Pennsylvania Weighs New Tax on Natural Gas Drilling

Lawmakers facing a $1.5 billion budget gap in Pennsylvania are considering imposing a new tax on natural-gas production, one of several drilling-boom states wrestling with how much to tax the maturing industry.Republican Gov. Tom Corbett has said a so-called severance tax, which drillers pay on the value of the gas taken from a well, could kill much-needed jobs. But his position recently has begun to soften.”The governor has remained publicly vocal that he does not like it,” Corbett spokesman Jay Pagni said. “He also recognizes that companies should pay their fair share. All options will be considered.” Raising taxes on booming oil-and-gas output is tempting for states hungry for new sources of revenue. In 2012, Pennsylvania’s gas production grew 72% over the prior year, far outpacing other states, according to the federal Energy Information Administration. On the list of the nation’s top gas producers, it leapt to No. 3 in 2012, from No. 7 a year earlier, lagging behind only Texas and Louisiana.The Marcellus Shale Coalition, a trade group representing gas developers in Pennsylvania, said a new tax could endanger that rapid development. “Elected officials should not unnecessarily curb this positive progress with uncompetitive, short-sighted policies,” said Dave Spigelmyer, the group’s president.Similar debates have cropped up across the country.

via Pennsylvania Weighs New Tax on Natural-Gas Drilling – WSJ.

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