IMF Working Papers

How Should Shale Gas Extraction Be Taxed?

By Philip Daniel, Alan Krupnick, Thornton Matheson, Peter J. Mullins, Ian W.H. Parry, Artur Swistak

November 16, 2017

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Philip Daniel, Alan Krupnick, Thornton Matheson, Peter J. Mullins, Ian W.H. Parry, and Artur Swistak. How Should Shale Gas Extraction Be Taxed?, (USA: International Monetary Fund, 2017) accessed September 20, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

This paper suggests that the environmental and commercial features of shale gas extraction do not warrant a significantly different fiscal regime than recommended for conventional gas. Fiscal policies may have a role in addressing some environmental risks (e.g., greenhouse gases, scarce water, local air pollution) though in some cases their net benefits may be modest. Simulation analyses suggest, moreover, that special fiscal regimes are generally less important than other factors in determining shale gas investments (hence there appears little need for them), yet they forego significant revenues.

Subject: Commodities, Economic sectors, Environment, Fuel prices, Natural gas sector, Oil, Oil prices, Prices, Tax incentives

Keywords: Air pollution, Corrective taxes, Environmental risks, Europe, Fiscal regime, Fiscal regime design, Fuel prices, Gas price, Government, Government share, Liability, Marginal effective tax rates, Natural gas sector, North America, Oil, Oil prices, Pre-existing gas pipeline infrastructure, Price, Processing facility, Regime design, Shale gas, Simulated projects, State common law, Supply curve, Water quality, WP

Publication Details

  • Pages:

    39

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2017/254

  • Stock No:

    WPIEA2017254

  • ISBN:

    9781484328491

  • ISSN:

    1018-5941

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