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

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.

November 21, 2013

A review of statements by representatives of shale drilling firms and their allies makes the motivation for this exaggeration clear — to preclude, or at least to minimize, taxation, regulation, and even careful examination of shale drilling.

August 8, 2013

Using a “moderate” production scenario, the Pennsylvania impact fee brings in less revenue than a severance tax comparable to that of Texas or West Virginia.

June 18, 2013

As the economic value of natural gas production increases in Pennsylvania’s Marcellus Shale, the local impact fee created by Act 13 of 2012 is failing to keep pace. By 2019-20, a 4% natural gas severance tax could generate three times as much as the fee is estimated to bring in.

April 17, 2013

These bills ask senior citizens in York and working families in Pottstown to subsidize Chevron, Hess and Royal Dutch Shell.

June 8, 2012

Governor Tom Corbett’s administration has proposed giving $1.65 billion in state tax credits over 25 years to companies that build and operate an ethylene cracker plant in Pennsylvania. It would be a windfall for Shell Oil, which is evaluating a site for a cracker plant in Beaver County.

November 18, 2011

Legislation approved this week by the state Senate would assess an impact fee on Marcellus Shale drilling in Pennsylvania that is well below what gas drillers pay in extraction taxes in many other energy-rich states, such as Texas, Wyoming and Arkansas. 

November 15, 2011

Governor Corbett’s proposal would assess the equivalent of 1% over the life of an average Marcellus Shale well and Senator Scarnati's revised SB 1100 would assess the equivalent of a 2.2% rate. A comparable well in Texas would raise five times more than either plan.

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