Posted By: Jeremy Pelzer, Northeast Ohio Media Group
COLUMBUS, Ohio — The Ohio House of Representatives on Wednesday passed a sweeping overhaul of the state’s severance tax on oil and gas fracking after bumping up local governments’ cut of the proceeds.
Under the bill, which passed 55-35, Ohio would impose a 2.5 percent severance tax on horizontal oil and gas drilling, which has ramped up in the Marcellus and Utica shale formations that run deep underneath the eastern part of the state.
Currently, Ohio charges 20 cents per barrel of oil, which has a current market value of about $100. The tax on natural gas is 3 cents per thousand cubic feet, which sells for roughly $4.80.
Traditional vertical drillers would see their severance taxes cut in half under the legislation, which now heads to the Ohio Senate.