One Step Closer to a Marcellus Shale Gas Severance Tax in Pennsylvania
This post was written by Nicolle Bagnell and Ariel Nieland.
Last night, the Pennsylvania House of Representatives voted 104-94 in favor of passing Senate Bill 1155, the state's first natural gas severance tax. Currently, Pennsylvania is the only Marcellus Shale state that does not impose a tax on natural gas production. The proposed tax, which is likely to be scaled back once it goes before the Senate for a vote, would also be one of the highest of its kind in the nation, at 39 cents per 1,000 cubic feet (Mcf) of natural gas. A similar severance tax currently in place in West Virginia, 5% of the value of the gas plus 4.7 cents per Mcf, is more akin to the rate favored by Pennsylvania Governor Ed Rendell. Although many opponents are concerned that the tax would kill job growth and stifle what has been seen as "one of the few bright spots in Pennsylvania's economy," supporters of the tax contend that it would enable the state to put environmental safeguards in place, while compensating Pennsylvania citizens for the use of their state's natural resources.
