MDN Weekly Update – Nov 6, 2011: Should PA Tax Gas Drilling?

poll resultsAfter an initial rush of voting where it seemed MDN readers would not support the concept that it’s time to litigate for landowners’ rights in New York, the tide turned later in the week and a clear majority of NY landowners (and those who support them) have said it’s now time to sue the DEC to stop the delay tactics. It seems most people think three and a half years is enough time. The DEC’s draft rules are “good enough” and it’s now time to adopt them and move forward with drilling, according to MDN readers and last week’s poll.

Is it time for NY landowners to sue the DEC to allow fracking?

Yes (57%, 182 Votes)
No (43%, 136 Votes)

Total Voters: 318

What kind of fee/tax should PA assess on Marcellus wells, if any?

Pennsylvania lawmakers are close to completing new legislation that will strengthen rules for drilling in the Marcellus and Utica Shales, and assess a new “impact fee” on drilling. Gov. Tom Corbett, in just his first year in office, has remained steadfast against a severance tax on drilling because, as everyone knows, the money will disappear into the state’s budget hole to be used however politicians want to use it—mostly rewarding political friends with largesse and buying votes. Instead, Gov. Corbett’s advisory commission has recommended the state adopt an “impact fee,” which is a polite way of saying a tax. But most of this fee/tax will stay local, in the community where the well is drilled, to help with things like roads and first responders and police—things that start costing more when drillers show up. Seems a good solution to MDN.

The proposed plan that most likely will get adopted is that drillers will pay $40,000 the first year a well is drilled, $30,000 the second year, $20,000 the third year and then $10,000 per year in years 4-10, for a total fee of $160,000 per well drilled.

But many people who support a severance tax in PA point to other states like Texas and Wyoming and Alaska and say if oil and gas drilling is booming there and they can have a severance tax (that contributes a lot of money to the state budget), why shouldn’t PA? It’s a fair question. Those who support drilling in PA will say that Marcellus drilling is doing so well in the state precisely because there isn’t a tax on drilling—that drilling in PA is pulling drilling away from those other states because doing business in PA is more economically advantageous.

MDN wants to know what you think. Should PA adopt an impact fee? Or a severance tax? Or perhaps stick with no fees or taxes on drilling at all? Head on over to the right side of any page and cast your vote.

Below are the most recent “top 5” lists and the calendar of Marcellus related events for the next two weeks.

Happy reading,
Jim Willis, Editor

Five Most Viewed Stories This Past Week (Oct 30th – Nov 5th)

  1. Rex Energy Completes its First Utica Well in Western PA (11/2/11)
  2. NY Hydraulic Fracturing Advisory Panel Member Speaks Out (11/2/11)
  3. How Will NY Gov Cuomo Handle the Fracking Mutiny? (10/31/11)
  4. Major Discovery – Chesapeake Energy Strikes Oil (and Gas) in Ohio’s Utica Shale (7/29/11)
  5. Mystery Company Invests $2.14B in Chesapeake Utica Shale JV (11/4/11)

Five Most Viewed Stories Last 30 Days (Oct 6th – Nov 5th)

  1. Major Discovery – Chesapeake Energy Strikes Oil (and Gas) in Ohio’s Utica Shale (7/29/11)
  2. Ohio Utica Shale Permits Double in Last 3 Months (10/13/11)
  3. List of 78 Chemicals Used in Hydraulic Fracturing Fluid in Pennsylvania (6/30/10)
  4. New PA Study: No Link Between Fracking & Water Contamination (10/24/11)
  5. Belmont County, OH Landowners Sign Utica Shale Leases (9/19/11)

MDN Calendar (Nov 6th – Nov 19th)

Maryland

New York

Pennsylvania

Webcasts/Online