Rule number one about severance tax, is that you never talk about severance tax.
Such is the case in Pennsylvania's oil and gas industry.
In researching Sunday's story on the Keystone State's lack of a tax that exists in all other major oil, gas and mineral producing states, I had conversations with a handful of company executives – very short conversations.
None wanted to go on record talking about or even alluding to the severance tax. If legislators and the general public aren't talking about a tax that would dip into their natural gas revenue, they sure as heck didn't want to bring it up.
Steve Rhoads, executive director of the Pennsylvania Oil and Gas Association, did address the issue even though his understanding of the tax structure in other states was a not complete.
A gas company executive did admit that, realistically, a Pennsylvania severance tax was coming, eventually. But he said the state needn't rush it into the books. The exploration of Marcellus Shale is in its infancy, he noted. The few holes that have been drilled are waiting for pipeline to collect the gas.
It could be three years until the gas is rising from Marcellus in large amounts, he said.
That gives legislators plenty of time to work out the fine print.
--- David Falchek
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