Industry experts visited the Statehouse to support legislation that would increase the severance tax on oil and gas companies.
Republican Rep. Matt Huffman of Lima says his bill would generate about $1.7 billion in net new revenue over the course of 10 years. The proposal is lower than previous plans by Gov. John Kasich.
Tom Stewart, executive vice president for the Ohio Oil and Gas Association, was one of the supporters to testify before a House panel Wednesday. He says the tax increase is at a level where the state can benefit while still encouraging development.
Stewart believes all Ohioans should support the continued production growth. As temperatures plunged, he says, natural gas prices skyrocketed in other states to the east while Ohio’s stayed low.
“It should have occurred to them yesterday morning when it was five degrees below zero," Stewart said. "Here we are at five degrees below zero across the state of Ohio but nobody ran out of natural gas. Matter of fact, supplies kept flowing to the consumer at a very affordable rate. If you were living in New York City, natural gas cash prices during that cold period snapped up to as high as $90.”
Revenue from the tax would fund the state’s regulatory framework, close up abandoned wells, and pay into the Income Tax Reduction Fund.