The Ohio Department of Natural Resources reported over a 200% increase in oil production, and more than a 350% increase in natural gas production, from 2013 to 2014.

The Ohio Department of Natural Resources (ODNR) last week released fourth quarter production numbers for oil and gas, showing strong production growth in the state. In the fourth quarter of 2014, the state reported oil production of 3.56 MMBO and natural gas production of 164.82 Bcf. That represents a 147% increase from its fourth quarter 2013 oil production of 1.44 MMBO, and a 282% increase in natural gas production of 43.12 Bcf from fourth quarter 2013 production.

Oil production increased by more than 0.55 MMBO and gas by more than 33 Bcf compared to third quarter 2014. The report also lists 828 wells, 779 of which reported production, resulting in a 15% increase in wells for the fourth quarter. Forty-seven wells reported no production as they are waiting on pipeline infrastructure.

Governor seeks to increase severance tax

The increases in production in Ohio have bolstered arguments by Republican Gov. John Kasich that the industry could withstand a tax increase. Kasich wants to increase the taxes on each barrel of oil by $0.20 in order to reduce the state’s income tax while still funding the budget, reports the Associated Press. This marks the third time that Gov. Kasich has tried to increase severance tax.

Kasich has said that he is “disappointed by those who say the severance tax reform will kill the industry. That’s a joke… Our severance tax will still be competitive with our energy-rich states.”

The $72.3 billion, two-year state operating budget calls for a fixed rate on crude oil and natural gas of 6.5% at the wellhead, and 4.5% for natural gas and natural gas liquids sold downstream.

The announcement that Kasich hopes to raise the severance tax is receiving push-back from the oil and gas industry. Chris Zeigler, executive director of the Ohio arm of the American Petroleum Institute (API), said, “The governor’s latest proposal to increase taxes on our industry does not account for the current economic environment that is directly impacting oil and natural gas developers in Ohio.”

In a separate announcement, Columbia Gas of Ohio said that customers purchasing natural gas through its Standard Choice Offer program are seeing some of the lowest March gas costs in more than a decade –  $0.43 per 100 cubic feet this March versus $0.61 for the same amount last March.

President Obama proposed a similar measure last month, asking Congress to eliminate certain tax breaks to the oil and gas industry. The White House Office of Management and Budget (OMB) estimates would “raise” $4.1 billion in 2016 and $45.5 billion from 2016 to 2025, all of which would go to the government. The API estimates the measure would cost independent oil companies roughly $95 million over the course of the next decade.

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