Pennsylvania Gov. Wolf’s severance tax meets opposition
Sunday, March 29, 2015
Pittsburgh Post-Gazette PowerSource reports that Pennsylvania Gov. Tom Wolf is proposing a Marcellus Shale severance tax on oil and gas drilling, while the largely Republican state Senate and House of Representatives wants to deal with other issues first.
Pipelines in the Marcellus Shale region haven’t been able to keep up with the production of natural gas, so prices have been depressed.
Chief of staff Drew Crompton, for Republican state Sen. Joe Scarnati, says that the problem with the severance tax lies in the tax increases that Wolf has proposed. Pennsylvania is the only state with major oil and gas production that does not have a severance tax.
From Pittsburgh Post-Gazette PowerSource:
“The severance tax proposal calls for a 5 percent tax on the value of the natural gas extracted from wells, 4.7 cents per thousand cubic feet (Mcf) on the volume of the natural gas, and a 5 percent tax on the value of natural gas liquids produced.”
Via: Pittsburgh Post-Gazette PowerSource > Pennsylvania lawmakers dig in on natural gas severance tax
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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.