On February 11, 2015, Pennsylvania Governor Tom Wolf proposed to implement a severance tax on natural gas extraction as part of his legislative proposals for an Education Reinvestment Act. The proposals enact a 5% severance tax on the value of the gas and natural liquids, plus 4.7 cents per thousand cubic feet of gas extracted – modelled after the severance tax in West Virginia.
As the Joint Hearing of the Senate Environmental Resources & Energy Committee and Senate Finance Committee on the proposed severance tax on natural gas was taking place on June 1st, 2015 in Harrisburg, various representatives and political figures debated and discussed the relevance of such tax proposition.
In her testimony, Acting Secretary for the Pennsylvania Department of Revenue, Eileen McNulty stated that “the tax will only apply to gas severed from unconventional formations using the technology generally known as hydraulic fracturing, or fracking”. She also mentioned that “since Pennsylvania exports a significant amount of the natural gas it produces, an estimated 80 percent of the tax will ultimately be paid by non-Pennsylvanians, according to the Independent Fiscal Office”.
Written by Chloe Marie - Research Fellow