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Wednesday, January 29,2014

Oil & gas tax dollars should stay in eastern and southeast Ohio

By State Sen. Lou Gentile

Photo Caption: State Sen. Lou Gentile.

Since taking office, Gov. John Kasich has promised to raise Ohio's severance tax on oil-and-gas producers to provide income tax relief to all Ohioans. Throughout this debate, I have always insisted that our part of Ohio receive its fair share of any new tax revenue on oil-and-gas production.

Unfortunately, pending legislation in the Ohio House, HB 375, which proposes a new severance tax on oil and natural gas production through the use of horizontal drilling, doesn't do that. Horizontal wells are being drilled throughout eastern and southeastern Ohio, mostly in what is known as the Point Pleasant, Utica or Marcellus shale formations.

The bill would impose a tax rate of 1 percent for the first five years and then a rate of 2 percent thereafter. Proceeds from the tax would be used to fund necessary regulatory activities, such as plugging orphaned and idled oil-and-gas wells, and to provide income tax cuts to all Ohioans, many of whom do not live in oil-and-gas producing counties.

In its current form, the legislation does not invest back into the communities that are developing oil and gas. This is of great concern, and it is critical that the final bill contain a mechanism that will reinvest those tax dollars into our region.

It is no secret that the economy in eastern Ohio has struggled for many years. We now have a unique opportunity to capitalize on an abundant natural resource that sits right below our feet. We cannot miss this chance to rebuild our economy and leave behind a legacy for future generations.

Industry representatives have testified that the new tax they are proposing could generate nearly $2 billion over 10 years. There is so much we can do with the financial resources this tax would generate. A portion of those funds could be used to improve our infrastructure, train our workforce, provide public and safety services, and invest in new technologies to create local jobs and protect our environment.

As the legislation moves through the Ohio House, I will be following it very closely and talking with my colleagues in the legislature on both sides of the aisle about how we can work together to ensure that our part of Ohio gets its fair share. When the bill reaches the Senate, I intend to take a leadership role on behalf of all the counties in eastern and southeastern Ohio.

This is a monumental issue for our area and our citizens. In my opinion, this legislation will have a lasting impact on our economy for years to come. It is imperative that we as a region engage in this discussion and make our voices heard.

As this debate continues, I remain committed to doing everything I can to advocate for our communities to ensure that we are not left behind.


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Here's a related issue: accessibility to natural gas.

There's a gas well right across the road from my house--within a couple of hundred yards--but I cannot connect to a natural gas supply line and must instead rely on (much more expensive) propane.  If natural gas is really going to be the "transition fuel" we rely on for the next several decades, rural residents (especially those whose land and view are negatively affected by drilling and production) should be assured a right to purchase gas as cheaply as the people in whatever cities our gas supplies.  This is an issue rather similar to the one addressed by Rural Electrification in the 30's and 40's.  Does that make sense to you, Sen. Gentile?