Proposed severance tax increase removed from Ohio’s budget bill
Friday, April 17, 2015
On April 14, Ohio lawmakers got rid of Gov. John Kasich’s budget proposal that included an increase in the state severance tax on horizontal drilling, The Plain Dealer reports. The increased severance tax was intended to compensate for income-tax cuts.
Oil and gas industry representatives had voiced concerns about the increased severance tax, which would have taxed oil and gas sold at the head by 6.5 percent. Currently, oil per barrel has a 20 cent tax and natural gas is taxed 3 cents per thousand cubic feet.
According to Kasich’s plan, 80 percent of the money from the severance tax would be used for income-tax cuts. Twenty percent of the money would go to the eastern Ohio governments where the bulk of the state’s drilling is taking place.
Via: The Plain Dealer > Oil and gas tax hike in Ohio is dead for now, lawmaker says
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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.