Pennsylvania Approves Tax on Natural Gas Extraction

In a historical step the Pennsylvania House approved a bill for a first ever tax on natural gas extraction.

The bill plans to split the proceeds from the proposed mining tax between the state's general fund, environmental programs and local governments. If it does get passed into law it will be the first such tax to get implemented in the state

The fate of the bill is now in the hands of the Republican controlled state Senate. It is a well documented fact that drillers have contributed to campaign donations of the Republican Senators in no small measure. In fact Republican Senators are favoured seven to one over their Democratic counterparts. Drilling companies are said to have donated more than $400,000 to the senators in recent years.

The environmental advocacy group Penn Future praised the 104-94 vote which passed the bill as reasonable and robust tax. However the leading GOP senator had commented last week that it contained a high tax rate and did not devote enough money to communities in the shale region. It is natural to assume that the bill will not be passed into tax without some changes.