Friday, August 19, 2011
A Good Return On Investment
Natural gas extraction in the Commonwealth is up up up!!
Gas production continues to skyrocket in Pennsylvania, with the latest six-month figures showing a 60 percent increase in output for the commonwealth's Marcellus Shale wells.
The more than 1,600 Marcellus wells currently in production put out a total of 432 billion cubic feet of natural gas in the first six months of the year, according to the figures provided to the state Department of Environmental Protection by drilling companies.
The more than 1,600 Marcellus wells currently in production put out a total of 432 billion cubic feet of natural gas in the first six months of the year, according to the figures provided to the state Department of Environmental Protection by drilling companies.
432 billion cubic feet! That's a lot of natural gas! Gas is priced at around $4.12 for 1000 cubic feet at the wellhead, so the drillers in six months have produced gas worth $1,779,840,000 if my math is correct (432 billion divided by 1,000 multiplied by 4.12).
With a severance tax of 7.5% of market value, the same as assessed by Texas, that translates into $133,488,000 (using the wellhead price) dollars in revenue for the state! And that's just the 1600 Marcellus wells, there's over 52,000 producing gas wells in Pennsylvania.
Oh wait, we don't have a gas severance tax. Governor Corbett received over 1.6 million dollars in campaign contributions from the gas industry, and he's so far refused to enact a severance tax. Pretty good return on investment there, the Governor was purchased for 1.6 million, and the industry gained an additional profit of nearly $133.5 million as a result.
I'd have rather that money gone to improving education, mass transit, and roads, than in improving the bottom line.
Labels: marcellus gas, tom corbett
