Ohio Governor John Kasich announced this week that he wants to increase the tax on gas and oil wells in the state. Even with the governor’s proposed increase, experts say Ohio is still cheaper for the drilling industry than most other gas-and-oil-rich states and that has Pennsylvanian’s worried.
Rachel Lundberg brings us the story:
In the hills of Susquehanna County, PA, farmers and others reaping benefits from the emerging gas and oil industry worry that drillers might get fed up with the state’s fees and rules and look next door to Ohio.
If you push them too hard and it gets too much, and if the state gets too greedy and starts requiring too much, they’re going to find a place where the dollars fits better.
That’s Jim Barbour, a third-generation farmer, who leased his land to the natural gas industry.
In 2012, Pennsylvania charged $50,000 dollars for every horizontal well – those are the wells that are being fracked for natural gas. And also…The Keystone state charged $10,000 for the more conventional vertical wells. Those figures will change for 2013 based on selling prices for natural gas, but won’t vary radically.
According to Ernst & Young, the national accounting firm, Ohio will tax drillers at about half the rate as Pennsylvania.
(Sound of compressor construction)
What you hear is the construction of a compressor station on Barbour ‘s property. When its up and working, the station will pull in gas from area pipelines, pressurize it and send it along to market. But just last week, Pennsylvania adopted a new rule limiting air emissions from compressor stations – and that doesn’t sit well with Barbour.
We were a lot less restrictive, too, but it just keeps getting worse.
Doug McLinko, a commissioner in the most-drilled area of Pennsylvania, Bradford County, shares Barbour’s concerns.
When you start taxing prosperity and growth, I’m damn scared that you’re going to chase the industry away.
Combined, fracking and vertical wells pumped in $200 million to Pennsylvania’s economy in 2012.
Under Kasich’s plan, revenue from the taxes on the gas and oil industry would build over time. By 2017, it’s predicted Ohio will rake in $413 million.
Caitlin Cook contributed to this report. For TheNewsOutlet.org, I’m Rachel Lundberg.