Ohio governor considers natural gas impact fee, higher severance tax
Posted January 11, 2012 in Press Releases
As the gas industry ramps up the extraction of gas from the Utica and Marcellus shales in Ohio, a proposal for increasing the natural gas severance tax in Ohio could come about in late winter.
The subject was raised Dec. 19 by Policy Matters Ohio.
"Part of preparation for the coming boom should include raising the severance tax rate to a level consistent with other energy states," said Wendy Patton, senior project director of the nonprofit, nonpartisan research group and author of the Dec. 19 report "Beyond the Boom: Ensuring Adequate Payment for Mineral Wealth Extraction."
As it happened, Ohio Republican Gov. John Kasich spoke of the gas industry later that same day at a year-end press conference.
Asked about the idea of increasing the severance tax, Kasich responded affirmatively.
The state plans to increase the severance tax on oil and gas, he said, as well as to impose an impact fee to help local communities with costs imposed by increased industrial activity.
Ohio's current severance tax on natural gas is levied on volume: $0.025 per thousand cubic feet. West Virginia's is levied on value, at 5 percent.
While it's hard to compare those two different taxes, a conversion to the "effective" rate