During a press conference devoted to his Mid-Biennium Budget Review, Ohio Governor John Kasich unveiled several proposals affecting the natural gas industry. Governor Kasich?s proposals address a wide range of topics, with the headline item being an income tax reduction of $900 million to $1 billion during the next five years financed in part by an increase in severance taxes on oil, natural gas and natural gas liquids production. Several other proposals impacting the oil and natural gas industry were also announced during the press conference. These proposals include updating well construction standards, requiring disclosure of the components of hydraulic fracturing solutions, updating pipeline safety regulations, streamlining permitting procedures, and promoting the use of natural gas as a transportation fuel.
The Governor?s severance tax proposal would increase the tax on oil and natural gas liquids produced from horizontal wells to 1.5% for a well?s first year of production and 4% thereafter, and 1% for natural gas production. A $25,000 per well impact fee ultimately remitted to local governments is also proposed.
Governor Kasich?s plans are expected to entail multiple bills which will be vetted by several committees during Ohio?s spring legislative session.
A more detailed description of the Governor?s Energy Policy proposals is available at http://www.governor.ohio.gov/PrioritiesandInitiatives/MidBiennialReview.aspx