Fact Checking Claims About Pennsylvania and West Virginia Drilling

Pennsylvania's Acting Revenue Secretary Dan Meuser told lawmakers in a budget hearing last month that only 20 Marcellus Shale gas wells have been drilled in West Virginia since that state enacted a drilling tax, while Pennsylvania has had more than 600 such wells drilled.

As we explained in a recent policy brief, that’s not quite accurate.

According to World Oil Online, West Virginia led the nation in new gas wells in 2010, along with Texas and Arkansas — all of which have drilling taxes. Pennsylvania, without a drilling tax, came in sixth, with 833 new wells.

West Virginia has had significant activity in the Marcellus Shale in particular. As of October 2010, West Virginia had 1,217 Marcellus Shale wells completed, with 862 new wells permitted.

In 2009, Pennsylvania and West Virginia were running neck in neck in total gas production. That same year, West Virginia also collected $85 million in drilling tax revenue and another $97 million in property taxes, while Pennsylvania collected neither.

Here's a table showing the change in gas wells for the top six states:

Total Gas Wells

State 2009 2010 Gain/(Loss) % Change
West Virginia 50,602 52,498 1,896 3.7%
Texas 93,507 95,014 1,507 1.6%
Arkansas 6,225 7,507 1,282 20.6%
Kentucky 16,909 18,001 1,092 6.5%
Virginia 6,224 7,158 934 15.0%
Pennsylvania 56,636 57,469 833 1.5%
Total US 490,142 486,862 (3,280) -0.7%
Source. World Oil Online

What's missing?

Was this just a flat out lie, or is there some kind of trick that they're using to categorize "new gas wells" in a way that makes the #'s seem smaller in West Virginia?

The ridiculous thing

Any claims that extraction taxes will scare off gas companies ignores one salient fact: the gas is *here.* Whether or not PA has a gas tax makes no difference- if gas companies want to drill for it, they need to do so in PA. It's not as if they can set up shop in, say, NJ- the Marcellus Shale doesn't exist there.

In effect, PA has the gas companies over a barrel, since they have no choice but to drill in PA if they want to get the gas that's here. But, since the gas companies donated so heavily to the Corbett campaign, taxing them is off the table. This is the same reason, of course, that taxing the rich f**ks who screwed the economy up in the first place is off the table: they own each political party, the Dems just somewhat less so that the GOP.

Cynical, me?
-Z

Drilling

It seems that there needs go be more well drilled as we are going in the wrong direction. Also, every state that has these wells should be getting some of the funding. It doesn't make sense.

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