Pennsylvania Gov. Tom Wolf on Jan. 31 proposed a tax on extracting natural gas to pay for his plan to spend $4.5 billion over the next four years to improve the state's infrastructure.
The state legislature, however, has refused to approve the tax over the past couple of years.
Wolf said Pennsylvania is the only state in the country without a severance tax on extracting natural gas.
Pennsylvania is the second biggest gas-producing state behind Texas. The state produces about 18 billion cubic feet per day (Bcf/d) from the Marcellus and Utica shale basins, which is a little over 20% of the nation's total gas production.
One billion cubic feet of gas is enough to supply about 5 million U.S. homes for a day.
"With every passing year our state is losing out on the opportunity to reinvest the benefits of these resources to stimulate out economy and move Pennsylvania forward," Wolf said.
The state's gas industry, however, said the tax is not necessary since the state already has a per well impact fee.
"Pennsylvania's tax on natural gas—the impact fee—generates hundreds of millions of dollars annually for critical infrastructure programs," said Marcellus Shale Coalition President David Spigelmyer, adding another energy tax will cost consumers and hurt jobs.
The proposed tax would increase if the price of gas rises and would start March 1, 2020.
The biggest producers in Pennsylvania include units of EQT Corp. (NYSE: EQT), Chesapeake Energy Corp. (NYSE: CHK), Cabot Oil & Gas Corp. (NYSE: COG), Range Resources Corp. (NYSE: RRC) and Southwestern Energy Co. (NYSE: SWN).
Wolf said he wants to spend the money on high-speed internet access, storm preparedness, disaster recovery, business development, energy infrastructure and transportation projects.
Recommended Reading
2023-2025 Subsea Tieback Round-Up
2024-02-06 - Here's a look at subsea tieback projects across the globe. The first in a two-part series, this report highlights some of the subsea tiebacks scheduled to be online by 2025.
Subsea Tieback Round-Up, 2026 and Beyond
2024-02-13 - The second in a two-part series, this report on subsea tiebacks looks at some of the projects around the world scheduled to come online in 2026 or later.
TotalEnergies Rolling Out Copilot for Microsoft 365
2024-02-27 - TotalEnergies’ rollout is part of the company’s digital transformation and is intended to help employees solve problems more efficiently.
TGS, SLB to Conduct Engagement Phase 5 in GoM
2024-02-05 - TGS and SLB’s seventh program within the joint venture involves the acquisition of 157 Outer Continental Shelf blocks.
StimStixx, Hunting Titan Partner on Well Perforation, Acidizing
2024-02-07 - The strategic partnership between StimStixx Technologies and Hunting Titan will increase well treatments and reduce costs, the companies said.