Tall Tales About Deep Wells: Setting the Record Straight About a Pennsylvania Severance Tax

(Important information, please click through to the linked articles. – promoted by John Morgan)

As Pennsylvania lawmakers debate the structure of a severance tax on natural gas extracted from the Marcellus Shale formation, the Pennsylvania Budget and Policy Center has been busy educating lawmakers and the public on how to shape a tax that is fair to all Pennsylvanians.

A key part of that effort is a series of brief reports we're calling “Tall Tales About Deep Wells.” You can check out the first two parts in the series here and check back often as we continue to set the record straight about the impact of a severance tax.

In our latest report, we take a close look at the tax plan put forth by the Marcellus Shale Coalition, a group representing the natural gas industry. The industry plan invokes the tax model in place in Arkansas, but in fact it is far more generous than Arkansas's severance tax, with a lower effective rate and outright exemptions in the later years of production. The industry plan would significantly reduce revenue collected from the tax, which is intended to compensate Pennsylvanians for the removal of a valuable non-renewable resource. It's a bad deal for Pennsylvanians.

Our other report takes apart the myth that severance taxes impede industry growth by taking a look at neighboring West Virginia, which has a severance tax and is experiencing significant new drilling activity, investment, and industry job growth.

Check out the reports on our web site. They're brief, easy to read and will open your eyes to what's happening with the severance tax in Pennsylvania.

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