Hagan backs oil and gas tax

An application for an oil and gas drill site in Frankling Township, Ohio was received.

State Rep. Bob Hagan, D-Youngstown, has introduced a bill that would add a severance tax on oil, natural gas and condensate extracted from horizontal drilling.

According to a news release, House Bill 212 would enact a 7.5 percent tax, with the bulk of the revenue going to Ohio communities impacted by drilling activity.

“Ohio’s severance tax is a pittance compared to other states with major shale drilling activity,” said Hagan. “We need to update the severance tax rate on horizontal drilling to ensure that our precious natural resources are not extracted without appropriate compensation.”

Other major shale states, including Oklahoma, Texas, and North Dakota, have severance tax rates that range from 7 percent to 11.5 percent, and collect anywhere from hundreds of millions to billions of dollars in revenue each year, the release states.

Preliminary estimates show Ohio could collect about $400 million in 2014 and nearly $1 billion over five years.

As part of the severance tax bill, some revenue would be diverted to conservation and environmental priorities related to fracking.

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