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

November 11, 2011

The Pennsylvania House may vote next week on a drilling fee plan that asks Marcellus Shale drillers to pay significantly less than they pay in major energy-producing states like Texas and Arkansas.

October 25, 2011

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.

August 24, 2011

Click on the following links to read testimony from PBPC Research Director Michael Wood on severance tax and related Marcellus Shale policies.

June 28, 2011

Representative Dave Reed’s Marcellus Shale impact fee would establish 33 separate county-based drilling fees rather than a single statewide fee and have an effective tax rate of 1%. This rate is far lower than most proposals in the state House and Senate.

June 28, 2011

The General Assembly should enact a fair and meaningful tax on Marcellus Shale drillers that invests some portion of the funds into communities across the Commonwealth. PBPC sums up the critical points that lawmakers should consider as they debate this issue.

June 27, 2011

Leading Marcellus Shale impact fee plans in Harrisburg would give the lion’s share of local funding to only eight drilling counties, while doing nothing to address state cuts to education and local services, according to a new report from the Pennsylvania Budget and Policy Center.

June 20, 2011

If enacted in its current form, SB 1100 would fall far short of the public’s desire for a tax that makes drillers pay their fair share, protects the environment, and helps restore cuts to health care, education and children’s services.

June 15, 2011

State Representative Marguerite Quinn (R-Bucks) introduced legislation today creating a Marcellus Shale impact fee. This policy brief compares her plan with other proposals to assess a tax or fee on Marcellus gas drilling.

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