 Unconventional energy, taxation, and interstate welfare: An analysis of Pennsylvania's severance tax policyKyle Hoy and Douglas Wrenn () Energy Economics, 2018, vol. 73, issue C, 53-65 Abstract: Natural gas production from unconventional sources has increased over the past decade. A significant portion of this increase has come from output in the Marcellus region of Pennsylvania. This output has altered gas markets and repositioned Pennsylvania as a major gas exporter. It has also put Pennsylvania at odds with other states as it is one of a few without a formal severance tax on extractive resources. In this paper, we combine results from a structural demand model with a two-sector trade model to analyze the interstate welfare impacts of Pennsylvania's current severance tax proposal. Our results demonstrate that most of the welfare losses from this proposed policy are likely to be shifted to residents in other states. We also demonstrate how fluctuations in gas prices can substantially reduce tax revenue. These findings have important implications for both Pennsylvania and U.S. energy policy given the significant rise in energy production from new sources throughout the U.S. Keywords: Unconventional energy; Energy demand; Tax shifting; Welfare (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:73:y:2018:i:c:p:53-65 DOI: 10.1016/j.eneco.2018.05.002 Access Statistics for this article Energy Economics is currently edited by R. S. J. Tol, Beng Ang, Lance Bachmeier, Perry Sadorsky, Ugur Soytas and J. P. Weyant More articles in Energy Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.