Tall Tales About Deep Wells: House Bill Won't 'Crush' Gas Industry

The natural gas industry has been spinning tales about the impact of a Marcellus Shale severance tax in Pennsylvania.

In a series of reports throughout the month of September, the Pennsylvania Budget and Policy Center is going to set the record straight with our new series, "Tall Tales About Deep Wells."

Part 3: September 28, 2010

Severance Tax Proposal Won’t “Crush” Natural Gas Industry

The Pennsylvania House is considering a bill to enact a severance tax on natural gas at a fixed rate of $0.39 per thousand cubic feet (MCF). The rate is not, as some have claimed, the highest in the nation. In fact, it is competitive with other energy-producing states. Accounting for property taxes paid by drillers in other energy-producing states but not in Pennsylvania, the effective tax rate in the House bill is lower than that in Montana, New Mexico and Wyoming. Read More

Part 2: September 22, 2010

Smoke & Mirrors: Driller’s Tax Plan Far More Generous than ‘Arkansas Model,’ Bad Deal for Pennsylvanians

The Marcellus Shale Coalition, which represents the industry, has cited the “Arkansas model” as its preferred tax plan, and is circulating a proposal that it claims is based on this model. In fact, the industry plan is far more generous than the model on which it is purportedly based. It would significantly reduce revenue collected from the tax, which is intended to compensate Pennsylvanians for the removal of a valuable non-renewable resource. Read More

Part 1: September 7, 2010

Yes, Virginia, There is a Natural Gas Boom in West Virginia

The natural gas industry has argued that Pennsylvania is unique in seeing a surge in Marcellus gas wells and that a tax will impede growth. In fact, neighboring West Virginia is also experiencing significant new drilling activity and investment, while creating jobs. But unlike Pennsylvania, it is also collecting new tax revenue. West Virginia has levied corporate, severance, and local property taxes on natural gas extraction for many years, yet production has been higher than in Pennsylvania and continues to increase. Read More

Severance Tax Overview: August 30, 2010

How to Structure a Severance Tax that is Fair to Pennsylvanians

As Pennsylvania lawmakers debate the contours of a severance tax on natural gas extracted from the Marcellus Shale formation, PBPC released a report making a series of policy recommendations, including assessing a reasonable tax rate, limiting loopholes and restoring local government's authority to assess property taxes on oil and gas interests.
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