When Externalities are Taxed: The Effects and Incidence of Pennsylvania's Impact Fee on Shale Gas Wells

Drilling in shale formations rich in oil and gas has caused the U.S. to become the global leader in hydrocarbon production, but the growth has come with environmental and public infrastructure costs. States have been slow to introduce taxes to pay for impacts, fearing a decline in drilling-related investment. An exception is Pennsylvania, which introduced a per-well Impact Fee in 2012. Using a difference-in-differences quasi-experimental design...