a more than $2 billion hole in the state's $32 billion budget for the fiscal year that began July 1.

More: County's first public CNG fueling station opens

Wolf pointed out that, aside from the extraction tax, the Senate's proposal does not include the taxes he originally proposed, but he was happy they agreed to a real, recurring revenue source.

The CNG fueling station, located at 714 Loucks Mill Road in Spring Garden Township, first opened in March. It's one of two open to the public in York County, with the other opened by Rabbit Transit at 415 Zarfoss Drive in West Manchester Township.

CNG is an alternative fuel widely being adopted by major freight companies across the country because it costs, on average, 40 percent less than diesel and cuts overall emissions by up to 30 percent, according to a Shipley news release.

— Reach David Weissman at dweissman@yorkdispatch.com or on Twitter at @DispatchDavid.

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