Industry rep predicts tax windfall from hydrofracking
A single natural gas well tapped through the drilling method known as horizontal hydraulic fracturing, or hydrofracking, could generate significant tax revenue for Ulster County local governments, school districts, libraries and fire companies, an industry representative says.
Scott Cline, a petroleum engineer who spoke in favor of hydrofracking as a panelist at an Ulster County Community College forum last month, said the assessed value of the drilling operations would be based in part on a rate set by the state on the number of cubic feet of natural gas produced. Separately, local governments would assess property associated with the operations.
At last month’s forum, Cline, representing the Independent Oil and Gas Association of New York, said a standard Pennsylvania well in the Marcellus Shale region, which extends to the western Catskills of Ulster County — produces 3 million cubic feet of natural gas per day. On that basis, he applied the low end of New York state’s assessment rate of $9.80 to $12.12 per 1,000 cubic feet of natural gas drawn; an equalization rate of 57 percent — recognizing that many municipalities are not assessing at full value — and then applied property tax rates for the Otsego County town of Worcester.
One that basis, Cline said a well would generate $50,083.04 in taxes for the town, $29,235.60 for the county, $181,192.96 for the school district, $943.31 for a library district, and $13,660.54 for a fire district, for a total of $275,115.45 in the first year.
to read more: http://dailyfreeman.com/articles/2011/06/22/news/doc4e014ce21eb5e414930548.txt?viewmode=fullstory
Scott Cline, a petroleum engineer who spoke in favor of hydrofracking as a panelist at an Ulster County Community College forum last month, said the assessed value of the drilling operations would be based in part on a rate set by the state on the number of cubic feet of natural gas produced. Separately, local governments would assess property associated with the operations.
At last month’s forum, Cline, representing the Independent Oil and Gas Association of New York, said a standard Pennsylvania well in the Marcellus Shale region, which extends to the western Catskills of Ulster County — produces 3 million cubic feet of natural gas per day. On that basis, he applied the low end of New York state’s assessment rate of $9.80 to $12.12 per 1,000 cubic feet of natural gas drawn; an equalization rate of 57 percent — recognizing that many municipalities are not assessing at full value — and then applied property tax rates for the Otsego County town of Worcester.
One that basis, Cline said a well would generate $50,083.04 in taxes for the town, $29,235.60 for the county, $181,192.96 for the school district, $943.31 for a library district, and $13,660.54 for a fire district, for a total of $275,115.45 in the first year.
to read more: http://dailyfreeman.com/articles/2011/06/22/news/doc4e014ce21eb5e414930548.txt?viewmode=fullstory
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