A nonpartisan policy research group in Pennsylvania is doubling down on its assertion that the state would be better served by a severance tax on oil and natural gas and is being “shortchanged” compared to other big producing states with severance taxes, including Texas.

In a four-page position paper issued in August, the Pennsylvania Budget and Policy Center (PBPC) said replacing the state’s impact fee, which was created under the omnibus Act 13, with a modest 4% severance tax could generate $1.2 billion annually by fiscal 2019-2020, an amount triple that of what the current fees provide.

Other options, according to the PBPC, would be for Pennsylvania to adopt the severance tax rates similar to those enacted in Texas or neighboring West Virginia. Citing various incentives and adjustments in both states, the organization said the severance tax rate for Texas is about 6.5%, and in West Virginia the rate is about 4.3%. Under those scenarios, Pennsylvania could see a revenue gain of $2.41 billion by fiscal 2023-2024 using Texas’ rate, and $1.45 billion using the rate in West Virginia, which charges 12.3 cents/Mcf.

“Both West Virginia and Texas get a better deal for their citizens from the development of a one-time and nonmobile [tax] than Pennsylvania does,” the PBPC said. “If Pennsylvania were to replace its impact fee with a severance tax rate comparable to those in effect in either Texas or West Virginia, there would be a substantial revenue gain.”

The PBPC said under a “moderate” production scenario — assuming 1,400 new wells per year, coupled with gas prices adhering to the most recent forecast by the U.S. Energy Information Administration (EIA) — Pennsylvania would collect $382 million in impact fee revenue by the 2019-2020 fiscal year. By comparison, West Virginia and Texas would collect $1.36 billion and $2.05 billion, respectively.

The gap remains even under a lower scenario that assumes 1,100 new wells per year and a low future natural gas price of $3.00/Mcf. Under that scenario, Pennsylvania would collect $332 million in impact fee revenue by the 2019-2020 fiscal year, but West Virginia and Texas would collect $715 million and $1.07 billion, respectively, through their severance taxes.

It’s not the first time the PBPC has come out in favor of a severance tax. Last year, the group said Pennsylvania could have collected nearly twice the revenue it received in impact fees on Marcellus Shale natural gas drilling if it had implemented a severance tax instead.

Patrick Henderson, energy executive to Pennsylvania Gov. Tom Corbett, said the impact fee has generated $406 million in the past 10 months. “It’s not surprising that the PBPC wants to adopt a severance tax,” he said. “They would rather value an industry by how much they pay in taxes rather than the jobs they create. Gov. Corbett would rather help create jobs than create new taxes.”

The impact “fee” was conceived as an end-around to gain support from Republicans and the then-emerging oil and gas industry in the state. Previous Gov. Ed Rendell had pushed for and was defeated in an effort to establish a severance tax as the Marcellus was barely beginning to ramp up. During the gubernatorial campaign in 2010, Corbett said he would not support a severance tax.

According to the Washington, DC-based Resources for the Future’s Center for Energy Economics and Policy, 26 of 31 states surveyed levy severance taxes on natural gas. Of those, 18 states — including Texas, West Virginia and Wyoming — levy a severance tax based on a percentage of the market value of the gas extracted, while five states — California, Louisiana, North Carolina, North Dakota and Ohio — levy a tax based on a fixed dollar amount. Three states — Indiana, Oklahoma and Utah — use a hybrid system.

Last week, U.S. Rep. Allyson Schwartz (D-Jenkintown), who has declared her candidacy for the gubernatorial race in 2014, said she would enact a 5% severance tax on natural gas if elected, adding that over a decade such a tax could generate $13.2 billion in revenue for the state.