Ohio severance tax remains an issue with industry, governor
Thursday, April 16, 2015
Opinions vary when it comes to Ohio Gov. John Kasich’s proposed increased severance tax on shale oil and gas drillers. The Vindicator reports that the oil and gas industry largely opposes the severance tax at a time when oil and gas prices are low, but Kasich feels that drillers have gotten a “free ride” for the past four years while they explored the Utica and Marcellus shales.
Oil and gas industry representatives argue that increasing the severance tax at a time when oil and gas prices are low is not a good idea. Kasich, on the other hand, believes that drillers should have to pay in order to extract natural resources from the shale deposits that lie under Ohio.
The state’s current severance tax is 20 cents per barrel of oil and 3 cents per thousand cubic feet of natural. The proposed severance tax increase would amount to 6.5 percent of the price of the oil or gas sold at the wellhead.
Via: The Vindicator > Drop in oil, gas prices fuels debate over severance taxes
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Shale FAQ
What is fracking?
Fracking is a slang term for hydraulic fracturing. Fracturing is a process by which highly pressurized fluid is pumped thousands of feet into the ground to fracture rock formations. The goal is to release the natural gas that’s locked inside the rock.
Is it safe?
What most concerns people about fracturing is ground water contamination. The worry is that fractures underground, caused by the process, will extending upwards and into aquifers, releasing gas and chemicals into the ground water supply. There’s been no confirmed reports of such a thing happening. Though surface spills and drill site blowouts can lead to localized environmental concerns.
Will my water catch on fire?
Flammable water is caused by the release of methane gas into a drinking water supply. Methane gas occurs naturally and can be released by any kind of drilling, including water wells. In Pennsylvania officials fined Chesapeake Energy $1 million for contaminating ground water with methane. It was determined that the company had not properly cemented it’s boreholes and gas migrated up the well, between rock and into aquifers.