Don’t drive drillers away

An editorial from The Intelligencer/Wheeling News-Register 

WHEELING, W.Va. –Take a look at a map showing the Marcellus Shale and other geologic formations holding enormous quantities of natural gas. Then look at maps of other gas-bearing strata.

West Virginia is far from the only energy game in town. The Marcellus alone extends into several states. Many drillers in Ohio are focusing on the Utica Shale. In the West, the Bakken formation is being exploited.

Especially now, with gas prices depressed, the very last thing state officials should consider is action that could drive drillers out of West Virginia. Yet that very thing is being suggested.

Higher state severance taxes should be charged on ethane and other natural gas liquid, the West Virginia Center on Budget and Policy is urging. Those at the Morgantown-based think tank believe such taxes, levied on gas liquids shipping to processing facilities in other states, would encourage construction of ethane cracker plants here.

As has been pointed out, the idea could run afoul of constitutional provisions on restraint of trade among states. But the proposal is short-sighted – and possibly dangerous to the state’s economy – for other reasons.

One is that some out-of-state cracker plants may benefit many West Virginians. An example is the PTT?Global Chemical facility proposed for Belmont County. Beyond any doubt, it would be very good for Northern Panhandle residents.

Another concern ought to be the vast amount of gas available in other states. Adding yet another levy to West Virginia’s already considerable tax bill paid by gas drillers could spur some of them to go elsewhere.

Legislators who have had trouble balancing the state budget during the past few years may find the idea of new tax revenue appealing. But if it reduces drilling here, cutting off income from the existing severance tax, it would be no bargain.

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