Ashton Marra Published

W.Va. Oil & Gas Severance Tax Collections Double in 2014

Tower for drilling horizontally into the Marcellus Shale Formation for natural gas, from Pennsylvania Route 118 in eastern Moreland Township, Lycoming County, Pennsylvania, USA

Despite recent announcements of layoffs in the industry, the state is reporting severance tax incomes from oil and gas have doubled since 2013.

A review by the West Virginia Department of Tax and Revenue and the State Treasurer’s Office shows companies paid $188.3 million in severance taxes in 2014. That’s compared to the $79.2 million collected in 2013.

Ninety-percent of those dollars stay at the state level and are used to help balance the budget. A majority of the final ten percent goes to the gas producing counties. The rest of the funds are spilt between all counties and municipalities in West Virginia.

The Treasurer’s Office reports more than $13 million were paid to counties and cities during an October severance tax distribution. Four counties received more than $1 million in payment during that time, Harrison, Wetzel, Doddridge and Marshall Counties.

According to the head of the state’s oil and natural gas association, the increase in the oil and natural gas severance taxes is a direct result of increased production in the Marcellus and Utica Shale. Those rock formations are estimated to contain more than 100 trillion cubic feet of recoverable natural gas.