We Pay the Gas Bill. They Keep the Profit
Pennsylvania needs a fair severance tax on natural gas.
Rep. Tarik Khan December 17, 2025
As submitted to the Roxborogh Review, East Falls Now and Chestnut Hill Local.
By State Rep. Tarik Khan
Texas is widely seen as the nation’s energy giant, but Pennsylvania is close behind. We are the second-largest natural gas producer in the country, producing only about one-third less gas than Texas.
But unlike the Lone Star State, Pennsylvania does not get paid what we’re worth for our natural resources. Not exactly a bastion of liberalism, Texas raises more than $2 billion a year from its gas severance tax. A severance tax is simply a fee paid when natural gas is taken out of the ground. Pennsylvania, meanwhile, is the only major gas-producing state without a severance tax on natural gas. That’s a choice, not bad luck.
Almost every other energy state gets this right. Texas, Oklahoma, and Louisiana all impose severance taxes of at least seven percent on oil and gas production. They use that revenue to invest in schools, infrastructure, and long-term public priorities. Pennsylvania does not.
That is not common sense. It is a bad deal for Pennsylvanians.
That is why I am introducing legislation, alongside Representative Chris Pielli of Chester County, to finally establish a fair severance tax on natural gas in Pennsylvania. The goal is simple: to make sure Pennsylvanians receive a reasonable return when gas is extracted from our land.
A severance tax is not about shutting down the energy industry or picking ideological fights. It is about fairness. When private companies profit from a public resource, the public deserves a fair return. That principle applies whether the resource is labor, gold, or natural gas. Pennsylvania should not be the exception.
Done right, a fair severance tax could generate hundreds of millions of dollars each year. That revenue gives Pennsylvania real choices.
First, we can invest in the future. Severance-tax revenue can support clean, fossil-free energy, energy efficiency, grid modernization, and reliable public transportation, including SEPTA and transit systems across the Commonwealth. These investments reduce pollution, lower long-term costs, and help Pennsylvania compete in a cleaner energy economy.
Second, we can deal honestly with the past. Pennsylvania is dotted with abandoned and orphaned wells left behind from decades of extraction. Many continue to leak methane, pollute groundwater, and threaten nearby communities. Severance-tax revenue can accelerate cleanup, protect public health, and make sure today’s profits help pay for yesterday’s messes.
And lastly, this new funding source can also help fully fund public schools. It can help fill Philadelphia’s one-billion-dollar school funding gap years faster, support universal pre-K, ease pressure on property taxes, repair aging roads and bridges, modernize water and sewer systems, and invest in workforce training so workers and communities are prepared for what comes next.
Big oil and gas corporations oppose a severance tax by claiming it would cost jobs or raise energy prices. But states with severance taxes continue to produce energy, attract investment, and employ thousands of workers, including union members represented by the United Steelworkers, IBEW, Operating Engineers, LiUNA, and other building trades unions. Companies drill where the resource is strong and infrastructure exists, and Pennsylvania has both. Energy prices are shaped by regional and national markets, not by whether Pennsylvania asks companies to pay a fair share.
And if there’s a concern that taxing natural gas could lock Pennsylvania more tightly into fossil fuels, the reality is the opposite. A severance tax does not increase drilling or demand. It applies only to gas already being extracted, and it allows today’s energy revenues to be invested in clean, fossil-free energy, public transit, efficiency, and methane cleanup, helping Pennsylvania move beyond gas rather than depend on it.
This ultimately comes down to a simple question. Do we want to keep leaving money on the table, or do we want Pennsylvania’s natural resources to work for the people who live here? Right now, profits flow out of state while Pennsylvanians are gaslighted into believing we’re getting a fair deal. A fair severance tax helps correct that imbalance and ensures that as long as gas is being extracted, the wealth already being generated helps build stronger schools, safer infrastructure, and healthier neighborhoods.