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: PA Shortchanged by Drilling Fee that Fails to Keep Pace with Gas Production

Drilling Fee: All Counties with Producing Marcellus Shale Wells Adopt Impact Fee

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

Shale Economy: Learn More About Marcellus Shale and the Economy

Browse Marcellus Shale Tax Publications Below

April 10, 2014

Natural gas drilling has transformed two Pennsylvania counties with the greatest development activities, for better and for worse.

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."

March 31, 2014

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

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.

February 25, 2014

The state Department of Labor and Industry publishes job numbers for what it calls "Marcellus Shale-related ancillary industries," but they are not based solely on employment trends in the counties where drilling is occurring.

January 17, 2014

A new report out from the Mercatus Center at George Mason University gives Pennsylvania low marks for its finances, placing it 42nd nationally in overall fiscal condition and 47th in cash solvency. The report also provides new evidence that it is great to have gas (and oil) — if you tax it appropriately.

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