PA Enacts Among the Lowest Natural Gas Drilling Fees in the Nation
Latest:
Pa. Should Not Spend Taxpayer Dollars to Subsidize New Markets for Natural Gas Producers, April 2013
Proceed with Caution: Report on Pa.'s Energy Future Makes Unreliable Claims, December 2012
Natural Gas Impact Fees Through 2011 About Half of What a Drilling Tax Would Raise, September 2012
Highlighted:
Table: Natural Gas Drilling Tax Rates in Other States
Additional Resources:
Click here to read other Marcellus Shale reports and resources from PBPC.
On September 10, 2012, the Public Utility Commission reported that to date the commonwealth has collected $197.6 million in local Marcellus Shale impact fees and expects to collect $205.9 million in all. View the report here.
On February 8, 2012, the Pennsylvania Legislature enacted a Marcellus Shale overhaul that, among other things, gave counties the ability to adopt a local impact fee on shale drillers. All 27 counties with producing shale wells, along with another 16 that do not currently have active shale wells, have agreed to assess the fee.
The new law gives Pennsylvania one of the lowest drilling tax or fee rates in the nation. It sets a 15-year rate schedule for Marcellus wells that rises and falls from year to year based on the price of natural gas and the Consumer Price Index. In 2012, drillers will be assessed a $50,000 per-well fee, which will be due on September 1, 2012. In future years, payment of the annual fee will be due on April 1.
Across the country, 96% of natural gas is produced in states that have drilling, or severance, taxes. While some policymakers in Pennsylvania objected to a shale tax over worries about its impact on the industry, studies in Wyoming, Utah and other states have shown that tax rates have little effect on natural gas production. Rather, drilling decisions are made based on the location of reserves and the expected price of natural gas.
Citizens Marcellus Shale Commission
Pennsylvanians believe that gas drilling in the Marcellus Shale has moved too quickly and that public officials need to do a better job protecting their communities and the environment, according to the final report of the Citizens Marcellus Shale Commission.
The Commission heard from 116 testifiers at hearings held in August and September 2011 in Harrisburg, Philadelphia, Southwestern Pennsylvania, Towanda and Williamsport. More than 400 people from 48 counties attended the hearings, while another 110 concerned citizens submitted comments online.
The Pennsylvania Budget and Policy Center was one of the Commission's sponsoring organizations.
Learn More about the Citizens Marcellus Shale Commission.
PBPC Research and Reports on Natural Gas Drilling Tax
The Pennsylvania Budget and Policy Center has produced several reports on enacting a drilling tax on natural gas production in Pennsylvania.
In April 2009, PBPC released a comprehensive report on drilling taxes, titled, “Responsible Growth: Protecting the Public Interest with a Natural Gas Severance Tax.” It examined the potential costs of increased natural gas drilling on Pennsylvania taxpayers and the environment, how drilling taxes are structured in other states, and what lessons Pennsylvania can learn from them.
Since then, PBPC has produced a variety of research and policy papers on the drilling tax. You can access our reports and research below.
Drilling Tax Reports & Resources
Pennsylvania's Natural Gas Tax Giveaway Exceeds $500 Million Mark, September 2012
All 27 Counties with Producing Marcellus Shale Wells Adopt Impact Fee, April 2012
Pa. Marcellus Shale Fee Among Lowest in Nation (Blog Post), February 2012
Gas Drilling Tax Impasse Costs Pa. $300 Million, January 2012
SB 1100: Out of Sync with Most Energy-Rich States, November 2011
Senate Drilling Fee Bill More Than Industry Asked For, November 2011
Giving Away the Store: A Fact Check on Marcellus Tax and Fee Plans, November 2011
Under PA House Leadership Bill, Gas Drillers Would Pay One-fifth of What They Pay in Texas, November 2011
Statement: Governor's Drilling Fee Plan Sells Pennsylvanians Short, October 2011
New PA Drilling Tax Bill to Fund State Priorities, September 2011
New Commission to Gather Citizen Input on Marcellus Shale Drilling, August 2011
PBPC Responds to Marcellus Shale Advisory Commission Report, July 2011
Statement on Gas Industry-Financed Report on Marcellus Shale's Economic Impact, July 2011
$200 Million Lost to Legislative Inaction on Marcellus Drilling Tax, July 2011
Drilling Deeper into Job Claims: The Actual Contribution of Marcellus Shale to PA Job Growth (Keystone Research Center), June 2011
Summary of Representative Reed's Marcellus Fee Plan, June 2011
Critical Points on Marcellus Shale Tax/Fee Plans, June 2011
Drilling Fee Bills Fail to Address Pressing State Needs, June 2011
A Turn for the Worse: Sen. Scarnati's Amended Marcellus Shale Fee Plan, June 2011
Comparing Rep. Quinn's Marcellus Drilling Fee to Other Plans, June 2011
Table Detailing Natural Gas Drilling Tax Rates in Other States, May 2011
Comparison of Legislative Proposals for a Marcellus Shale Drilling Tax, May 2011
Department of Revenue Analysis Goes Well Beyond Taxes Paid by Drillers, May 2011
Representation without Taxation: How Natural Gas Producers Escape Taxes in Pennsylvania, April 2011
Fact Check: West Virginia Led the Nation in New Gas Wells in 2010, April 2011
Plan Would Mark Significant Compromise on Severance Tax, October 2010
Comparison of House, Senate Severance Tax Plans, October 2010
Fact Check on Severance Taxes and Marcellus Shale, October 2010
How to Structure a Severance Tax that is Fair to Pennsylvanians, August 2010
PBPC Responds to Gas Industry-Financed Report on Marcellus Shale's Economic Impact, May 2010
Reality Check: Natural Gas Industry Report Falsely Claims Sky Will Fall if Severance Tax Enacted, October 2009
Shared Costs, Shared Resources: State Distribution of Severance Tax Revenues, June 2009
Responsible Growth: Protecting Public Interest with a Natural Gas Severance Tax
The Full Report, April 2009
Four-page Report Summary, April 2009
Press Release, April 2009
Video of Press Conference, April 2009
Marcellus Shale Forum
View video from a forum on natural gas drilling in the Marcellus Shale, January 2010
Public Testimony
Testimony of Michael Wood on Marcellus Shale Fee before the Marcellus Municipal Co-op, a bipartisan group of township and borough officials convened by Rep. Jesse White, August 24, 2011
Testimony of Michael Wood on Marcellus Shale Advisory Commission Report before the House Democratic Policy Committee, July 2011
Testimony of Michael Wood on Natural Gas Drilling Tax before the House Democratic Policy Committee, February 2011
Testimony of Michael Wood on Natural Gas Severance Tax before the House Appropriations Committee's Subcommittee on Fiscal Policy, April 2009
