Anti-Severance Tax Forces Have Cost PA $500 Million Since 2009

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Michael Wood tallies up how much revenue PA would have collected if we’d had West Virginia’s modest severance tax on gas drilling since June 2009:

The state’s Department of Environmental Production (DEP) recently published a biannual report on Marcellus Shale production in Pennsylvania. (Most states require monthly reporting, but that is a different story.) In the data, we can now see how much the state has really given away by refusing to put a robust gas extraction tax in place — and the sum is staggering.

From July 2009 to June 2012, over $8 billion worth of natural gas was extracted from Pennsylvania’s share of the Marcellus Shale. The Commonwealth would have collected more than $500 million had we had West Virginia’s natural gas tax in place. Instead, we got $0.

The recent DEP report was incomplete, as the Associated Press highlighted. Production from Chesapeake Energy (likely the state’s largest gas producer) wasn’t included nor disclosed as being missing in the initial release. Add in the production from Chesapeake over the last six months, and the lost tax revenue figure would be even bigger.

This entry was posted in Budget.

5 Responses to Anti-Severance Tax Forces Have Cost PA $500 Million Since 2009

  1. Matt says:

    Check out the Baker Hughes rig counts, and you’ll see that PA has been remarkably resilient in the last year as natural-gas prices have slid. Meanwhile, more robust tax regimes have seen capital flow away from them.
    Sounds like PA has kept its landowners and small businesses in the money by keeping the tax low.

    As someone in one of those more robust tax regimes, I say to PA: Start taxing! We’re all for it.

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  3. Nick says:

    Tax small business and let Big Oil extract for free. Yeah. makes sense.