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Maryland Waivers On Marcellus Shale Gas Drill-And-Tax Decision

Maryland Waivers On Marcellus Shale Gas Drill-And-Tax Decision
State lawmakers politicize the issues while neighboring states drill and pump Marcellus shale gas full bore.

Farmland owners in western Maryland's Garrett and Allegany counties can see Marcellus shale gas drilling rigs light up like Christmas trees across the borders in West Virginia and Pennsylvania. But there'll be no drilling contracts under their Christmas trees this year and quite possibly the next. The grinches of Annapolis have seen to it.

Earlier this year, Gov. Martin O'Malley appointed a 14-member commission to study the drilling issue, with a final report not due until 2014. While the report may be finalized before that, central Maryland lawmakers are already politicking to "tax the living daylights out of it," as the Marcellus Drilling News website reported yesterday.

NO MARCELLUS 'CHRISTMAS' IN WESTERN MARYLAND: Maryland lawmakers and the Governor may debate the merits and taxing potential of allowing Marcellus shale gas drilling until 2014.

Garrett County officials are already proposing a 5.5% county tax on any extracted Marcellus shale gas. "The question is, if you already have 5.5%, what do you go above that?" says State Senator George Edwards, R-Allegany & Garrett. Edwards, who is on the state commission, adds that "The most I would even consider would be a total of 10%, which would mean 4.5% for the state."

The higher the tax, the less money that will go to landowners in the form of leases and gas royalties, he adds. "You got to be careful how much because whatever you put on that end takes away from the owners of the gas, which are mainly local people who've owned these gas rights for years."

Maryland State Delegate Heather Mizeur (D-Montgomery County), is also on the governor's gas commission. She has proposed legislation to ban Marcellus shale gas drilling in the state until it is determined that it won't not taint water.

"We expect robust support," Mizeur notes. "The fuel source isn't bad. We're just concerned about the extraction (horizontal drilling and fracking) method."

Mizeur also is reportedly open to a much higher state-level tax.
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