Marcellus Shale Tax Policy

Issue Spotlight: Pennsylvania's Natural Gas Impact Fee

The Effective Rates of Natural Gas Severance Taxes in Texas and West Virginia Clearly Outperform PA's Impact FeeIn 2012, Pennsylvania enacted an “impact fee” on natural gas wells drilled into Pennsylvania’s Marcellus Shale that generates a relatively small amount of revenue from the expanding gas industry. PBPC estimates that, using a “moderate” production scenario, Pennsylvania's impact fee will bring in less revenue than a severance tax comparable to that of Texas or West Virginia. As production increases over time, the gap grows larger between the revenue generated at the West Virginia or Texas tax rates and from Pennsylvania’s impact fee.

Latest Report: Gas Production Booms, Drillers’ Corporate Tax Payments Plummet

Act 13 Impact Fee: Falling Short of Severance Tax

Shale Case Studies: A Look at Shale Drilling’s Mixed Legacy

Shale Impact: Learn More About Marcellus Shale and its Impact on the Economy and Services

Responsible Growth: How a Severance Tax can Help Protect Pennsylvania

Browse Marcellus Shale Tax Publications Below

April 4, 2014

"Pennsylvania’s natural gas companies have something to celebrate today, a natural gas impact fee that is significantly lower than what they pay in other gas-producing states," said PBPC Director Sharon Ward. "For Pennsylvania residents, today’s announcement is just a reminder that we are shortchanged by the failure of our elected leaders to enact an adequate severance tax."

April 2, 2014

Two Pennsylvania newspaper editorials are making the case this week for enacting a severance tax on natural gas drilling, like most large energy-producing states have.

March 31, 2014

Has natural gas drilling been the economic game changer that industry leaders promised? Not according to the most reliable analysis.

March 27, 2014

State Senator Vincent Hughes of Philadelphia will unveil a plan today to assess a 5% severance tax on natural gas drilling in Pennsylvania.

March 26, 2014

Replacing the state's current drilling impact fee with a 5% severance tax would be very unlikely to inhibit new drilling.

March 25, 2014

The replacement of Pennsylvania natural gas impact fee with a 5% severance tax is unlikely to deter firms from drilling new wells in the state, and it will certainly not inhibit the continued operation of existing wells.

March 18, 2014

Suppose our three states got on the high road to economic development, taking a unified and coherent approach to tax policy to benefit the entire region and its residents?

March 10, 2014

Ohio, Pennsylvania, and West Virginia should take a common approach to taxing gas and oil drilling in the Marcellus and Utica Shale, leaders of research and policy organizations from each state said today.

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