Tall Tales about Deep Wells: Yes, Virginia, There is a Natural Gas Boom in West Virginia

From the Pennsylvania Budget and Policy Center (http://www.pennbpc.org):


The natural gas industry has argued that Pennsylvania is unique in seeing a surge in Marcellus Shale gas wells and that a tax will impede growth. In fact, neighboring West Virginia is also experiencing significant new drilling activity and investment, while creating jobs. But unlike Pennsylvania, it is also collecting new tax revenue. West Virginia has levied corporate, severance, and local property taxes on natural gas extraction for many years, yet production has been higher than in Pennsylvania and continues to increase.


The natural gas industry has been spinning tales about the impact of a Marcellus Shale severance tax in Pennsylvania. In a series of reports throughout the month of September, the Pennsylvania Budget and Policy Center is going to set the record straight with our new series, “Tall Tales About Deep Wells.”


The first “Tall Tales” report looks into drilling and production activity in neighboring West Virginia and finds:


  • As of 2009, more Marcellus Shale wells have been drilled in West Virginia than in Pennsylvania;
  • West Virginia out-produced Pennsylvania in natural gas by 24% in 2008 (the latest data available);
  • Permitting applications in West Virginia are outpacing WVDEP’s ability to process them;
  • Major producers, including Chesapeake, EQT, CONSOL, and Cabot, are targeting the Marcellus Shale in West Virginia and finding it to be highly productive;
  • Drilling activity adds millions of property and severance tax dollars each year to West Virginia’s state and local governments.

If natural gas producers can pay a severance tax in West Virginia (and every other state with higher production than Pennsylvania) and still be competitive, there is no reason to think Pennsylvania would be different.


Tall Tales about Deep Wells will be a series of reports addressing some of the myths and misconceptions that are circulating around the state as the October 1st deadline approaches for enacting a severance tax on natural gas extraction.


View the Full Report at http://www.pennbpc.org/tall-tales-about-deep-wells.

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