A Shale Gas severance tax? Think Again (Again)

Impact fee revenue from fracked natural gas wells in Pennsylvania jumped 21 percent in 2017 from 2016, reversing three years of declines, according to the state Public Utility Commission (PUC).

But the increase, brought on by rising prices and increased drilling activity — most welcome news to those who benefit from the revenue stream — could be blunted if those calling for the addition of a severance tax win the day, says a researcher at the Allegheny Institute for Public Policy.

“A severance tax has the potential to curtail production, causing a reduction in these payments as drilling will likely be reduced or shifted to neighboring states that are also above the Marcellus and Utica shale formations,” says Frank Gamrat, senior research associate at the Pittsburgh think tank…

 

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