Bill Would Allow Tax on Gas Drilling Rigs
Measure would also provide tax credit for purchase of alternative
fuel vehicles
Wheeling WV Intelligencer
17 February 2011
By Casey Junkins, Staff Writer
As West Virginia legislators ponder whether to enact new regulations on
Marcellus Shale drillers, a new bill would tax drilling rigs and allow
tax credits for alternative fuel vehicles.
"Currently, there is concern that rigs are not being taxed in a uniform
and consistent manner," said Delegate Scott Varner, D-Marshall. "The
bill references a national standard for the tax departments to use to
provide a uniform method."
Titled "The Marcellus Gas and Manufacturing Development Act," the bill
is sponsored by Delegates Varner and Mike Ferro, both D-Marshall; Dave
Pethtel, D-Wetzel; Ryan Ferns, D-Ohio, and Erikka Storch, R-Ohio.
This bill is in addition to several other pieces of legislation working
their way through the state House and Senate, which deal with a gamut
of issues ranging from increasing fees for drilling wells to deciding
whether gas companies should be able to pool mineral owners' properties
by force.
There are now many gas rigs drilling throughout the Northern Panhandle,
including Ohio County, with plans for drilling in Brooke County
progressing. Marshall, Wetzel and Tyler counties have seen multiple gas
rigs in place for several months.
The new bill also provides 35 percent credits for the purchase of
alternative fuel vehicles, while providing a 50 percent credit for
converting a conventional engine to run on alternative fuel.
It would also give credits for building alternative fuel filling
facilities of up to 50 percent.
"The Legislature further finds that the wholesale cost of fuel for
certain alternatively-fueled motor vehicles is significantly lower than
the cost of fueling traditional motor vehicles with oil-based fuels," a
clause in the bill reads.
Another provision in the legislation would ensure that any future
ethane cracking plants are taxed at the same rate as other
manufacturers, as Varner noted, "The bill provides for parity with
regard to taxation as well as incentives the same as for other types of
manufacturing."
Ethane is one of the prevalent natural gas liquids - along with
propane, butane and pentanes - found in the "wet" Marcellus Shale gas
of northern West Virginia. Tuesday, officials with Bayer Corp. said
they hope to build an ethane cracker - a plant that would use ethane to
produce ethylene, a component of plastic - in the Mountain State, with
the property adjacent to its New Martinsville facility being a possible
location.
Officials said the project could eventually yield hundred of jobs.