King Of Severance Taxes? It’s No Longer Coal, But Gas

State lawmakers learned this week about a big shift in what generates the most severance taxes.

According to the Gas and Oil Association of West Virginia, natural gas has produced more than coal in severance taxes in four of the past five years.

Historically, coal generated the bulk of severance taxes. But the advent of hydraulic fracturing, or fracking, gave gas the advantage. 

Charlie Burd, the association’s president, showed lawmakers that in 2022 and 2023, gas sent twice as much revenue into state coffers as coal.

“And you can see, for many years, coal produced more dollars to the general revenue fund than we did,” Burd said. “But in the last two or three years, that’s sort of shifted.”

West Virginia ranks fifth in gas production, accounting for 8% of gas produced nationwide.

Burd said the demand for gas is strong, with exports to other countries and the rise in data centers and advanced manufacturing.