Cumberland Times-News

Local News

February 11, 2013

Legislation proposes natural gas severance tax

CUMBERLAND — A natural gas severance tax of 2.5 percent of the gross fair market value of the gas produced would be set if a bill sponsored by senators, including Sen. George Edwards, is passed by the Maryland General Assembly.

Senate Bill 879 would establish the tax and put the administration of the tax into the hands of the state comptroller. The bill would use some of the tax revenues to help fund monitoring, mitigation and remediation of the adverse impacts of natural gas drilling and exploration, the language of the bill states.

About 20 bills related to natural gas drilling have already been filed in Annapolis this year. Two of those bills would ban hydraulic fracturing to produce natural gas. One of the bills would ban the practice outright and another until certain studies are completed and other conditions met.

Gov. Martin O’Malley’s fiscal 2014 proposed budget includes $1 million in funding for Marcellus Shale natural gas extraction studies. Lack of funding for the studies has slowed the work of the governor’s Marcellus Shale Advisory Commission.

Some members of the commission are seeking extensive studies before any drilling occurs and want the industry to fund them.

Others, such as Edwards, have maintained extensive scientific evidence is already available gathered from states where drilling has occurred.

Marcellus Shale formations throughout the eastern U.S. harbor large untapped natural gas resources. The shale formations in Maryland are located only in Garrett and Allegany counties.

In order to get the gas trapped in the shale to the surface, chemicals, water and sand are pumped underground to break apart rock formations and free the gas. The process is called hydraulic fracturing, or “fracking.”

Contact Matthew Bieniek at mbieniek@times-news.com

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