The IFO said Pennsylvania could collect less than 1 percent of the value of the production from shale-gas wells during their lifetime. Under the same scenario in neighboring West Virginia, the wells would generate nearly 12 times the tax revenue.
"Generally speaking, I think this report highlights what we've said for a while: The impact fee is low compared to other states," said Michael Wood, research director for the Pennsylvania Budget and Policy Center, a liberal-leaning Harrisburg think tank.
The Marcellus Shale Coalition, an industry trade group, was quick to denounce the report's analysis because it did not take into account other costs and taxes that the group said were comparatively high in Pennsylvania.
Pennsylvania is unique among gas-producing states in that it does not tax the volume or value of natural gas extracted, but assesses a uniform impact fee per well.
The authors of the impact fee, which was included in the 2012 oil and gas law known as Act 13, were careful not to call it a tax, but an assessment to compensate government for some of the social and environmental impacts of gas drilling.
The impact fee, which is collected and distributed by the state Public Utility Commission, varies according to the market price of natural gas. In 2012, the first year the fee was imposed, the rate was $50,000 per well. Last year, when gas prices were low, the rate was $45,000 per well.
In its first two years, the fee generated about $400 million in revenue, which was distributed to state agencies, municipalities, and counties. Local governments in shale-gas-producing areas receive the bulk of the funds, but every county gets a sliver.
Comparing Pennsylvania's impact fee with production or severance taxes in other states is a challenge because of the highly politicized nature of the debate - some analyses by advocacy groups tend to include or exclude items that reflect their biases.
