Giving Away the Store: A Marcellus Shale Fact Check

The Pennsylvania Legislature is debating a Marcellus Shale impact fee today, but unfortunately both the House and Senate appear to be playing a game of limbo to see how low they can go on a drilling fee rate.

Governor Tom Corbett’s proposed drilling impact fee, contained in HB 1950, would collect $160,000 over the 50-year life of an average Marcellus Shale gas well, the equivalent of a 1% rate. Senator Joseph Scarnati’s SB 1100, as amended on November 14, would raise $360,000 over the life of an average well, the equivalent of 2.2%.

A comparable well in Texas would raise $878,500 – five times more than Governor Corbett’s plan and nearly two-and-a-half times more than SB 1100. Even an industry-supported proposal from August 2010 would collect more than these plans.

Other drilling tax and fee plans, proposed by Representatives Tom Murt and Gene DiGirolamo and Representative Marguerite Quinn, would put Pennsylvania more in line with other energy-rich states, assessing effective rates between 4.4% and 4.6% over the life of an average well. The average Marcellus Shale gas well in Pennsylvania is projected to generate $16 million over its life.

Check out the Pennsylvania Budget and Policy Center's recent fact check on the Marcellus Shale tax and fee plans that are now before the General Assembly.

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