Having welcomed Marcellus shale drillers with open arms, Pennsylvania now thinks it might be a good idea to pass a tax on revenue from Marcellus wells. The Times-Tribune reports that the gas industry is seeing Pennsylvania's newfound zeal for a severance tax as an opportunity to get something they want: So-called "forced pooling," a regulation that would allow drillers to recover gas from under the feet of landowners who don't sign gas leases. And the industry is taking a few other hostages as well:
As part of severance tax discussions, the industry also wants to limit municipal ordinances that attempt to regulate where gas drilling can occur - a development spurred by a state Supreme Court decision last year that opened the door for municipalities to have some control over where gas wells are located through zoning.
"We're willing to work with municipalities, but we're seeing ... an extraordinary number of ordinances that are coming into play that basically zone out development completely," [Chesapeake Energy's David] Spigelmyer said. "We want to make sure we don't have ordinances in place that basically remove your rights."
Negotiations over a severance tax are at the center of ongoing state budget decisions, and Mr. Spigelmyer said Monday a Pennsylvania tax needs to look like those in other, competing shale-gas producing states.
Word to state policymakers: The time to enact a severance tax is before the drilling rigs arrive.
There really isn't a better scientific explanation of forced pooling available on the Internet than the famous Milkshake Scene from There Will Be Blood. If you haven't seen it, enjoy. (You'll have to sit through a short video ad.)
