Drilling Tax Could Exempt Most Gas Co.'s

Study finds 2/3 or more gas wells would be exempt

HARRISBURG – According to a PA Budget and Policy Center study released yesterday, if Pennsylvania did adopt a tax on natural gas extraction, almost two thirds of it would be exempt.

Pennsylvania is the only major gas producing state that does not have an extraction tax.

Most lawmakers want to exclude what they call low-producing wells from being taxed, which would include shallow wells and deep Marcellus shale wells later on in their lifespan.

Gas wells typically produce the most gas when they are first drilled, and the gas industry is also pushing for tax exemptions during these periods, which they say will help them to offset the cost of drilling the wells in the first place.

The study indicates that if both exemptions are included in the tax law, most companies would only pay tax for nine of the average 40 years a gas well lasts.