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Ohio Utica Shale

Kasich, drillers spar over new Ohio severance tax

By Bob Downing Published: July 13, 2012

Ohio Gov. John Kasich today held a Statehouse press conference to renew his call for a new severance tax on gas-oil drilling in Ohio.

He announced that his plan is being supported by Fred Dailey, the former director of the Ohio Department of Agriculture.

Kasich has proposed raising the taxes to take advantage of the drilling boom underway in eastern Ohio in the Utica shale.

The proposed tax increase has received a cool reception from some statehouse Republicans, who say they don’t want to do anything to jeopardize the growth of the industry in Ohio.

Kasich has proposed using the revenue from the increased severance tax to provide an income tax cut for Ohioans.

His proposal has gotten a cool reception from drillers.

Here is the latest response from Tom Stewart, executive vice president of the Ohio Oil and Gas Association:

"Though Ohio’s oil and gas producers continue to have concerns about Gov. Kasich’s proposal to increase the severance tax, we want to thank the governor for shedding light on a very important, but rarely discussed, aspect of increasing the severance tax — the impact on Ohio’s farmers, many of whom are landowners with royalty interests in oil and gas wells.

"When the governor discusses a severance tax increase, he often paints a picture of it applying only to big, out-of-state companies that appear to be cashing in on Ohio’s mineral riches. In fact, hundreds of homegrown Ohio-based energy producers and hundreds of thousands of Ohio landowners, in most cases farmers in economically depressed areas, will be burdened with a huge tax bill if the governor’s proposal comes to fruition. While we appreciate Fred Dailey’s kind regard for the oil and gas industry, we do not believe that other farmers and royalty owners will share his enthusiasm for a tax increase.

"Ohio’s oil and gas industry supports the governor’s goal of an income tax cut for hardworking Ohioans, but we believe the burden of funding the tax should not fall on Ohio’s landowners or on the state’s emerging, but yet economically unproven, shale industry.

"Despite the governor’s reassurances that oil and gas companies will continue to invest in Ohio’s oil and gas industry regardless of an increase in the severance tax, a recent survey of energy executives has the state falling from No. 2 in desirability to No. 14 for future investment.

"Ohio’s shale industry holds great promise, but we are very concerned that the governor’s proposal, which is too much and too soon, will place the economic future of many Ohioans at risk," he said in a statement..

 

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Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.